Just three months after passing a king-sized tax cut, leading Senate Republicans are preparing legislation that would require about $60 billion in tax increases over the next three years.
Among the proposals in a laundry list of "potential tax policy changes" are new limits on deductions for home mortgage interest and medical expenses, elimination of long-standing tax breaks for the timber, coal and iron ore industries, and sharply increased excise taxes on gasoline, cigarettes, alcoholic beverages and telephone use.
The Senate Budget Committee is scheduled to take up the tax increase issue next week as it starts to write the second budget resolution that Congress is supposed to pass by the end of the year. This resolution will set binding revenue floors and spending ceilings for fiscal 1982, and will likely be one of the vehicles for squeezing down the projected deficits in 1982 and the years beyond as the administration wants.
Sources on the Budget Committee said there appeared to be fairly strong support for setting a target of $60 billion in new revenue-raising proposals--tax increases--over the next three years. It would then be up to the Finance Committee to decide which taxes to raise and to vote the actual increases.
Although the possible revenue-raisers run the gamut from a higher excise on beer to repeal of the capital gains treatment of timber income, the most likely choices suggest the tax burden would continue to be shifted from business to individuals. This shift has been progressing over recent years, and the Reagan tax cut enacted in July accelerated the process.
If Congress does approve tax increases for the fiscal years 1982 through 1984 totaling $60 billion, it would be taking back just over 20 percent of the tax cut in the Reagan bill, which would reduce taxes by about $280 billion in that period.
The administration and most GOP senators are strongly committed to preservation of the basic elements of the Reagan cut--individual rate reductions of 23 percent spread over three years and speedier depreciation write-offs for business which experts say will cut business tax liabilities nearly in half. Some senators, however, are not entirely averse to postponement of the individual cuts, particularly the 10 percent rate reduction scheduled for July 1, 1983.
The administration has proposed only minor tax increases over the next several years and has taken no position so far on a larger bill.
But Sen. Robert J. Dole (R-Kan.), chairman of the Finance Committee, has indicated at least qualified support for a budget resolution requiring $60 billion in revenue raisers. Such a requirement would help take the heat off the Finance Committee since it would not technically be taking the initiative in raising taxes, just following orders.
The House Republican leadership has been noticeably less enthusiastic about a tax-increase program, in part because of concern that the Democratic-controlled Ways and Means Committee would seize on a tax bill to try to repeal some provisions in the earlier Reagan bill. The most likely Democratic target is the section that grants the oil industry over $11 billion in tax breaks through 1986.
In its list of possible tax increases, the staff of the Senate Budget Committee has included far more than enough to reach $60 billion over three years, and many of the suggestions would be politically impossible to move through Congress.
The listed increases, and the revenue they would raise, include:
* Tax increases on individuals: repeal of the consumer interest deduction, except for automobile loans, $13.6 billion over three years; tax half of Social Security income above $20,000 for single taxpayers, $25,000 for couples, $5 billion; set a $5,000 limitation on home mortgage deductions, $14.9 billion; raise from 3 to 15 percent the portion of income that must be spent on medical costs before deductions can be taken, $5.6 billion; repeal deductions for state and local sales and property taxes, $12.1 billion.
* Business tax increases: elimination of domestic international sales corporations permitting companies to defer income from exports, $5.5 billion; restrictions on industrial development, pollution control and hospital bonds, $3.1 billion; elimination of favorable tax rates on income from timber and royalty income from coal and iron ore, $600 million; setting a 50 percent limit on deductions for business meals and entertainment, $4.6 billion.
* Excise tax increases: doubling these, so that for gasoline it would be 8 cents a gallon; for telephones, 4 percent; cigarettes, 16 cents a pack; liquor, $21 for every gallon of pure alcohol (or $10.50 for 100 proof whiskey), $18 for each barrel of beer and 34 cents for each gallon of wine, the total revenues over three years would be $9.4 billion, the committee staff determined.