ROSTENKOWSKI SAYS TAX HIKE NEEDS REAGAN SUPPORT
House Ways and Means Committee
chairman Dan Rostenkowski said he was ready to support an 18
billion dlr tax increase to help balance the budget but doubted
it could pass Congress without President Reagan's support.
    Rostenkowski, the chief House taxwriter, said his committee
was reluctant to back a tax increase without certainty that it
would pass the full House and this would require Republican
votes.
    "Chairman Rostenkowski still says its an uphill fight unless
the president signs on," the Illinois Democrat said in remarks
for delivery to the Tax Executives Institute.
    Rostenkowski predicted the tax increase will concentrate on
increases in federal excise taxes while leaving the income tax
intact.
    The taxwriters will not consider delaying the income tax
rate cuts for upper income persons scheduled to take effect in
1988, he said. The top rate will fall from 38.5 pct to 28 pct
next year.
    In addition, he said "they don't have the energy or appetite
to endorse a radical new tax like a VAT (value added tax),"
which he also opposes. "The real question is where the
Republicans will be when the tough vote comes," he said.
    Rostenkowski said his committee will not approve any tax
credits to provide incentives for exports as part of a tax or
trade bill this year.
    He added that no extension or expansion of the research and
development tax credit for business is expected since it would
cost billions of dollars.
    And, Rostenkowski told the tax executives that Howard Baker
as Reagan's chief of staff would make it more likely the White
House will ultimately back a tax increase this year. "There are
strong suspicions that the Baker boys will lead the president
down the slippery slope of moderation," he said.

 Reuter
