A bracing discussion of the tax plan that President Reagan had just unveiled. RH:

"I think that there is a picture in the minds of the Reagan Administration--a picture of the economy as a kind of great coiled spring. It's held down by two weights: one is the weight of government spending and one is the weight of taxation. Take away those weights and the spring will expand, and the forces of growth will unleash themselves. My feeling is that when you take away the weight of government spending, you find that some of the tension goes out of the spring; and when you take away the weight of taxation, you find that the spring doesn't begin to expand to the extent that you thought." .. . LT: "I would be willing, in a world where you essentially shift towards consumption taxes, to bring the capital-gains tax on productive venture capital, plant, and equipment--I would even bring it to zero. On the other hand, I think the tax on non-productive investments--antiques, old silver ... land, gold, second homes--ought to be very high because I think there's a real litmus test as to whether somebody's serious about supply-side economics, and that is, Which of the many tax incentives for nonproductive investments would you be willing to get rid of? If you give me the answer, 'None,' then I say, 'Look, you don't have any real serious interest in supply-side economics.' "