What about this withholding business?

The clamor stirred up by the banks and the savings and loans with their depositors over the scheduled July 1 startup of 10 percent withholding on savings accounts came close to derailing the emergency jobs bill and the Social Security bill in the Senate.

The anti-withholding amendments were blocked only by giving sponsors assurances that they would have a straight up-and-down vote on the issue next month. While President Reagan has vowed to veto any measure repealing withholding, there appear to be majorities in both houses of Congress for repeal. Many Republicans are worried that their party is being badly burned on the issue.

But getting to the real issue is not easy. The banks and savings and loans have suggested that greedy Uncle Sam is reaching into your savings account to grab a new tax. Members of Congress tell me that many letters they receive imply that the writers really do not understand that the obligation to pay a tax on dividends and interest has been there all along. But whether through ignorance or willful evasion, there's no doubt that a lot of taxes have gone uncollected.

The Internal Revenue Service estimates that about $25 billion of dividend and interest income now goes unreported. That represents an annual tax loss of about $7 billion or $8 billion. The real issue is how to pick up the money, and who should bear the burden of improving compliance.

The 1982 tax bill took two swings at improving collections. One was the withholding provision. The other was a mandated improvement in the Information Returns Program (IRP) by which the IRS collects information on income of all kinds. The serious argument is whether the second step is sufficient to catch most of the missing revenue, without the additional burden of withholding.

In the past, the government itself has not been required to file information forms to the IRS on the interest paid on government bonds sold through securities dealers. The new law picks up such bonds and also jumbo certificates of deposit. The same law authorizes the IRS to require that these additional information returns be filed on magnetic tape, whenever the cost-benefit ratio justifies, in order to make computer matching easier. And critics of withholding argue that an IRS study showed that where such information returns were available, and the taxpayers knew it, voluntary compliance yielded more than 97 percent of the taxes due.

So their argument is that simply requiring information forms from the payers who are not now filing them will solve much of the problem --without saddling thousands of banks and savings and loans and millions of law-abiding investors and depositors with the burden and economic loss of withholding.

When I put this position to Treasury Secretary Donald Regan the other day, he rejected most of it as "a specious argument." The study that showed 97 percent compliance with information returns, he said, was six years old and was limited to cases where "the tapes were perfect, with complete names and taxpayer identification numbers." He asserted that "withholding will give us a better rate of compliance at lower cost" than any identification program. An IRS official, backing his boss, claimed that less than one-fifth of the missing $25 billion would be identified by information returns.

Regan conceded that by hiring many more IRS employees and spending much more money on audits, the Treasury could catch many of the cheaters. But he said the same degree of compliance could be purchased more cheaply by having the private institutions begin withholding.

He contadicted the savings institutions' cost claims. He asserted on his own authority as the former head of the nation's largest brokerage house and on the basis of the investigations of the former Chase Manhattan Bank executive who is his Treasury expert, that the costs to the industry of setting up a withholding system would be only one-fifth to one-third the $1.5 billion a year claimed.

A layman cannot judge the accuracy of either side's cost estimates. But my own reporting leads me to two conclusions. First, the government has an obligation, which the new law requires it to meet, to make adequate reports on the interest it pays out itself--something it has not been consistently doing.

Second, whatever the true cost of a compliance system, common sense and equity both dictate that part of that burden should be borne by the institutions that profit from these savings--the bankers, the brokers, the savings and loan operators.

The law passed last year provides an easy method for those over 65 and those with small accounts to be exempted from withholding. Employers long ago accepted the burden of withholding from the salaries of their employees. Withholding from savers and investors is asking no more.

On this issue, President Reagan is right.