Business yesterday generally resisted the temptations of a dramatic change and simplification in business taxation proposed by Democrats on the House Ways and Means Committee, arguing that the administration's 10-5-3 plan is more generous for companies with capital investment needs.

But the committee yesterday added more provisions to its proposal, which might make it more appealing to business.

The Democratic change, known as expensing, eventually would allow firms to write off the entire cost of any investment in the year it was made. It amounts to the ending of taxes on income from new investment. Democrats also proposed a series of corporate rate cuts starting in 1984 that would bring the present 46 percent corporate rate down to 34 percent by 1987. Yesterday they added a provision that would allow unprofitable firms, such as some auto, steel and airline companies, to claim large rebates for back taxes.

A spokesman for the National Federation of Independent Businessmen (NFIB) said the expensing proposal for investment tax write-offs had "always been in principle something that everyone has looked at with a great deal of lust."

The NFIB is studying the plan to see whether it would help its members more than the administration's proposal, and if it would, "a very serious decision" would have to be made, the spokesman said.

Sen. Russel Long (D-La.), yesterday pointed out that business always has said that it would like expensing, and "they only didn't ask for it because they thought they couldn't get it." Economists argue that such a system would be preferable to the administration's simplified and accelerated depreciation plan because it would treat all industries more nearly the same.

But Charls E. Walker, business tax consultant and lobbyist, said yesterday, "We know what 10-5-3 is," and the coalition behind it is "holding steady." Richard Rahn of the Chamber of Commerce confirmed that many businesses will stick by 10-5-3 and said, "Our analysis shows that it [expensing] would not do as much for investment" as the administration's bill.

Tax and budget experts on Capitol Hill have calculated that 10-5-3 would give an effective subsidy to most kinds of investment in machinery and equipment, which would fall into the three- and five-year category. This would mean that firms could use their investment allowances to write off income from other sources.

The subsidy results from the combination of the investment tax credit and the simplified and more generous depreciation allowances. Supporters of 10-5-3 dispute that there would be a subsidy. The only way that a depreciation plan could be more generous than expensing is if it does amount to a negative tax on income from new investment.

The Democrats' proposal would be very attractive to small business through the drastic simplification resulting from getting rid of depreciation altogether. To make it even more attractive the Democrats yesterday added a provision that would allow all businesses to expense all of the first $25,000 of investment immediately, rather than waiting for the plan to be fully phased in.

Rahn admitted that it was "a surprisingly good proposal," but added that some firms doubt whether the huge cuts in the corporate tax rate promised for later years would in fact be allowed to take place. These provisions bring the revenue cost of the Ways and Means business tax cut up to that of the Reagan proposal.

The business community is also apparently reluctant to break with the administration and with a proposal that a strong business coalition has been backing for the past two years.

The Democrats' proposal would be somewhat less advantageous for utilities than would 10-5-3. Structures would be written off over 15 years under both proposals, but the Democrats would have less acceleration in the depreciation allowances.

Companies that would gain from the committee's plan would be those with large taxable profits even after investment write-offs, as they would benefit from the corporate rate cuts.Retail and other service industries also would be better off under the Democratic proposal.

An analysis by congressional tax experts of who would benefit from partial expensing rather than 10-5-3 showed that the oil companies would be relative beneficiaries, as would profitable auto companies, airlines and steel companies.