In a politically risky move, Democratic presidential hopeful Walter Mondale has given voters an unusually detailed campaign look at his plans for shrinking the federal deficit by raising taxes.
Without such action, Mr. Mondale asserts, the deficit will ''hike interest rates, choke off investment, and clobber trade even more; destroy rural America; attack entire industries; kill more jobs; and shrink our future.''
Fullfilling a pledge made at the Democratic National Convention, Mondale announced a package Sept. 10 designed to chop the fiscal 1989 deficit by two-thirds, or $177 billion. The program includes net spending cuts of $24 billion and personal and corporate tax increases totaling $85 billion.
Mondale's economic plan also assumes that by 1989 his deficit reductions will trim the cost of financing the federal debt by $51 billion. And his advisers calculate that the smaller deficit will spur faster economic growth, thereby shaving $17 billion more from the deficit.
The largest portion - roughly $46 billion - of the new tax revenues Mondale seeks would come from individuals, with the burden designed to fall most heavily on upper-income taxpayers. The tax law changes are designed to take effect next year.
For a family of four with $25,000 in income, there would be no tax increase under the Mondale plan, campaign officials say. A family with $25,000 to $35,000 would see its tax bill rise $95 in 1989. A family with $35,000 to $45,000 would pay $205 more per year. Families with incomes of $100,000 would pay $2,600 more.
The median family income in the United States was $24,580 last year (half of all families make more than the median and half earn less). So, aides note, initially more than half the families in the US would not face a higher federal tax bill under the Mondale plan. And the wealthiest 14 percent of US families, those with incomes of more than $60,000, would pay 75 percent of the increased tax bill, aides say.
Starting in 1985, individual income-tax brackets are slated to be indexed to keep inflation from pushing taxpayers into higher tax brackets. The Mondale plan would offer full indexing benefits to families with incomes less than $25,000. Those making more would be indexed to the extent inflation exceeded 4 percent.
But the $25,000 threshold in Mondale's tax plan is not indexed, so over time, inflation still would lift more families into tax brackets which, under the Mondale plan, are not fully indexed.
In July of 1983 the final 10 percent of the individual income-tax cut contained in the 1981 tax law went into effect. Mondale would limit the size of the tax reduction available to married couples with incomes greater than $60,000 and single people with incomes over $45,000.
Married couples with incomes greater than $100,000 and single people with incomes more than $70,000 would pay a 10 percent income-tax surcharge. Mondale would also raise $25 billion by imposing a 15 percent minimum tax on corporations and by limiting various tax shelters and loopholes. He contends that $10 billion in additional tax revenue can be picked up by improving compliance with tax laws and $4 billion by continuing the freeze on certain tax cuts that had been scheduled to take effect in 1984.
Mondale also favors overhauling the tax code to make it more simple and fair.