It was still standing room only in the Ways and Means Committee hearing room late Friday afternoon as lobbyists filled hundreds of brown armchairs, clogged narrow aisles, and sat on the shaggy gold carpet, while House and Senate conferees put the finishing touches on the 1984 tax bill.
During frequent recesses in the marathon session, as members did their hard bargaining out of public view, lobbyists rushed to limousines parked outside the Longworth Building on New Jersey Avenue and used mobile telephones to call their offices with the latest tax-law changes.
The conclusion of two and a half weeks of work came at 5:17 a.m. Saturday, when the conferees agreed on a package that boosts taxes about $50 billion and cuts domestic spending some $11 billion over budget years 1984-87.
''This is a very significant tax bill in that it affects almost every taxpayer in the country,'' says Steven F. Holub, national director of tax services at Laventhol & Horwath, a major accounting firm (see chart, back page).
The bill, however, will have ''not nearly the impact on individuals'' of the Economic Recovery Tax Act (ERTA) of 1981, which cut taxes and provided for indexing tax brackets to inflation, notes Floyd Williams, tax manager at Coopers & Lybrand, another large accounting firm.
For individuals, the 1984 tax bill makes it easier to get preferential capital-gains tax treatment on investments; extends telephone service taxes; reduces the appeal of income averaging; limits family loans; repeals a tax break for interest income; and freezes scheduled reductions in gift- and inheritance-tax rates.
Individuals also will be hit by the spending-cut portion of the package. On June 21, the tax conferees agreed to $11.2 billion in benefit cuts, the biggest of which will come from the medicare program, which provides health insurance for older Americans. Among other things, the bill saves $8 billion on medicare by putting a 15-month freeze on physicians' fees, while increasing the premiums paid for doctors' services and outpatient care.
The laws surrounding corporate taxes also will be reshaped by the 1984 tax bill. Among other provisions, the bill tightens the rules governing depreciation of real estate, boosts taxes on diesel fuel, trims tax breaks on the purchase of luxury automobiles, increases taxes on hard liquor, cancels withholding of interest on new bonds sold to foreigners, and forgives $12 billion of deferred taxes owed by big exporters.
The finances of individual states also will be affected by the bill, since it places new limits on tax-exempt industrial development bonds, which critics charge drain revenue from the federal Treasury.
The 1984 tax bill now must go back to each house of Congress for final passage. Action could come as early as this week, before Congress adjourns for most of July.
While the tax agreement is a major step forward, obstacles remain in the congressional effort to put together a deficit-reduction package totaling roughly $150 billion through fiscal year 1987, a package composed of tax hikes and domestic and military spending cuts. A key sticking point is defense spending. The Democratic-controlled House wants to increase spending by an inflation-adjusted annual average of 3.5 percent in 1985-87. The Republican-controlled Senate and the White House seek a 7 percent boost.
This year's struggle over taxes and spending foreshadows the problems legislators will face next year, when they try to make larger reductions in the federal budget deficit, which is expected to run at least $170 billion for each of the next three fiscal years.
Tax experts are divided on what the latest tax battle shows. To Laventhol's Holub it indicates that lawmakers may have to consider broader measures - such as imposing a flat-rate tax - since they have squeezed about as much revenue as possible from closing loopholes for individuals, the key approach used in the 1984 bill. ''I really wonder if there is much more revenue to be picked up with nitpicking,'' he says.
But Coopers & Lybrand's Mr. Williams says he thinks that at least during 1985 , ''there will be more of the incremental chipping away, more base broadening.'' In his weekly radio address on Saturday, President Reagan said he wants to broaden the tax base and lower tax rates during the second term he hopes to serve.
Tobacco taxes are an area where additional revenue may be raised next year. House conferees are said to have only reluctantly dropped their proposal to keep the excise tax on cigarettes from falling from the current 16 cents a pack to 8 cents a pack in October 1985.
The conferees also took the less stringent of two plans for hiking the liquor excise tax. They adopted the Senate's version, which boosts the tax by $2 a gallon, to $12.50 next year. CAPITAL GAINS. Temporarily cuts from one year to six months the period an investor must hold securities to get preferential tax treatment. (Covers investments made after June 23, 1984.)
PHONE BILLS. Extends through 1987 the 3 percent excise tax on phone service that was to expire at the end of next year.
TAX SHELTERS. Requires tax-shelter promoters to keep customer lists and register shelters with the Internal Revenue Service.
INCOME AVERAGING. Cuts the value of an income-averaging provision used by those who experience a big jump in income.
INTEREST EXCLUSION. Repeals a provision due to take effect next year that would have let individuals avoid tax on 15 percent of their interest income, under certain circumstances.
INHERITANCE TAXES. Freezes at 55 percent through 1987 the top rate on gift and inheritance taxes. The rate was to have dropped to 50 percent next year.
CHARITABLE WORK. Boosts from 9 cents a mile to 12 cents a mile the deduction for travel while doing charitable work.
HOME COMPUTERS. Tightens the rules under which personal property, such as home computers, qualifies for business deductions and credits. To qualify, the equipment now must be required by employers.
FAMILY LOANS. Provides that individuals who make below-market-rate or interest-free loans would be taxed as if a market rate of interest had been earned.