1. Steven R. Weisman, "Reaganomics and the President's Men," New York Times Magazine, October 24, 1982, pp. 26-29, 82-85, 89-92, 109.

2. Howell Raines, "Reagan Orders Staff to Repudiate Report of Compromise on Tax Cut," New York Times, April 14, 1981, pp. A1, D13.

3. For detailed tables, see National Journal, July 25, 1981, p. 1349, and August 8, 1981, p. 1410.

4. Inflation was also driving poor people into brackets where they would be taxed when they had not been taxed before.

5. Robert W. Merry, "Rostenkowski and the Tax Bill," Wall Street Journal, March 97, 1981, p. 26.

6. Ibid.

7. Robert W. Merry and Burt Schorr, "Pension Pains: Congress, Reagan See Need to Cut Benefits Paid by Social Security," Wall Street Journal, May 10, 1981, pp. 1, 12.

8. Peter Goldman, "The Reagan Steamroller," Newsweek, May 18, 1981, pp. 38-40.

9. Robert W. Merry, "Mr. Chairman: Senator Robert Dole Plays Major Role in Future of Reagan Tax Bill," Wall Street Journal, July 14, 1981, pp. 1, 15.

10. Barrett, Gambling with History, pp. 166-67; Stockman, Triumph of Politics, pp. 238-40; and Walter Isaacson, "A Less Than Perfect' 10-10-10,"' Time, June 1, 1981, p. 16, 21.

11. "The Best-Laid Plans ...: Negotiations toward a bipartisan tax cut go astray," Time, June 8, 1981, p. 19.

12. Ibid.

13. Martin Schram, "Leading the Democrats: Rostenkowski Plays 'Palm' to O'Neill's 'Oak,'" Washington Post, June 8, 1981, pp. A1, A2.

14. On Rostenkowski, see ibid.; "The Sultan of Swap," Time, June 1, 1981, p. 21.

15. Peter Goldman, "Tax Cuts: Reagan, Digs In," Newsweek, June 15, 1981, pp. 26-27.

16. Ibid.

17. Richard E. Cohen, "A Reagan Victory on His Tax Package Could Be a Costly One Politically," National Journal, June 13, 1981, pp. 1058-62.

18. Art Pine and Lou Cannon, "Reagan, Democrats Unable to Agree on Terms for Tax Cut," June 2, 1981, pp. A1, A3; Art Pine and Lee Lescaze, "Democrats Ease Stand On Tax Cut," June 3, 1981, pp. A1, A4; and Art Pine, "Reagan Rejects Plan By Hill Democrats for 15% Tax Cut," June 4, 1981, pp. A1, A4; all in Washington Post.

19. Stockman, Triumph of Politics, p. 249.

20. Ibid., p. 247.

21. A tax credit allows the payer to deduct from taxes, not from income, some portion of the cost of an investment. A 10 percent credit on a million dollar item is worth $100,000. At a tax rate of 40 percent, a 10 percent deduction would be worth 40 percent of that, or $40,000. The combination of tax credits up front with 10-5-3 depreciation is what gave the Reagan plan its negative rates.

22. Caroline Atkinson, "Argument for Tax Cut to Aid Business Weakened by New Statistics," Washington Post, February 5, 1981, p. A2.

23. Ibid; Robert R. Samuelson, "Business Tax Cuts—Needed Stimulant or Poorly Conceived Boondoggle?" National Journal, April 4, 1981, pp. 556-61. For the pro-10-5-3, see various Martin Feldstein Wall Street Journal articles, including July 15, 1981. Details in CQA 1981, p. 96.

24. See Lee Lescaze and Art Pine, "President Challenges Democrats," June 5, 1981, pp. A1, A7; John Berry, "Business Tax Break Cut 33% In Revised Depreciation Plan," June 5, 1981, pp. C8, C9; and Art Pine, "Tax Relief Restoration Is Proposed," June 9, 1981, pp. D6, D8; all in Washington Post.

25. Cohen, "A Reagan Victory on his Tax Package Could Be a Costly One Politically."

26. Steven R. Weisman, "Reaganomics and the President's Men," New York Times Magazine, October 24, 1982, pp. 26-29, 82—85, 89—92, 109; Barrett, Gambling with History, pp. 164-65.

27. Barrett, Gambling with History, pp. 171-72. Also see Greider, Education of David Stockman.

28. Art Pine, "'Bidding War' Is Seen During Markup of Bills," Washington Post, June 6, 1981, pp. A1, A4.

29. Stockman describes both Baker and Regan as deferring to the president's preferences on the tax bill, and our interviews confirm that judgment. See Triumph of Politics, pp. 245-46.

30. Peter Goldman, "Tax Cuts: Reagan Digs In," Newsweek, June 15, 1981, pp. 26-27; John Berry, "Revised Proposal Offers Lower Federal Deficits," Washington Post, June 6, 1981, pp. A1, A4; Pine, "'Bidding War' Is Seen During Markup of Bills"; Lou Cannon, "White House Expects Long Tax Cut Battle, Readies the 'Hard Sell,'" Washington Post, June 7, 1981, p. A5; Peter Behr, "Compromising on Taxes," Washington Post, June 8, 1981, pp. A1, A2; Pine, "Tax Relief Restoration Is Proposed"; Art Pine, "Some Hill Democrats Switch on Tax Relief," Washington Post, June 10, 1981, p. A3; Art Pine, "Reagan's Tax Plan Gets a Mixed Reception," Washington Post, June 11, 1981, p. A6; and Claudia Wallis, "The Marine Has Landed: As the tax-cut battle heats up, Donald Regan warms to his task," Time, June 22, 1981, p. 13.

31. Martin Schram, "Leading the Democrats: Rostenkowski Plays 'Palm' to O'Neill's 'Oak,'" Washington Post, June 8, 1981, pp. A1, A2.

32. Art Pine, "In Tax Debate, the Democrats Are Where the GOP Used to Be," Washington Post, June 12, 1981, p. A3.

33. Michael Kinsley, "Compromising Positions," New Republic, June 2O, l981, pp. 9-10.

34. Caroline Atkinson and John Berry, "Senate Panel Backs Reagan Tax Plan," Washington Post, June 19, 1981, pp. A1, A5.

35. The details were fuzzy because the committee was in the early stages of designing a proposal, not in formal markup. Reports were slightly contradictory, e.g., over the timing of various proposals. See CQA 1981, pp. 9899; John W. Berry, "Basic Shift on Business Taxes Gains," Washington Post, June 18, 1981, pp. A1, A5; "Rival business tax cuts would cost the same," National Journal, June 27, 1981, pp. 1174-75.

36. Atkinson and Berry, "Senate Panel Backs Reagan Tax Plan."

37. See ibid.; and John Berry, "Tax-Cut Debate No Longer Over 'Whether' But 'How,'" Washington Post, June 21, 1981, p. GI.

38. Peter Behr, "Reagan's Advisers 'Puzzled' by High Rates' Persistence," Washington Post, July 15, 1981, p. E1.

39. CQA 1981, p. 101.

40. See, for example, the Congressional Record for June 23, 1981, pp. S13249-64, in which the Democrats made a record of their support on the floor.

41. Stockman, Triumph of Politics, p. 253. See also CQA 1981, pp. 97-98; Robert J. Samuelson, "Death and Taxes—An Instructive Tale About How Congress Makes Tax Policy," National Journal, July 4, 1981, pp. 1192-96.

42. Congressional Record 1980, p. S17138, and comments of Mr. Armstrong, June 26, 1980, p. S17161, pp. S17164-66.

43. Ibid., pp. S17164—65.

44. Stockman, Triumph of Politics, p. 254.

45. Congressional Record, July 16, 1981, p. S1612.

46. See Tables V-1 and V-3 in "General Explanation of the Economic Recovery Tax Act of 1981," Staff of the United States Congress Joint Committee on Taxation, Committee Print (Washington, D.C.: U.S. Government Printing Office, 1981). Indexing was not as important as the estimates suggested, for inflation turned out to be lower than anyone had anticipated.

47. Walter Isaacson, "Big Battles on Two Fronts," Time, June 29, 1981, p. 21.

48. Caroline Atkinson, "Dole Hopes to Pass Tax Bill in 2 Weeks, Beating the House," Washington Post,. July 3, 1981, p. A7; Caroline Atkinson and Lou Cannon, "White House Quickly Squelches GOP Talk of Tax Compromise," Washington Post, July 10, 1981, pp. A1, A7.

49. CQA 1981, pp. 98-99.

50. Peter Behr, "Limited Straddle Curbs Voted," Washington Post, July 11, 1981, p. D7; Thomas Edsall, "Reagan Goes To the Hill On Tax Bill," Washington Post, July 25, 1981, pp. A1, A10.

51. See Robert Prinsky, "Industry Pushes to Persuade Congress To Accept Its Tax-Straddle Proposals," Wall Street Journal, July 31, 1981, p. 32, for the industry's side.

52. Margot Hornblower, "A Boll Weevil," Washington Post, July 27, 1981, p. A5.

53. Sources for numbers here, which are, as usual, a bit fuzzy, include Samuelson, "Death and Taxes—An Instructive Tale About How Congress Makes Tax Policy"; "Congress Decorates the Christmas Tree a Little Early," National Journal, July 4, 1981, p. 1194; CQA 1981, pp. 98, 100-2; Robert W. Merry, "Congress Clears Reagan's Tax-Cut Plan, Rejecting Traditional Economic Policies," Wall Street Journal, July 30, 1981, pp. 3, 12, 14, 16; Thomas B. Edsall, "Republicans Control Tax Legislation," Washington Post, July 26, 1981, p. A10; Thomas B. Edsall and Caroline Atkinson, "Ways and Means Democrats Bend a Bit on Tax Trims," Washington Post, July 22, 1981, p. A2; and Edsall, "Reagan Goes To the Hill On Tax Bill."

54. Who's to say what a windfall profit is? Presumably, if prices and profits plummeted, no one would suggest a subsidy to make up the difference.

55. Thomas B. Edsall and Edward Walsh, "Senate Bargaining on Tax Cut Bill Chokes Oil Bonanza, Ends Filibuster," Washington Post, July 23, 1981, p. A4; Thomas B. Edsall, "Oil Is the Issue Snagging House and Senate Tax Bills," Washington Post, July 21, 1981, p. A6; Edsall and Atkinson, "Ways and Means Democrats Bend a Bit on Tax Trims"; CQA 1981, pp. 101-2.

56. Thomas B. Edsall and Lou Cannon, "Reagan Opens Tax Bill in Bid for House Votes," Washington Post, July 24, 1981, pp. A1, A2.

57. Stockman, Triumph of Politics, p. 257.

58. Edsall, "Reagan Goes To the Hill On Tax Bill."

59. Ibid.

60. CQA 1981, pp. 102-3.

61. Edsall, "Reagan Goes To the Hill On Tax Bill."

62. Ibid.

63. "Christmastime on Capitol Hill," Time, July 27, 1981, p. 25.

64. Stockman, Triumph of Politics, p. 262.

65. Ibid., pp. 262-63. Barrett, Gambling with History, pp. 164-65, tells the same story but dates it to June 4, which seems less likely.

66. "Cutting Loose on Taxes," Editorial, Washington Post, July 22, 1981, p. A20.

67. Thomas B. Edsall, "Rostenkowski Aside, House Likes Indexing," Washington Post, July 18, 1981, p. A2.

68. "A Wealth of Tax Objections," Time, July 20, 1981, p. 23.

69. Thomas B. Edsall, "Panel Democrats Targeting Tax Cuts at Income Below $50,000," Washington Post, July 14, 1981, p. A4.

70. Peter Goldman, "Hanging Tough on Taxes," Newsweek, July 27, 1981, pp. 22-23.

71. David Broder, "The Gypsy Moths," Washington Post, July 27, 1981, pp. A1, A4.

72. David Broder, "Reagan Backs Off Televised Speech on Social Security," Washington Post, July 26, 1981, pp. A1, A5.

73. George H. Gallup, The Gallup Poll: Public Opinion 1981 (Wilmington, Dela.: Scholarly Resources Inc., 1982), pp. 118-19; Survey #173-G.

74. John F. Stacks, "It's Rightward On," Time, June 1, 1981, pp. 12-13.

75. Gallup Poll, 1981, No. 191, p. 18.

76. Broder, "Reagan Backs Off Televised Speech on Social Security."

77. Barrett, Gambling with History, p. 169.

78. Lou Cannon and Thomas B. Edsall, "Reagan Makes Appeal To Voters for Tax Bill," Washington Post, July 28, 1981, pp. A1, A6; Barrett, Gambling with History, pp. 169-70.

79. Dennis Farney, "Reagan's Mastery of Economic Policies In Congress May Sag on Social Issues," Wall Street Journal, July 30, 1981, p. 14.

80. CQA 1981, p. 103.

81. Lou Cannon and Kathy Sawyer, "President's Speech Has Hill Switch boards Ablaze," Washington Post, July 29, 1981, pp. A1, A2.

82. Ellie McGrath, "Tracking the Great Persuader," Time, August 10, 1981, p. 14.

83. Barrett, Gambling with History, p. 170.

84. McGrath, "Tracking the Great Persuader"; Cannon and Sawyer, "President's Speech Has Hill Switchboards Ablaze."

85. Ward Sinclair and Richard L. Lyons, "Tactics That Won," Washington Post, July 30,1981, pp. A1, A8; Thomas B. Edsall, "Reagan Triumphant on Tax Cut Bill," Washington Post, July 30, 1981, pp. A1, A9.

86. McGrath, "Tracking the Great Persuader"; Stockman, Triumph of Politics, p. 266.

87. Stockman, Triumph of Politics, pp. 264-65.

88. Robert W. Merry, "Congress Clears Reagan's Tax Cut Plan, Rejecting Traditional Economic Policies," Wall Street Journal, July 30, 1981, p. 3.

89. Ibid.

90. "Seizing the Helm," National Journal, August 8, 1981, p. 1404.

91. See Ward Sinclair and Richard L. Lyons, "Tactics That Won," Washington Post, July 30, 1981, pp. A1, A8.

92. Gallup Poll, 1981, No. 191, p. 20.

93. Walter Isaacson, "Yeas 238—Nays 195," Time, August 10, 1981, p. 12.

94. Sinclair and Lyons, "Tactics That Won"; and Edsall, "Reagan Triumphant on Tax-Cut Bill."

95. Broder, "The Gypsy Moths."

96. Greider, Education of David Stockman, pp. 59-60

97. Ibid.

98. See "A White House Report," Program for Economic Recovery (Washington, D.C.: U.S. Government Printing Office, February 18, 1981), p. 16; and Joint Committee on Taxation, General Explanation of the Economic Recovery Tax Act Of 1981 (Washington, D.C.: U.S. Government Printing Office, 1981), Tables V-1, V-3.

99. Isaacson, "Yeas 238—Nays 195."