The leaders of the House-Senate conference committee drafting a new income tax code today asked President Reagan to keep out of their day-to-day wrangling as 22 negotiators began drafting the final version of the most thorough tax code revision in a generation.
Rep. Dan Rostenkowski (D-Ill.), leader of the 11 House conferees who met with their Senate counterparts today to begin work on the measure, said Reagan did not specifically agree to keep mum on the negotiations, but didn't refuse to go along with the request either.
"We hope that the President will not be commenting on the bill day by day, section by section as we go along, and I think he will refrain from that," said the Senate Finance Committee chairman, Bob Packwood (R-Ore.), who is leading the Senate negotiators.
The two spoke to reporters outside the White House after the conferees had breakfast with Reagan for what was described as a pep talk to kick off their search for a compromise between the House and Senate versions of the tax overhaul bill.
Answers in Person
"If we have some questions, Dan and I will come down here to the White House, and we'll talk to the President personally," Packwood said after the meeting.
"But it will not help the process if each night on the evening news there is a comment from the White House about, 'They did not like Provision F that the conference was considering today,' " Packwood added.
Rostenkowski said he suggested to Reagan that he "withhold comment" on the day-to-day negotiations.
"He didn't say anything" in response, the chairman of the House Ways and Means Committee said. "But I don't see any disagreement with it. . . . For the President to make comments on every paragraph of the bill I think would hurt the compromise."
Shifting of Burden
Pledging a shift of the tax burden from individuals to corporations, the 22 House and Senate tax writers later got down to work in the cavernous meeting room of the House Ways and Means Committee.
"Some of our decisions will become a monument to American taxpayers who have suffered distortions and inequity under the present tax code," Rostenkowski said in opening the conference.
"The final version will settle some old scores between working families whose taxes are withheld each payday and those who cleverly shelter higher income from taxation," said Rostenkowski, who will act as chairman of the negotiations.
He added that the final bill will represent "a reshifting of tax burden from individuals to corporations, particularly those who pay little or no tax."
IRA Most Controversial Item
Rostenkowski and Packwood said before the negotiations began that the future of fully deductible Individual Retirement Accounts is the most controversial item facing them.
But, noting that the IRA deductions cost the Treasury $26 billion in lost taxes, Packwood said, "You can't have your cake and eat it too."
On Wednesday evening, the House, in a non-binding 338-61 vote, instructed its negotiators to insist on reducing the top individual tax rate to 27%, as passed by the Senate, and to allow most workers to retain the fully deductible IRA, as would be the case under the House bill.
The Senate bill compresses more than a dozen existing individual tax brackets--ranging from 11% to 50%--into two brackets of 15% and 27%.
The House bill has individual rates of 15%, 25%, 35% and 38%.
The House bill would levy about $40 billion more in taxes on business than the Senate package by doing away with a variety of corporate tax breaks that the Senate retained.