The Reagan administration fired back at tax critics yesterday, with the president saying Americans are over-taxed and Vice President Bush suggesting Reagan might veto a tax cut bill that deviates too much from his three-year, across-the-board proposal.
Bush said the president was "in no mood to compromise" with Democrats who would rather cut taxes one year at a time and in a smaller amount than the president has proposed. "I think the president would probably [veto] that," he said.
President Reagan seized the occasion of yesterday's income tax filing deadline to make his point that Americans pay too much. He said April 15 "reminds us that taxpayers pay too much of their earnings to the federal government."
Reagan appealed to Americans to tell their congressmen, now at home for the Easter recess, that taxes should be cut. "Today is a day when the people reaffirm their commitment to our system by contributing a portion of their income to the government . . . but today [Americans] should make it clear to all elected officials that government has gone beyond its bounds and that the people will not tolerate the ever-increasing tax burden they experienced in recent years."
The administration has been put on the defensive as the Democratic-controlled House moves toward drawing up a tax bill. The president has made clear that he does not intend to begin compromising on his tax plan yet, but congressional sources believe his proposal cannot win support in the tax-writing Ways and Means Committee.
Budget Committee Chairman James R. Jones (D-Okla.) yesterday repeated that three Treasury officials who spoke to him last week said they were "flexible" about the future years of the tax program.
The administration has denied that the three, undersecretary for taxes Norman Ture and his assistant secretary, John Chapaton, and deputy assistant for legislative affairs Bruce Thompson, talked for compromise after the president said he had authorized no offer of legislive compromise.
Jones yesterday said it was "astounding" the administration was "now taking the position that there can be no compromise."
He warned "such an attitude could undermine the chances" that tax and spending measures will be moved "along the fast schedule we have set."
Chairman Dan Rostenkowski (D-Ill.) last week proposed a one-year tax cut bill, significantly different from the three-year, across-the-board cuts in the Reagan plan. Rostenkowski said he hoped his plan would be a basis for consensus, and he thought both Democrats and Republicans would support it in the committee.
Another flurry over the administration's position on tax compromise came yesterday with a report, later denied, that ranking Ways and Means Republican Barber B. Conable Jr. had last month advised the president to compromise.
Conable said at a conference reported by Associated Press that Reagan will "win less than 10 percent" annual cuts in personal tax rates and "I think there are going to be some targeted savings plans." However Conable later denied he had told the president to compromise earlier.
"I have not offered the president that advice. . . . I mentioned it as an option. The president indicated clearly that he was not about to compromise at this time," Conable said in a statement released by his office yesterday afternoon.
Administration officials argue that cuts in marginal tax rates of the kind they propose are essential to boost incentives to work, save and invest. This is one reason for their unwillingness to compromise, at least yet, on the nature and timing of their tax plan.
But figures released yesterday by the Treasury Department suggest that even after enactment of the full Reagan plan, a family of four, now earning about $28,300, would face a marginal tax rate in 1984 of 23 percent -- only 1 percent point less than in 1980. [Details on Page B1].
This is because inflation pushes people into higher tax brackets when their income rises to keep pace with higher prices. Without any tax cut, marginal rates would rise substantially for all income groups.