A House Ways and Means task force seeking to draft a Democratic tax-cut bill is expected to propose a sizable reduction in the corporate tax rate instead of the faster depreciation write-offs that President Reagan has recommended.
Although details are not yet decided, sources said the plan would call for slashing corporate tax rates by almost one-third over the next 10 years to 33 percent by 1990 from the current level of 46 percent.
The rate cuts would be financed by trimming the president's new business tax-cut proposal to limit depreciation write-offs to no more than a firm would get if an asset were deducted as a regular business expense.
Reagan's proposal, which would provide for more generous depreciation write-offs, could cost more than $103 billion by 1990. The Democrats' plan would trim this cost to $53 billion, with the "savings" diverted to finance their proposed reductions in the corporate tax rate.
Although specifics of the proposal still are being worked out, sources said there already is enough support for the plan among task force members that the panel is likely to recommend at least something along those lines to the full Ways and Means Committee.
The tax-writing panel is scheduled to begin work on the business portion of the Reagan tax-cut plan this morning, with Democrats slated to caucus later in the day.
The task force was set up two weeks ago to work out proposals for a Democratic alternative to Reagan's plan. A similar group is meeting to develop recommendations on how to cut taxes for individuals.
Rep. Cecil Heftel (D-Hawaii), one of the task force members who favors the alternative plan, said a cut in corporate tax rates would be "more salable" than Reagan's plan, because it would benefit all firms, not just heavy industry.
Critics of the depreciation plan have complained that it only would help capital-intensive firms that spend a lot on new plant and equipment, while businesses that rely heavily on labor would get little or no relief.
Until now, business has been unified in supporting the depreciation plan, however, in part because corporate leaders believed it had the best chance of being enacted. However, some have predicted business enventually may break ranks.
Heftel also raised the possiblity of targeting some of the relief more directly to small business by reducing tax rates on the first $100,000 of corporate income -- the so-called "small business surcharge exemption."
The other members of the task force are Reps. Sam Gibbons (D-Fla.), James R. Jones (D-Okla.), James Shannon (D-Mass.) and Robert T. Matsui (D-Calif.).
Yesterday Reagan lobbied for his tax-cut package with Ways and Means Republicans and several Senate Democrats, including Sens. Ernest F. Hollings (D-S.C.), John Stennis (D-Miss.) and Harry F. Byrd Jr. (I-Va.).