Senate Democrats moved to seize political advantage on tax overhaul by voting yesterday to reject any new taxes designed "to protect loopholes for the privileged few."
The nonbinding resolution, endorsed in a closed Senate Democratic Conference session by a reported vote of 31 to 3, appears to place new pressure on Finance Committee Chairman Bob Packwood (R-Ore.) and reluctant colleagues to pare existing corporate tax benefits in working to draft a bill that would reduce individual tax rates.
It also puts Democrats at odds with President Reagan, who has said he would consider supporting a new tax on imported oil to finance such changes in the House-passed tax legislation as enhanced incentives for corporate investment and a top rate of 35 percent for individuals.
Reagan, Packwood and a wide range of senators have demanded those and other changes as the price of their support for the House bill. Unless accompanied by new tax revenue, the changes could increase the federal deficit by more than $100 billion, officials said.
But Democrats, echoing a position taken earlier by Senate Majority Leader Robert J. Dole (R-Kan.) and Budget Committee Chairman Pete V. Domenici (R-N.M.), said in their resolution that "any new revenue from tax sources should be used to reduce the deficit."
Reagan has flatly opposed implementing new taxes to reduce the deficit, and the Democratic resolution did not call for it.
The action came hours before Packwood met with Treasury Secretary James A. Baker III and Deputy Secretary Richard G. Darman, after working for several weeks to forge a consensus of his committee behind a bill to reduce tax rates and pare existing tax benefits.
The consensus has been more elusive than Packwood once hoped. He has said he would like to see committee action begin on the bill by next week, a deadline that aides now say is likely to slip by at least a week.
Packwood said yesterday that aides have begun writing the draft legislation, and that it would include enough sources of tax revenue to "pay for the things the president wants us to do." He would not discuss the substance of the proposal, however.
The Democratic position was drafted by a task force headed by Sen. Bill Bradley (D-N.J.), a longtime advocate of tax overhaul. Bradley said it indicates Democrats are "four-square in favor of tax reform" and emphasized that Reagan needs Democratic support to push tax revision through a reluctant Senate.
"The net effect of tax reform -- closing loopholes and lowering rates -- should be to reduce the relative burden on low- and moderate-income individuals and to ensure that all taxpayers contribute their fair share," the resolution said.
Several Democrats said the 31-to-3 vote masked some dissension on the tax issue, however. Sen. David Boren (D-Okla.), a vehement opponent of the House bill, successfully pushed through a clause saying any tax bill should "enhance our ability to compete in the world marketplace."
"I said I strongly opposed anything that implied we were favoring the House bill," Boren said, calling it a drag on investment. That bill would transfer $140 billion of tax burden from individuals to corporations.
Boren and Sen. Lloyd Bentsen (D-Tex.), both Finance Committee members from oil-producing states, voted for the resolution although neither opposes an oil-import fee to pay for restoring tax benefits in the House bill, according to caucus members.
"I voted for it. I wasn't going to be on record as doing something for loopholes for the privileged," Boren said.
"It is an attempt by Democrats to say, if Republicans kill tax reform, okay, but Democrats don't want to do it," one Democrat said.