The Chamber of Commerce, which in deference to the Reagan administration had not directly opposed the $98.5 billion tax increase during Senate consideration, yesterday attacked the legislation as "an economic blunder of epic proportions."

The legislation, which goes before a Senate-House conference committee next week, would "harm business during this critical period, when an economic upturn hangs in the balance," the Chamber contended in a prepared statement.

The organization, which was a strong ally of the Reagan administration during last year's budget and tax-cut fights, acknowledged that an effort to defeat the tax increase legislation is an uphill battle: "Only a massive outpouring of opposition can now deter Congress."

The legislation, shaped largely by Republicans on the Senate Finance Committee, places about half the burden of new taxes on corporations and about a quarter on affluent taxpayers. The chamber listed 17 provisions in the legislation it found "most objectionable."

These included the 10 percent withholding on dividend and interest income; cutbacks in business investment tax breaks; increases in unemployment taxes; restrictions on corporate tax sales; lower pension tax benefits for the affluent; halving the business meal deduction; and elimination of certain tax breaks that appear to encourage corporate mergers.