Reagan Urged to ‘Back Off’ on Tax Fight : 38 House Republicans Charge Democrats Seek ‘to Deform’ Code

A group of 38 conservative House Republicans urged President Reagan Friday to quit working with Congress on a sweeping overhaul of the tax code.

“Democrats on the House Ways and Means Committee are out to deform, rather than reform, the tax code,” the Republicans charged in a letter to Reagan.

Rep. Tom DeLay (R-Tex.), one of the signers, said that Reagan should “back off this mess and take another look at it next year.”

Depart From Blueprint

The Ways and Means Committee, which hopes to complete drafting its own version of tax legislation by the end of this month, has passed provisions that differ significantly from the tax bill proposed by Reagan. And Rep. Dan Rostenkowski (D-Ill.), chairman of the committee, has suggested still more departures from Reagan’s blueprint.

The conservative Republicans specifically objected to Rostenkowski’s proposals to reduce Reagan’s proposed $2,000 personal exemption to $1,500 and to raise the tax rates Reagan is seeking for corporations.

Moreover, the Republicans said, the committee will have to approve higher personal tax rates than those proposed by Reagan, who has asked that the top personal rate be reduced to 35% from 50%. Reagan proposed offsetting the revenue loss by eliminating many popular tax breaks, but the committee, under pressure from lobbyists, already has voted to keep some of those tax breaks.

“The special interests have captured the tax reform process and the result is increasingly anti-growth and anti-family,” said the letter, drafted by Rep. Vin Weber (R-Minn.). It described Ways and Means Committee Democrats as representing “a party more interested in appeasing special-interest groups than in strengthening families and more concerned with redistributing wealth than creating it.”

Provided Key Votes

In fact, however, Ways and Means Committee Republicans have led the opposition to much of Reagan’s tax proposal and have provided the key votes needed to defeat many of its provisions. The committee voted to tighten tax breaks for banks, for example, but only after committee Republicans tentatively succeeded in engineering even more generous tax breaks.

Although the Ways and Means Committee has rejected many of Reagan’s specific tax proposals, the White House has urged committee Republicans to support the effort as the only means of ensuring that a tax measure passes the House. Reagan has set tax overhaul as the top priority of his second term, and few believe it will have any chance of passing a reluctant Senate without a strong endorsement by the heavily Democratic House.

‘A Disaster’ for House

But Rep. Newt Gingrich (R-Ga.), one of the Republicans who signed the letter to Reagan, said that the tax bill is certain to “leave this House a disaster and get to the Senate, where the process would continue.”

The Californians who signed the letter to Reagan were Robert K. Dornan (Garden Grove), Duncan L. Hunter (Coronado), Norman D. Shumway (Stockton), Daniel E. Lungren (Long Beach) and David Dreier (La Verne).