Testimony before the Senate Finance Committee turned into a bitter wail of corporate complaint yesterday as representatives of major industries opposed new business tax increases, particularly the creation of a new minimum tax and repeal of provisions allowing the sale of corporate tax breaks.

Facing the prospect of tax hikes initiated by both the administration and key senators, representatives of the airline, steel, mining, real estate, petroleum, coal, banking, life insurance, paper and utility industries lined up in force to argue that the proposals would gut the benefits of the 1981 tax bill and weaken economic recovery from the recession.

The scene during the second of three days of hearings on tax increases represented a complete reversal of the tone last year, when the business community was testifying enthusiastically for the Economic Recovery Tax Act and looked forward to the enactment of major cuts in tax liability.

The most intense complaints yesterday were voiced by executives of such beleaguered industries as airlines, steel and paper, who argued that the "leasing" provisions of the 1981 bill allowing them to sell unusable tax breaks are essential if they are to continue new investments in machinery and equipment.

They came armed with a study by Arthur Andersen & Co. produced at the behest of Charls Walker Associates, a lobbying firm, that contended the leasing proposals are highly efficient: Companies selling their tax breaks realized 95 cents for every dollar the breaks are worth.

The findings, however, were disputed immediately by Sen. Robert Dole (R-Kan.), chairman of the Finance Committee, who said a preliminary study of all leasing transations in 1981 by the Joint Committee on Taxation showed the following:

Of the $5 billion worth of corporate tax breaks sold in that period, only 76 percent, or $3.8 billion, went to the non-tax-paying firms that are supposed to be the targets of the legislation.

Of the remaining $1.2 billion, 22 percent, or $1.1 billion, went to profitable firms that bought the tax breaks, and 2 percent, or $100 million, went to lawyers, investment bankers and other intermediaries, according to Dole.

In an attempt to show how detrimental killing the leasing provisions would be to his industry, Frank Borman, president of Eastern Airlines, said his company is committed to the purchase of $909 million worth of aircraft from Boeing.

Borman said, however, that a key assumption in making the investment decision was that Eastern could sell the tax breaks for $278 million, effectively making the cost just above $600 million. Without leasing, the tax breaks are useless to Eastern because it has no profits against which to reduce its taxable liability with the depreciation write-offs and investment tax credits.

Dole replied: "You may have a $600 million problem; we have a $150 billion problem," referring to projections that the deficit in 1983 and 1984 is very likely to run well over $100 billion.

The leasing provisions received backing from only two members of the committee, Sen. Seven D. Symms (R-Idaho), who says he believes any form of corporate taxation is in fact a tax on consumers, and Sen. Spark M. Matsunaga (D-Hawaii), who expressed concern that fiscal troubles for the airlines will translate into problems for his state's tourist industry.

While industry representatives testified against proposals that would adversely affect their interests, the one voice supporting new tax hikes was the AFL-CIO.

Ray Deniston, chief lobbyist for the organization, contended that a $700 cap should be set on individual tax cuts to restrict benefits for those with incomes above $40,000; the leasing provisions repealed; the windfall profits tax on oil broadened; the estate tax strengthened; the foreign tax credit changed to a deduction; domestic international sale corporations--paper entities--eliminated; and preferential treatment of capital gains eliminated.

The industries testifying against the new corporate minimum tax included mining, steel, banking, coal, petroleum and gas. Each uses other sections of the tax code to reduce federal taxes. photo: Eastern Airlines President Frank Borman, left, and Phelps Dodge Corp. Vice President William Seidman during testimony before Senate Finance committee yesterday. (By James K.W. Atherton-TWP)