The chairman of the Senate Finance Committee predicted yesterday that Congress will pass a tax revision bill this year, the fastest schedule yet offered for a process that has been moving slowly.
However, there were indications yesterday that the White House may not be able to send its rewritten simplification plan to Congress early next week as officials had hoped. Instead, the release date could slide to late next week or the following week, a Treasury Department spokesman said.
Sen. Bob Packwood (R-Ore.) told a hearing on congressional tax simplification proposals that, "As far as I'm concerned, there will be a tax reform bill this year." His committee, he said, will begin holding hearings on the administration package about two weeks after the House Ways and Means Committee, which will start its hearing process immediately after the revised overhaul is submitted.
Packwood, who once said he "sort of" liked the tax code the way it is and has objections to such elements of tax revision as taxing employe benefits, said 500 people have asked to testify before his committee. The Ways and Means panel plans to hold hearings all summer and begin writing the bill in the fall. The only goal for passage, a committee aide said, is before the planned November adjournment.
White House Chief of Staff Donald T. Regan said yesterday that President Reagan, who returns from his European trip today, is now making final decisions on the package.
"We'll get together with Secretary of the Treasury [James A.] Baker when we get back, let him know what the final decisions are, then we'll get on with not only unveiling it but selling it to Congress and the people," Regan said on the "CBS Morning News" from Portugal.
The long-running Senate wrangle over the budget resolution and the possibility that Reagan may stay at Camp David longer than the weekend could delay release of the proposal, Treasury spokesman Art Siddon said.
The most significant changes, Regan said, will be in the area of charitable contributions, capital gains and depreciation write-offs for business. The administration is believed to be reinstating some kind of differential rate for capital gains, eliminating a proposed floor on the deductibility of charitable contributions and making depreciation more generous.
Worried by reports of compromises in the original Treasury plan, an ad hoc coalition of groups covering a wide ideological spectrum sent a letter to Baker yesterday urging him to "eliminate loopholes and preferences in order to broaden the base of taxable dollars." The groups ranged from the Fund for a Conservative Majority and the Eagle Forum to Environmental Action and the Ralph Nader-founded Public Citizen and Environmental Action. Colorado Gov. Richard D. Lamm also signed the letter.
The conservative groups tend to be concerned that the personal exemption will not be increased to the full $2,000 as originally proposed, a compromise they see as anti-family. The liberal groups are disturbed that the administration is backtracking on tax preferences for the oil and gas industry, which officials have said may be restored in part.
House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) reacted sharply yesterday to Reagan's assertion in Europe Monday that the new plan would make the tax code "less progressive." If the revised package places a greater share of the tax burden on poorer taxpayers, it would be "a great breach of faith -- and a major political gaffe for the president," O'Neill said.
He quoted a statement Reagan made in 1968, (O'Neill said he reiterated it in 1980) that "the entire graduated income tax structure was created by Karl Marx. It has no justification in getting the government needed revenue."