The Senate yesterday turned its back on President Carter and not only passed but increased business tax cuts of several billion dollars that he wanted dropped from the pending tax bill.

The President was defeated on the question by 74 to 20.

Sens. Dale Bumpers (D-Ark.) and Edward M. Kennedy (D-Mass.) led an effort to kill the two special business credits. They said that a $50-per-person rebate for individual taxpayers had already been dropped from the bill at President Carter's request, on grounds that it wasn't needed any longer to spur the economy. NOw, they contended, the special tax breaks for business should also be dropped, as the President had asked.

"It isn't fair to kill the rebate for millions of average, taxpayers and families, while enchancing the lucrative tax breaks already available for business," Kennedy said.

He called it "crumbs to the American taxpayer and a major bonanza for business."

But Senate Finance Committee Chairman Russell B. Long (D-La.), opposing the Bumpers-Kennedy move, said the purpose of both special business credits is to create new jobs. If they weren't retained in the bill, it would contain "nothing zip, for poor souls out of work in this country," including black teenagers with a very high unemployment rate.

One of the disputed provisions would increase the existing 10 per cent investment tax credit for businesses to 12 per cent for the years 1977 through 1980. This means that a business making a capital investments could obtain a credit against taxes equal to 12 per cent of what it spends on new equipment.

The second disputed provision would show businesses a job tax credit of up to $2,100 in 1977 and 1978 for each new worker they hire above their current work force, after allowing for a 3 per cent "normal" work-force growth. However, no single business could receive more than $100,000 in job credits.

Long's Finance Committee had proposed a smaller jobs credit than this. But after the 74-to-20 vote to keep business credits in the bill, Sen. Floyd K. Haskell (D-Colo.) moved to increased the one for jobs, and the Senate did so by votes of 48 to 41 and 59 to 29. The credits in the committee version would have cost the Treasury $3.3 billion over the next two fiscal years. The floor votes raised this to $4.1 billion.

In practice, businesses would not always get $2,100 per person because those using the jobs credit would lose certain other deductions. Even so, a small cooperation could net as much as $1,680 per new worker and a large one in the 48 per cent bracket could net $1,092, Finance Committee aides calculated.

A business could take either the investment credit or the jobs credit, but not both.

Last week, arguing that the economy was doing better than he thought, President Carter asked Congress to drop his earlier request for the one-shot $50-per-person rebate to individual taxpayers. He also asked that the Senate drop the two business credits. The Senate did drop the $50 rebate without dispute earlier this week.

However, Long, Lloyd M. Bensten (D-Tex.), who sponsored the two business tax credit provisions in the Finance Committee, and other senators argued that the provisions should be kept to stimulate investment and employment. Long hinted repeatedly that he didn't think the President would vote the bill if these two provisions were retained.

Kennedy agrued that in practice the two special credits wouldn't really create jobs and are simply a handout to business, "A business boondoggle," opposed by the AFL-CIO, United AUto Workers and other labor groups representing those for whom the taxes purport to create jobs.

He challenged whether the investment tax credit actually creates more investment than big businesses intended to spend anyhow for ongoing capital expenditures.

"Who uses the investment tax credit? The answer is the biggest corporations in AMerica . . . Two-thirds of the credit goes to the top one-tenth of 1 per cent of corporations. In 1975 the (existing) credit was worth $750 million to AT&T alone." Earlier, Howard Metzenbaum (D-Ohio) had argued that 20 per cent of the entire tax-saving from the investment credit went ot ATTT, Exxon, U.S. Steel and General Motors.

Long, Bentsen and others said numerous businesses had informed them they could expand operations it the two credits were approved, leading to new hiring. "It will help the Northeast update antiquated machinery," said Bentsen in a direct reference to Kennedy's region.

Long and Bentsen said another provision, raising the minimun standard deduction for taxpayers who don't temize deductions, will give the average taxpayer "a reduction of $170" in his tax bill, so it's unfair to say the average man is ignored in the bill because the $50 rebate was dropped.

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