The Senate Finance Committee yesterday approved legislation that would increase Social Security taxes dramatically for the rest of this century, but raise them move for employess.

Even so, the tax for the highest paid workers in the economy would more than double over the next 10 years and the tax for even the lowest [WORD ILLEGIBLE] rise about 20 per cent.

[WORD ILLEGIBLE] intended to put the [WORDS ILLEGIBLE] insurance system back on sound financial footing, now goes to the Senate floor, where action on it may begin today. The House last week passed a Social Security bill which also involves huge tax increases, but maintains the tradition of having the tax the same for companies workers.

The Social Security tax is currently 5.85 per cent for both employer and employee on the first $16.500 of wages a year, for a maximum tax of $965.25.

Under the House bill, through increases in both the rate and the amount subject to tax each year, this maximum would [WORDS ILLEGIBLE] $3.025 by 1987. Under the Senate bill it would go up to $2.390 for employees but could rise as high as [WORD ILLEGIBLE] for employers. That is what an employer would have to pay for each employee making $75,000 or more a year.

Before approving the bill, the committee with the [WORD ILLEGIBLE] of Secretary of Health Education and [WORD ILLEGIBLE] giving the states about $400 million in "fiscal relief" for their welfare programs this fiscal year - a quick shot of extra money that Sen. Daniel Patrick [WORD ILLEGIBLE] has been seeking for months. Moynihan also received a [WORD ILLEGIBLE] inclusion of an additional [WORD ILLLEGIBLE] in relief funds in the two subsequent fiscal years as part of the administration's welfare revision bills.The committee also added several other welfare law changes to the Social Security bill.

The administration had opposed extra "fiscal relief" [WORD ILLEGIBLE] reasons, but Moynihan [WORD ILLEGIBLE] Califano that the [WORD ILLEGIBLE] revision bill can'tpass next years without the extra money in as an [WORD ILLEGIBLE] to the states.

The Social Security bill has other obvious budgetary implications and the Senate Budget Committee was mulling them last night. Whether the Budget Committee will raise objections to some parts of the bill remained unclear.

The Finance Committee's plan of shifting a larger protion of Social Security taxes onto employers was proposed by Sen. Gaylord Nelson (D-Wis.) with adminstration backing. Instead of raising the maximum taxable wage at the same pace for employers and employees in order to bring in new money, the bill would require employers to pay Social Security taxes on the first $50.000 of an employees wages from 1975 to 1984 and on the first $75.00 from 1985 on - while the employee would pay on the first $17,700 in 1978 $19,500 in 1979 and then on a gradually increasing maximum which would reach $30900 by 1987 and would not reach $75.000 until after the year of $2000.

The practical effect of the jump in the wage base for employers is that through 1983, according to Social Security Administration officials, the Senate bill would bring about $72.2 billion in new revenues above increases already scheduled in current law. Of this $52.8 billion would come from employers, $17.2 billion from employees and $2.1 billion from self-employed. Under the House bill, which maintains "parity," about $76 billion would be raised through 1983 in new revenues about $36 billion to $37 billion of which would come from employers.

Sen. Carl T. Curtis (R-Neb.), calling the Nelson plan a means of "soaking the employers," said he will offer a floor amendment restoring parity between the taxable wage bases and imposing a new tax equally on workers and their employers. This would means higher taxes for workersthan under the Nelson version.

Defeated on 9-to-9 tie yesterday, after Social Security Commissioner Bruce Cardwell opposed it, was an amendment by Bob Dole (R-Kan.) eliminating altogether by 1982 the existing $3.000 limit on what Social Security recipients can earn each year in salary from a job without a loss of benefits.

The committee has already voted to raise the exemption to $4.500 in 1978 and $6.000 starting in 1978. but the House voted to remove the limit entirely in 1982 for those 65 and over. Cardwell said the cost of total removal of the ceiling - seveal billion dollars a year - isn't justified because, of the added beneficiaries, 54 per cent make over $10,000 a year and 17 per cent over $20,000 - meaning that the benefits would go mainly to the well-to-do who least need them.

There is heavy pressure from many elderly, however, to lift the earnings limit, and Dole pledged a floor amendment.

The most important welfare law change tacked onto the Social Security bill would reduce more than the admininstration wants the amount of monthly earnings which aren't counted in computing welfare eligibility. It involves such items as child care and work expenses which can be deducted from earnings in order to compute welfare eligibility.

The Social Security bill would raise the Social Security employer-employee tax rate from the 6.05 per cent for 1978 already scheduled under current law to 6.135 per cent in 1979-80, 6.6 per cent in 1981-84; 7 peer cent in 1986-89; 7.5 per cent in 1990-94; 8.10 per cent in [WORD ILLEGIBLE] 2000; 8.7 per cent in 2000 to 2010 [WORD ILLEGIBLE] 9.2 per cent thereafter.

It also rewrites the long-range [WORD ILLEGIBLE] fit formuls, to wipe out a [WORD ILLEGIBLE] was driving future benefits [WORD ILLEGIBLE] upward, so that the average [WORD ILLEGIBLE] will be guranteed benefits [WORD ILLEGIBLE] or she first retires equal to about [WORD ILLEGIBLE] per cent of the monthly wage in Social Security-covered employment in the year before retirement.

Nelson said his bill would put the Social Security system in actual balance over the next 75 years; the House bill would leave a small deficit.