Reagan’s Tax Plan: A Supply-Side View

With the tax code once again under revision, I went to a Capitol Hill reception in the new Senate Office Building to see if I could find out anything of interest. Practically every staffer on the Senate Finance Committee seemed to be on hand. These are the people who actually write the tax laws, but you don’t learn much from them; any more than you would be able to discern future economic trends from the floor of the New York Stock Exchange on a busy day. It is not that Finance Committee aides know things they are too discreet to tell you. They know only too well the political uncertainties ahead: the difficulty of foreseeing the net outcome of constituency pressure, special-interest lobbying, and senatorial whim. So they stand about contentedly at the eye of the gathering political storm, nibbling crudités and crackers, swapping stories about their bosses, and letting stray seekers-after-truth know, with cynical shrugs, that the guessing game is also a mug’s game.

Finance Committee chairman Senator Robert Packwood (pants too short in the patrician style) gave a non-revealing speech, and then the watchful Senator Robert Dole appeared, executing a disciplined traverse of the room without so much as sipping a drink or touching a cauliflower tip. Dole has mastered the noncommittal bonhomie that is the preferred style of the influential politician on public display. He cracked a few jokes. He signed autographs. (Some constituents from outside the Beltway seemed to have made their way into this Upper Room.) He listened gravely as senior aides put on little displays of importance by whispering in his ear. And he gave nothing away. He exchanged a few words with the eye-patched U.S. Chamber of Commerce economist Richard Rahn (a possibility to replace David Stockman at the Office of Management and Budget) and was gone before you could make a nondisciplined return trip to the bar.

With the tax code once again under revision, I went to a Capitol Hill reception in the new Senate Office Building to see if I could find out anything of interest. Practically every staffer on the Senate Finance Committee seemed to be on hand. These are the people who actually write the tax laws, but you don’t learn much from them; any more than you would be able to discern future economic trends from the floor of the New York Stock Exchange on a busy day. It is not that Finance Committee aides know things they are too discreet to tell you. They know only too well the political uncertainties ahead: the difficulty of foreseeing the net outcome of constituency pressure, special-interest lobbying, and senatorial whim. So they stand about contentedly at the eye of the gathering political storm, nibbling crudités and crackers, swapping stories about their bosses, and letting stray seekers-after-truth know, with cynical shrugs, that the guessing game is also a mug’s game.

Finance Committee chairman Senator Robert Packwood (pants too short in the patrician style) gave a non-revealing speech, and then the watchful Senator Robert Dole appeared, executing a disciplined traverse of the room without so much as sipping a drink or touching a cauliflower tip. Dole has mastered the noncommittal bonhomie that is the preferred style of the influential politician on public display. He cracked a few jokes. He signed autographs. (Some constituents from outside the Beltway seemed to have made their way into this Upper Room.) He listened gravely as senior aides put on little displays of importance by whispering in his ear. And he gave nothing away. He exchanged a few words with the eye-patched U.S. Chamber of Commerce economist Richard Rahn (a possibility to replace David Stockman at the Office of Management and Budget) and was gone before you could make a nondisciplined return trip to the bar.