WASHINGTON – As the debate over tax reform intensifies among Republicans on Capitol Hill, Senate Democrats are now entering the fray with their own competing proposal, to be introduced today by Senator Wyden of Oregon.

Mr. Wyden touted his legislation yesterday as “flattening” the current income tax code. Under the Wyden plan, the personal income tax structure would be reduced to three brackets from six, with rates of 15%, 25%, and 35%. The highest tax rate under the current system is 35%. Corporate taxes, Mr. Wyden said, would be assessed at a single rate of 35%.

According to the senator, the legislation would yield a net gain in revenue for the federal government’s coffers, generating an additional $100 billion over five years to reduce the federal deficit.

Other provisions of the senator’s proposal would eliminate the alternative minimum tax; increase an individual’s standard deduction to $15,000, and automatically grant a credit on a person’s federal tax bill for state and local income taxes, even for taxpayers claiming the standard deduction. Under current rules, one must itemize deductions in order to receive any credit for state and local taxes, and, according to Mr. Wyden’s staff, only 30% of Americans itemize.

Most other deductions, Mr. Wyden’s staff said, would remain unaltered, as would the bevy of tax-preferred savings accounts President Bush’s advisory panel on tax reform seeks to simplify. As under the tax panel’s recommendations, Mr. Wyden said, income tax returns would be reduced to one page.

Income from capital gains would be more heavily taxed under the senator’s legislation, at the same rate as income generated from labor. “I think America deserves better than a tax system that saddles a policeman walking the beat with a higher proportional tax burden than folks who get their income from collecting dividends,” Mr. Wyden said in a phone interview with The New York Sun.

According to a scholar of tax policy at the Cato Institute, Christopher Edwards, increasing the tax on capital gains would be a “terrible idea,” insofar as it would discourage Americans from making the investments that start small businesses and venture enterprises and fuel the American economy.

Yet Mr. Edwards praised Mr. Wyden’s willingness to tackle an issue typically the purview of Republicans. “In recent years, there’s been a dearth of Democrats talking about tax reform,” the analyst said. “For them to put their cards on the table is good.”

Regarding Democrats’ lethargy on tax reform, Mr. Wyden said, “It’s easy to say you’re against something. I’m telling you what I’m for.”

Mr. Wyden said yesterday that he saw his plan as the heir to bipartisan tax reform legislation passed in 1986 under President Reagan and with the support of congressional Democrats. Mr. Wyden added that he was introducing his legislation now to ensure it would be part of the debate surrounding the president’s efforts next year to overhaul the tax code.