Senate Finance Committee Chairman Robert Packwood (R-Ore.), observing that he has been hearing complaints from his constituents about President Reagan's proposed tax overhaul, said yesterday he would take another look at the plan if he is convinced that it does nothing for middle-income Americans.
"There is a healthy suspicion that this plan does not reduce taxes, as announced, for those in the $20,000 to $60,000 range," Packwood said in a statement.
Packwood said he would decide whether to press for modification after he has the Treasury Department examine a forthcoming report by the Oregon Department of Revenue about the impact of the plan on Oregon's taxpayers.
Packwood's concern about middle-income taxpayers who would get the smallest tax cut of all income groups under the plan was just one of a number of questions he has raised about the Reagan proposal. He also has said he would like to reduce the top tax rate, now 50 percent, to 25 percent. That's even lower than the 35 percent rate proposed in the plan.
Treasury Secretary James A. Baker III has told Packwood that such a reduction would disproportionately benefit the well-off. Packwood also on separate occasions has suggested a tax on imported oil and a consumption tax.
Meanwhile, Treasury Department officials confirmed that their tax plan would bring in somewhere between $9 billion and $18 billion less in federal revenue than current law would, in 1983 dollars. That forecast, which is not contained in the documents explaining the proposal, comes from elaboration of the department's predictions that the plan would increase corporate tax revenue by 9 percent and cut revenue from individuals by 7 percent.
At first, Baker said those figures wouldn't be applicable until all the transition periods in the proposal had ended, in 40 years. Now, officials say he didn't get it exactly right. They came up with their forecast by taking the economy as it was in 1983 and superimposing the fully implemented proposal on top of that.
Revenue from individuals was about $289 billion in 1983. A 7 percent decrease would cut that figure to $268 billion. Corporate revenue, which was $37 billion, would rise to $40 billion if it went up 9 percent. Those two add up to $308 billion, $18 billion less than actually came in that year. Treasury calculations show a revenue loss of between $9 billion and $12 billion, although the reason for the smaller figure is not clear.
Baker has said he would consider the plan "revenue neutral" if it brought in 1 percent more or less revenue than current law. The shortfall would have to be between $3 billion and $6 billion to meet that criterion, which also is important to congressional tax writers who don't want to increase the federal deficit.