O’Neill Calls Reagan Tax Plan ‘Good Beginning,’ Sees ’86 Vote : Says He’ll Push to Make It Fairer to Working Poor

House Speaker Thomas P. (Tip) O’Neill Jr. said today that President Reagan’s tax plan is a “good beginning” and that Congress will probably approve a modified version by the end of next year, but that he will push to make it fairer to the working poor.

“Haste makes waste in legislation, but I do think in this 99th Congress we should be able to get a bill on the President’s desk, ready for his approval,” the Massachusetts Democrat told a subcommittee of the tax-writing House Ways and Means Committee.

The 99th Congress ends at the close of next year.

“Now it’s time for tax reform,” O’Neill testified in a rare departure from his custom of refraining from appearances before congressional panels.

O’Neill said the 1981 tax cut pushed through Congress by Reagan “failed to address the needs of the working poor.”

Still ‘Wrong Today’

“This was wrong in 1981 and it is wrong today,” the Massachusetts Democrat said.

He said that, while Reagan’s proposed tax reforms move in the direction of reversing these trends, “we should realize that if they are enacted, the working poor will still be paying more taxes than they did before he took office.”

The Speaker said one of his “highest personal priorities” before retiring next year will be to make the tax reform bill more attractive to the working poor.

Meanwhile, Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee who has been supportive of the effort to overhaul the tax code, said his panel is not wedded to the President’s proposals.

Cuomo to Have Chance

During a breakfast meeting with reporters, Rostenkowski said he still is not persuaded that the deductibility of state and local taxes should be eliminated, as Reagan has recommended.

Rostenkowski added that New York Gov. Mario M. Cuomo, one of the leading opponents of eliminating the deduction for state and local taxes, will be given an opportunity to appear before the committee to try to persuade the legislators.

However, Rostenkowski said members of the committee agree that if they decide to keep a tax break Reagan is seeking to eliminate, something else will have to be substituted in order to keep up the level of revenues.

The tax overhaul plan, showered with praise since it was presented a week ago, is getting the wet-blanket treatment from some tax experts who say it offers too much for the rich and far less simplification than promised.