The tax-overhaul plan offered by House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) would bring in almost $13 billion less in tax revenue in 1986 than President Reagan's tax proposal, according to figures released yesterday by the Joint Committee on Taxation.
The package also would collect $7 billion less than the current tax system. Over five years, both revision proposals would generate as much tax money as the present tax code, so that the federal deficit would not rise in the long run. But the immediate effect of the Rostenkowski proposals -- in the unlikely event they were enacted as written -- would be to raise the deficit.
The figures were submitted to committee members during a closed briefing on details of the Rostenkowski alternative. No votes were taken, although serious drafting work could begin as early as today. The meeting was followed by a strategy session with committee Democrats.
Rostenkowski does not endorse all parts of his proposals, which were written by the committee staff and follow the general lines of the Reagan plan by reducing rates and curbing deductions. But the committee will work from the staff options.
In 1986, the first year the tax changes would be in effect under the assumptions used by the committee, Rostenkowski's proposals would bring in $12.6 billion less than Reagan's; in 1987, $6.9 billion less; in 1988, $300 million more; in 1989, $6.1 billion more; and in 1990, $12.5 billion more. Over the five-year period, the staff proposals would bring in a statistically insignificant $600 million less than the Reagan plan and almost exactly as much as the present system.
Partly because of Rostenkowski's insistence that the Treasury Department make its plan perfectly "revenue-neutral," the administration proposals would deviate less from the present tax code than the staff options on a year-by-year basis. Experts suspect, however, that the Reagan plan would lose money over the long run.
Committee aides cautioned that yesterday's figures are still subject to revision and that the detailed revenue effects of the proposals have not yet been released.
According to the numbers provided yesterday, the Rostenkowski plan would shift the tax burden toward corporations and away from individuals even more than would the Reagan proposals. By 1990, corporations would have paid $25.1 billion more in taxes under the committee package than under the Reagan version, while individuals would pay $25.7 billion less.