May 31, 1985

FRIDAY, MAY 31, 1985 The Tax Revision Plan Federal financing of Presidential elections would be repealed under the Administration's tax plan. The end of the $1 checkoff on tax returns would radically alter the way Presidential campaigns have been paid for since 1976. [Page A1.] Treasury Secretary Baker was promised bipartisan help at the opening Congressional hearing on the tax plan. But sharp questioning foreshadowed months of debate over particular elements, particularly the proposed repeal of the deductibility of state and local taxes. [D16.] President Reagan appealed for support for the plan in stops chosen to reflect the rebellious spirit of colonial America and the present frustrations of middle America. [D17.]

The Suffolk County Executive has dropped his fight to stop the opening of the Shoreham nuclear power plant, according to opponents and supporters of the plant. A senior Suffolk County official said last night that the county executive, Peter F. Cohalan, had agreed that the county, in a change of position, would supervise a test of a plan for protecting Long Island residents in the event of an accident at the plant. In addition, Lilco has agreed to pay $131 million in back property taxes that the utility had withheld in protest against the county's opposition to the plant. The senior county official, who asked not to be identified, said that Mr. Cohalan was approving the test because he accepted new studies that showed that the area that would have to be evacuated in a nuclear emergency was not as large as the 20-mile zone the county previously demanded.

Through a combination of aggressive marketing and strong brand names like Ritz, Planters, Baby Ruth and Oreo, Nabisco Brands Inc. is considered one of the food industry's strongest and most attractive companies. Furthermore, the company has what every food company wants. ''They have shelf space clout,'' said William Maguire, a food analyst at Merrill Lynch & Company. On Wednesday, the big food company confirmed that it had had merger talks with R.J. Reynolds Industries, the nation's second-largest tobacco company. Nabisco did not elaborate and neither Robert M. Schaeberle, chairman, nor F. Ross Johnson, vice chairman, could be reached for comment yesterday.

Senior American and Jordanian officials said today that they expected the next step in the unfolding Middle East peace efforts to be an early meeting between the United States and a joint Jordan-Palestinian delegation to discuss how to arrange direct talks with Israel. King Hussein told a dozen Congressmen this morning that Yasir Arafat, the Palestine Liberation Organization leader, had told him he was willing to name Palestinians who are not P.L.O. members to the delegation but would like some of them to be from the Palestine National Council. The Council, which serves as a parliament for the P.L.O., iincludes members and nonmembers of the organization. According to participants at the Congressional meeting, King Hussein repeated the assertion he made Wednesday at the White House that the P.L.O., after repeatedly refusing to do so, was now willing to sit down at a peace conference with Israel and negotiate on the basis of two key United Nations Security Council Resolutions, 242 of 1967 and 338 of 1973.

Several employees of a man accused of spying for the Soviet Union are expected to be arrested on espionage charges in the next few days, law-enforcement officials said today. The officials, who asked not to be named, said some employees of a Virginia private detective agency would be accused of helping the owner, John A. Walker Jr., and two other members of his family to smuggle secret Navy documents to the Soviet Union. Suspect Identified as 'D' Documents released by prosecutors also identified a member of the purported spy ring who was assigned the code name ''D'' by Mr. Walker. A Government source said ''D'' is a retired Navy employee who is not related to the Walker family and lives on the West Coast. Although a suspect in the Federal investigation, the source said, ''D'' has not been arrested.

In 1968, Mary Kay Cosmetics Inc.'s business looked so promising that the then family-controlled company decided to cash in by selling the majority of its stock to the public. Now, 17 years later, with the direct sales approach to the cosmetic business in a slump, Mary Kay wants to return to private ownership. Yesterday, the management of the Dallas-based company, which sells cosmetics through 151,000 independent representatives throughout the United States and abroad, said it would offer stockholders a package of cash and subordinated debt for each of the 21 million shares, or 70 percent of the stock, outstanding. The company said the offer was worth $18.15 a share. But analysts valued the package at between $15 and $16 a share, which would give the deal a worth of between $315 million and $336 million. In trading yesterday on the New York Stock Exchange, Mary Kay's stock rose $1, to $12.625, on volume of about 426,000 shares.

The International Business Machines Corporation, painting a worsening picture for its business in the near future, said last night that ''it will be very difficult to show any earnings growth in the second quarter,'' and warned that ''a slight decline is probable.'' The prediction came after a day of heavy trading in I.B.M. shares, following reports that industry analysts had trimmed their earnings expectations for the world's largest computer company. On the New York Stock Exchange, I.B.M. dropped $1.75, to $128. In response to questions, I.B.M. said that it did not view its new prediction as a major change. Pamela Hawkins, a company spokesman, said, ''We are not talking about a decline of the proportions of the first quarter,'' when I.B.M. earnings fell 18 percent.

For President Reagan, the tax plan he is taking to the country this week is the instrument for carrying forward his long campaign against the progressive income tax and thereby reshaping the political and economic landscape of this country. While his promise of a ''second American Revolution'' has a grandiose ring, the rhetoric nonetheless highlights the chance that Mr. Reagan has to cement the economic renovations of his first term. He would do this by taking aim at the tax system that has proved impregnable to Presidents such as Jimmy Carter, who called it ''a disgrace to the human race.'' For the Reagan proposal embodies the driving motive of his Presidency - to force retrenchment of big government and simultaneously to rejuvenate the private sector of the economy by revamping the progressive income tax that he once denounced as a system ''spawned by Karl Marx.'' No one can be certain how Congress will alter the Reagan tax plan. But if it survives without much change, Mr. Reagan will have given new life to traditional Republican laissez-faire economics and added a new populist tint to the Republican Party. He will have solidified what his partisans like to call the Reagan Revolution.

New York City's hotel workers council announced new contract agreements with three hotels yesterday, but little progress was reported in talks to avert a strike tomorrow morning at most of the city's largest hotels. Vito Pitta, president of the nine-union, 25,000-member Hotel and Motel Trades Council, A.F.L.-C.I.O., has threatened a 12:01 A.M. strike at 45 hotels if an agreement is not reached with the major employer group, the Hotel Association of New York. It would be the first strike of hotel workers in New York City in the council's 46 years of existence. The two sides met yesterday at the Doral Tuscany Hotel. But the negotiations ended abruptly after 15 minutes when Mr. Pitta walked out, charging that the Waldorf-Astoria Hotel had docked workers who had picketed on their own time. After an impartial arbitrator ruled for the unions, Mr. Pitta said he would resume talks today.

A prosecutor in the office of the United States Attorney in Manhattan was arrested yesterday and charged with stealing up to $500,000 worth of heroin and cocaine from a safe used by the office's narcotics unit. The suspect, Daniel N. Perlmutter, a 29-year-old assistant United States attorney, was also charged with possession and intent to distribute the drugs - 8.7 ounces of heroin and 29 ounces of cocaine. The same charges were made against Stacy L. Honeycutt, a 22-year-old woman with whom Mr. Perlmutter shared an apartment at 7 Park Avenue. They were arrested as they drank coffee in a Third Avenue restaurant at 3:50 A.M. One of 131 Assistants The United States Attorney for the Southern District of New York, Rudolph W. Giuliani, said at a news conference that the arrest of Mr. Perlmutter marked the first time that serious criminal charges had been brought against a prosecutor in the Southern District's offices, adjoining the United States Court House on Foley Square.

The price of basic telephone service for residences and businesses with one line will rise by $1 a month across America tomorrow. The increase is part of a Government effort to have households and smaller companies pay more of the cost of the telephone system. The new per-line fee will affect close to 90 million households, just under 6 million in New York, as well as roughly 5.7 million small businesses. In terms of total dollars, the new charge means that Americans will pay just over $1 billion a year more to receive basic telephone service, according to industry statistics. That is a relatively minor sum for an industry in which total revenues already exceed $100 billion a year. But the new fee is an example, industry experts say, of the Government's determination to deregulate telecommunications by permitting prices to move closer to costs.

A 35-ton construction crane toppled onto an Upper East Side construction site yesterday, seriously injuring a pedestrian who was trapped beneath the vehicle for nearly six hours before she could be rescued. Both her legs were partly severed below the knee, but after five hours of surgery, doctors at the Bellevue Hospital Center had reattached them. The accident occurred shortly before noon as the woman, identified by hospital officials as Brigit Gerney, 49 years old, of Manhattan, was walking on the west side of Third Avenue between 63d and 64th Streets. The crane, which was hoisting a load of reinforcing steel rods, fell and pinned her against a plywood barrier. ''I could see the crane capsizing and I could hear the operator yelling as it started to tip over,'' said Watts Fitzroy, a construction worker at the site. ''I ran over to try to help the woman, but there was nothing I could do.''