President Reagan intends to try to forge "majorities in both houses of Congress" for tax simplification this year, but probably will hold off endorsing a specific plan until he conducts "extensive discussions and negotiations" with Capitol Hill, a senior White House official said yesterday.
The official, speaking to reporters on the condition that he not be identified, said that budget and tax simplification carry "equal priority" with Reagan but that the budget timetable has forced the president to focus first on spending decisions.
After the election, some administration officials predicted that Reagan would endorse a specific tax-simplification plan in his Feb. 6 State of the Union address, incorporating aspects of the plan unveiled last month by the Treasury Department.
But several officials said yesterday the timetable has slipped and that Reagan probably will use the speech to articulate goals or "principles" for tax simplification, waiting until spring to work out a specific proposal.
Reagan's budget "core" group may start looking at tax-simplification issues next week, officials said. Treasury Secretary Donald T. Regan and several White House aides met yesterday to discuss the timetable and procedure for hammering out a specific proposal.
Regan proposed last month that the tax system be changed to a modified "flat tax" that would reduce the number of tax brackets from 14 to 3 and would reduce the maximum tax rate for individuals from 50 percent to 35 percent. For corporations, the Treasury plan would reduce the maximum tax rate from 46 percent to a flat 33 percent. Many deductions and exemptions would be eliminated or modified.
Speaking of the Treasury plan, the White House official said yesterday that there are "a number of things in there that the president will not go along with." However, he said "no specific decisions" have been made.
Treasury officials are in the midst of meetings with business groups that would be affected by the tax proposal. There have been indications that Regan may restore one of the major corporate tax breaks targeted for change in his plan, the Accelerated Cost Recovery System, which allows business to write off investments rapidly.
A Treasury official said the meetings will continue for two weeks and that it may be 30 days before the White House decides on any specifics.
The White House official said, "This is not something where we are going to take the Treasury proposal, make the changes the president wants and send it to the Hill as a presidential proposal." Instead, he said, Reagan will have extensive contact with Congress.
"We will try to pull together majorities in both houses of Congress, if we can, to support this," he said. Asked about the prospects, he said there is a "reasonable chance for success" if Reagan "is not drawn into the budget debate." The official stressed, as he has before, that the White House wants to keep the budget and tax issues separate.