A tax break that has allowed billionaires to renounce their U.S. citizenship, leave the country and escape taxes on their profits touched off charges of class warfare in the House yesterday between Democrats and Republicans.

A Senate proposal to tax such wealthy expatriates was dropped from a tax bill during a House-Senate conference Tuesday night, at least partly because of pressure from lobbyists who included two former Republican members of Congress, ex-senator Steve Symms (Idaho) and ex-representative Guy Vander Jagt (Mich.).

The move to close the loophole began last November after President Clinton read a Forbes magazine article about six wealthy Americans who avoided capital gains taxes by renouncing their citizenship. The Treasury Department has endorsed ending the tax break, estimating that the Senate proposal to tax the capital gains over $600,000 of expatriates with more than $5 million in assets would affect about two dozen people a year and generate $1.4 billion in revenue over five years.

Billionaire expatriates cited in the article include John "Ippy" Dorrance III, an heir to the Campbell Soup fortune who became an Irish citizen, and Kenneth Dart, a Dart Container heir who took out citizenship in the Central American nation of Belize.

After a partisan clash over the loophole, the House passed the tax bill on a voice vote and sent it to the Senate for final approval -- without an expatriate tax. The bill would restore a noncontroversial deduction to 3 million self-employed people for part of their health insurance costs and would repeal a controversial tax incentive for broadcast stations to sell to minorities.

But the focus in the House yesterday was on what the bill did not include.

Democrats charged Republicans with favoring the "unpatriotic" rich by preserving the tax protection for the expatriates. In turn, Republicans accused "socialistic" Democrats of wanting to soak the rich.

"House Republicans, true to their form, want to make sure that every super-rich person in the country can have every possible tax break and tax advantage they can ever get," House Minority Leader Richard A. Gephardt (D-Mo.) told reporters before the House debate.

"It's unpatriotic, it's immoral for someone to enjoy all of the benefits of the United States and renounce their citizenship and then run off to some foreign island to enjoy it," Rep. Charles B. Rangel (D-N.Y.), a senior Ways and Means member, said during floor debate.

"They {Democrats} want to tax the rich people out of existence and then government is going to provide the work," Rep. Mel Hancock (R-Mo.) said. "If that isn't a socialistic concept, I don't know what is."

House Oversight Chairman Bill Thomas (R-Calif.) told Democrats: "Wrap yourself in the flag, play the games of class warfare."

Republican lawmakers also argued that what they called an "exit tax" could violate the human rights of potential expatriates in a way similar to how the Soviet Union prevented Jews from emigrating, a comparison that Rep. Robert T. Matsui (D-Calif.) denounced as "outrageous" and "unpatriotic."

Rep. Nancy L. Johnson (R-Conn.), chairwoman of the Ways and Means oversight subcommittee, cited the hypothetical example of a "little woman" who immigrated after Fidel Castro came to power and might want to return to a "free Cuba." Rangel replied that Cuban Americans who prospered because of American education and free enterprise ought to pay taxes on any wealth acquired in the United States.

Symms, a former member of the Senate Finance Committee who is now a Washington lobbyist, also compared what he called a "confiscatory" tax to those imposed by repressive regimes. "Hitler did it, Stalin did it, Khomeini did it, and I suppose the Iraqis still do it," he said in an interview. "It would encourage you, if you were a wealthy Hong Kong businessman, not to come to the United States with your money."

The former Idaho senator who left office in 1993 said he represented New York lawyer Raymond Marks, whose law firm, according to another congressional source, has a client in the United States who is concerned about any change in the tax on expatriates. Vander Jagt, who also departed two years ago, said he was retained by a Los Angeles lawyer, Bruce Selig, whose unnamed client recently renounced his U.S. citizenship.

"You can't create a new class of citizenship and tax them retroactively," said Vander Jagt, a former member of the House Ways and Means Committee.

Congress has rushed to reinstate the health insurance deduction, which expired at the end of 1993, before the April 17 deadline for filing income tax returns. The deduction would be 25 percent for 1994 and rise to a permanent level of 30 percent for 1995. About 3 million entrepreneurs and farmers would be eligible to take the deduction, which would cost the Treasury an estimated $3.5 billion over five years.

To offset those tax losses, the tax bill repeals a Federal Communications Commission policy of encouraging minority broadcast ownership, which Republicans said benefited only a small group of millionaires. The repeal would be retroactive to Jan. 17, killing a Viacom sale of its cable facilities to minority broadcaster Frank Washington.

Viacom stood to get a tax break of between $400 million and $600 million on the deal. House Ways and Means Chairman Bill Archer (R-Tex.) and Senate Finance Chairman Bob Packwood (R-Ore.), attempting to defuse the controversy over the expatriate tax break, released a statement that raised questions about "serious human rights concerns," potential conflicts with international treaties and "a significant risk of double taxation."

The statement noted that the tax bill called for the Joint Committee on Taxation to conduct a study of an expatriate tax and issue a report by June 1. "We worked it hard" for the past two weeks, Symms said. "This issue is set aside for now, but it will be back." CAPTION: STEVE SYMMS