Sen. Bob Packwood (R-Ore.), incoming chairman of the Senate Finance Committee, said yesterday that he opposes any major tax legislation next year, especially the tax-simplification plan being considered by the White House.
"I sort of like the tax code the way it is," Packwood said in an interview.
Packwood was the latest and most influential opponent to speak out against the tax-simplification plan advanced by Treasury Secretary Donald T. Regan.
President Reagan has stayed somewhat aloof from the plan, and there were indications yesterday that the White House wants to approach the tax-simplification issue as it did the Social Security problem in 1982 and 1983, with bipartisan negotiation, although not with a formal commission as it did with Social Security.
The Treasury proposal would replace the current tax system with a simplified approach involving three tax rates ranging from 15 percent to 35 percent. It would do away with many current preferences and deductions such as the deduction for state and local income taxes.
Packwood, 52, the heir to the post being vacated by newly elected Senate Majority Leader Robert J. Dole (R-Kan.), said he would prefer to handle the federal budget-deficit problem with one massive budget-cutting bill that could involve the death of many current programs. He said the president would have his support if he chose such a course.
But Packwood made it clear that he will work to protect many current preferences, particularly the tax-exempt status of health insurance premiums and other fringe benefits paid by employers.
Packwood, an independent and often sharp-spoken three-term senator, was among several Republican leaders to meet with Reagan yesterday.
Upon leaving the White House, Packwood told reporters, "Simplification for the sake of simplification is to beat your brains out and go through the whole process and then end up without a dime's dent in the deficit."
Packwood, contacted later by telephone, said he would entertain some minor tinkering with the tax code next year, but not any major legislation.
"I'm very adamant that I want to cut every ounce of spending first," he said.
At some point in the future, after progress has been made on the deficit, Packwood said he would consider taking a look at the many tax deductions and preferences, perhaps through sunset legislation that would force Congress to reconsider all of them with a set time period of five years or so.
Packwood said major cuts can be made in spending next year if the budget is wrapped into one bill so that individual programs can be killed without separate votes. "I think as a package vote, not unlike a reconciliation vote, you could do that," he said.
White House officials said Wednesday that Reagan is considering asking for such a sweeping bill. A version of his first budget passed the House in 1981 as a budget reconciliation bill, put together largely by the Office of Management and Budget with the help of a coalition of House Republicans and conservative "Boll Weevil" Democrats.
Packwood acknowledged that it may be necessary at some point to increase revenue, but he said that he would still oppose increases in taxes on income or capital. That generally would rule out new direct taxes on individuals or corporations.
However, Packwood said that at that point, he would consider new taxes on consumption.
Asked if that meant a value-added tax, a form of sales tax under which goods are taxed at each stage of the manufacturing process, Packwood said, "No one has used that term in this town since Al Ullman," referring to the former chairman of the House Ways and Means Committee who was defeated in 1980 by voters in Oregon, partly because of his advocacy of a value-added tax.
Packwood's rise to power, which he called "the culmination of a career's dreams," caused consternation and wonderment in the White House and on Capitol Hill.
Packwood has made few friends in the White House, either with his stands on issues or his occasional biting remarks.
In 1983, he was ousted as chairman of the National Republican Senatorial Committee, the panel that funds and promotes Republican Senate candidates, in a coup largely engineered by the White House.
Packwood had angered conservatives with his support of free choice on abortions and his spirited opposition to sale of advanced radar surveillance planes to Saudi Arabia.
But his chief apparent sin was an unguarded comment in early 1982, when he said that Reagan replies to serious questions with anecdotes and that the GOP under Reagan had written off minorities and was trying to "build a party on white Anglo-Saxon males over 40." He later apologized to Reagan.