Democratic presidential hopeful Walter F. Mondale told businessmen yesterday that he would raise taxes on business and the well-to-do if elected because "most of us in this room received more tax cuts than we needed" from President Reagan.
Warning that $200 billion budget deficits will choke off the recovery and cause "a chain reaction" of economic problems abroad, the former vice president told about 300 of his business backers that spending cuts alone could not reduce the flow of red ink. He said he would repeal indexing, cap the 1983 tax cut "for the wealthy" and seek "tax reform" aimed at simplifying the tax code and "restoring its progressivity."
His pledge drew such mild applause from supporters at the Sheraton-Washington Hotel that Mondale said jokingly, "Lock the doors."
"I just happen to believe it," he said. "I think most wealthy Americans are a little embarrassed by the amount of tax cuts they have received."
The first meeting of his business advisory council brought together wealthy backers from around the country, with a strong representation of Washington lawyers and former Carter administration officials.
Former Carter Treasury secretaries W. Michael Blumenthal and G. William Miller are the group's honorary co-chairmen; former Carter White House aide Anne M. Wexler was chairman of the luncheon.
Within the next three weeks Mondale expects the endorsement of the AFL-CIO and the National Education Association, and yesterday's lunch--the first major event on his fall calendar--seemed designed to forestall charges that he is a single-interest candidate.
Wexler called Mondale a man who "has always believed that business and government have got to be partners." Mondale claimed that "one of my great strengths is that I have the confidence of both labor and business . . . and I can get them to work together for the good of the country."
Most of Mondale's rivals for the Democratic nomination also called earlier this year for capping the third year of the Reagan tax cut and delaying or scrapping indexing. But Mondale went further by pledging to seek those actions in 1985, if elected, along with higher taxes on banks, a windfall profits tax on oil companies and "tax reform" that would reach "90,000 profitable corporations that pay no taxes at all."
He ridiculed Treasury Secretary Donald T. Regan for "arguing a strange born-again belief in vast deficits." Deficits in the $200 billion range "as far as you can see . . . will clamp a restraining ceiling on our growth and choke off recovery after a very short period," he warned.
By keeping up interest rates, he said, the deficits will "devastate our exports and suck in a tidal wave of imports." The "excessive" strength of the American dollar is "equivalent to imposing a 20 to 25 percent tax on anything produced by the American worker or farmer and granting an equivalent subsidy to the foreign worker or farmer."
Mondale said the current trade balance is "the worst in history," and will grow worse next year, when it may reach $100 billion, he said. "That would cost the country 2 million jobs and cut the gross national product by 2 1/2 percent."
The deficit-cutting program the former vice president outlined included, in addition to the tax hikes, a slowdown in the defense buildup and entitlement spending and efforts to get farm subsidies under control.
He pledged "steady spending increases" for the Pentagon, but at a slower pace than Reagan has advocated, including elimination of funds for the B1 bomber and MX missile.
Mondale said he would support health care cost-containment measures to "increase competition in the health industry," but would not ask patients or the private sector to pick up expenses the government now meets.
Several of the businessmen present said they were pleased that Mondale laid less emphasis on import controls and on subsidies to older industries than he had in past speeches. Without listing details, he promised aid to workers in adjusting to economic change, adding that "corporations and sometimes whole industries will need help in restructuring to meet changed markets."
In the trade field, he promised "full funding and aggressive use" of the Export-Import Bank and the Commodity Credit Corporation to meet foreign competition for overseas contracts.
Mondale called the present unemployment rate "socially indecent, economically self-defeating and an unnecessary evil," and promised as president to bring both business and labor "to the table" with a demand they cooperate for the common good.