Negotiators Seek Ways to Tax Rich : Deficit: The size of the gasoline tax and the surtax on the affluent remain unresolved. Lawmakers expect to have a viable package by tonight.

Congressional negotiators searched Saturday for ways to raise taxes on high-income Americans and pare down a proposed gasoline tax increase to make a compromise budget package more acceptable to lawmakers wary of election-year backlash at the polls.

Although they faced a series of politically sensitive decisions on tax hikes and spending cuts, the negotiators said they remained hopeful they could come up with a new plan by tonight that can simultaneously satisfy the House, the Senate and the Bush Administration.

One approach favored by senior Democrats would impose a surtax on affluent Americans with taxable incomes above $200,000 or $300,000. But Republican lawmakers and President Bush remained wary of the proposal, viewing it as a backdoor way to effectively raise income tax rates above the current top-bracket amount of 28%.

Even so, according to sources close to the private talks on Capitol Hill, imposing a surtax on the wealthy at some level--perhaps taxable income above $500,000--is likely to become part of any final deficit-reduction plan.

A major sticking point in the bargaining is a 9.5-cent-a-gallon gasoline tax increase approved by the Senate as part of its five-year budget plan. House members, whose rival deficit package contained no gas tax increase, want to cut back the Senate gas tax hike sharply to make any compromise more likely to pass both chambers two weeks before the Nov. 6 elections.

To do so, however, they face a daunting financial hurdle. The Senate gasoline tax provision alone would raise $42.6 billion toward the bipartisan target of $500 billion in deficit reduction over the next five years. Any lesser gas tax increase would have to be offset--probably by taxes on wealthy Americans--to meet the deficit target.

The deficit-reduction package adopted by the House includes a 10% surtax on taxable income above $1 million. But the “millionaire’s surtax” would raise only $7.6 billion by 1995, not nearly enough to offset the revenue loss from a lower gas tax increase.

While both sides hoped to produce a new plan by tonight, difficult issues remained unresolved.

“I think we’re making progress,” said Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee and a principal tax negotiator. “I think we have a reasonable chance to finish this up Sunday night, but we still have some major sticking points.”

John H. Sununu, White House chief of staff, huddled with Senate Minority Leader Bob Dole (R-Kan.) and other GOP strategists on Capitol Hill. Democratic negotiators met separately to try to blend the Senate and House packages into a new proposal that could clear Congress and pass muster with Bush.

As the Nov. 6 elections near, lawmakers in both parties have become increasingly skittish about raising taxes and voting for spending restraints likely to anger voters. At the same time, members of Congress are anxious to complete action on a budget package and other major bills this week so they can go home and campaign.

“I hope they’ll be able to reach a conclusion by the end of the weekend,” House Speaker Thomas S. Foley (D-Wash.) told reporters. “I’ve generally heard that they’ve been doing well.”

But the relatively narrow 54-46 bipartisan vote in favor of the Senate’s package and the top-heavy Democratic backing of a House bill that hit harder at upper-income taxpayers made it more difficult to fashion a middle-of-the-road deficit package acceptable to all sides.

The House, in a stinging defeat for the President and its own leaders, rejected a budget summit agreement endorsed by Bush on Oct. 5. That led to creation and approval of the separate deficit-cutting plans that the negotiators are now trying to merge into a single package.

Another provision in the Senate package would target the rich by a different method--restricting deductions claimed by taxpayers with incomes above $100,000. It would disallow $500 in deductions for every $10,000 of income above the threshold, except for deductions for medical expenses, investment interest or casualty losses.

While this approach would raise a hefty $29.3 billion over five years, it has drawn opposition from states such as California and New York, which rely heavily on state income taxes that would no longer be fully deductible by upper-income residents.

Bush’s staunch opposition to income tax rate increases, however, has caused negotiators to focus their attention on some form of surtax.

Under the proposal favored by some Democrats, the surtax would be 3% to 5% of income above a specified threshold, such as $300,000. At that level, according to Internal Revenue Service figures, the surtax would affect about 500,000 couples and individuals who reported incomes above $300,000 on their 1989 returns.

The latest proposals from both sides have softened the impact of proposed spending cuts in the Medicare program on elderly beneficiaries. Under both the House and Senate bills, the monthly premium under Medicare’s Part B, which covers doctor bills, would rise from $28.60 to $29.90 next year and to a projected $46.20 five years from now. The House bill also, would raise the annual Part B deductible from $75 to $100, while the Senate bill would double the deductible to $150 and require Medicare recipients to pay 20% of laboratory costs.

While there are major differences in the two measures, both would impose higher taxes on cigarettes, beer, wine, liquor and luxury goods such as expensive cars, yachts, furs, jewelry and private planes. They also would raise, either to $89,000 or $100,000, the ceiling on wages subject to the 1.45% Medicare payroll tax. The ceiling is now $51,300.