August 10, 1982

President Reagan, in a reflection of growing White House concern over his political standing, enlisted Lyn Nofziger today to lead the fight for the Administration's bill to raise taxes by $98.5 billion. Mr. Nofziger, who resigned in January as assistant to the President for political affairs, dismissed his earlier opposition to the bill as ''pure stupidity.'' After meeting with the President this morning, he said he would return to the White House staff on a temporary assignment to lead a campaign in the next 10 days to increase public support for the measure. Mr. Nofziger told reporters that he wanted Mr. Reagan to make a nationwide television address putting pressure on Congress to pass the legislation. He said the President was ''leaning toward'' such a course.

The stock of the Cities Service Company slid almost $7 a share - nearly 20 percent of its value - in hectic trading yesterday as reports circulated that the Allied Corporation had discussed purchasing the oil company. The drop in Cities Service stock to $30.375 a share came after the New York Stock Exchange permitted the stock to open for trading less than an hour before the exchange closed. It was the first trading since the Gulf Oil Corporation's surprise announcement Friday afternoon that it had dropped its $5 billion offer to buy Cities Service. The decline, while dramatic, was less than expected, apparently because of Cities Service's announcement on Sunday that it would buy back up to 20 million shares of its own stock to help support its price - now at less than half the $63 a share that Gulf had originally offered. Industry sources said that the Allied Corporation, one of the nation's biggest companies, had approached Cities Service about buying the company. They also said that Cities Service had invited the Mobil Corporation and Texaco Inc., among others, to consider making offers for the nation's 16th-largest oil company.

Lionel H. Olmer, Under Secretary of Commerce for International Trade Administration, said today that the Government had no plans to ask the European Community to improve its offer to resolve a steel trade dispute, despite rejection of the offer last week by the domestic steel industry. His comment came in an interview as the Commerce Department prepared to issue findings that could set new penalties on imports of European steel to the United States. Such penalties would further intensify the trade conflict that involves tough competition for the American industry from European exporters.

''The Japan of the United States'' -Prof. Marshall Goldman, describing Massachusetts' industrial complex. (A1:3.)

When Brooks Brothers, the genteel, 164-year-old clothing store, opened its first store in Connecticut last Saturday, it ended a long-standing tax advantage for Connecticut residents. Although upsetting to some consumers, the move is bound to please New York and other state authorities who, in an effort to capture millions of dollars in lost revenue, are trying to end these interstate tax advantages. Under regulations as old as most tax statutes, a buyer does not have to pay any sales tax for most items purchased out of state and shipped to the buyer's home - as long as the seller does not have an outlet in the state of the buyer. Thus the tax-free status does not apply to Connecticut shoppers at such New York stores as Macy's and Lord & Taylor, and now at Brooks Brothers, all of which have outlets in Connecticut.