Tax Reform: What it Means

President Reagan dubbed his revised tax reform plan, released in a presidential address to the nation in May of this year, as a "Second American Revolution." Harvard regards it as one of Reagan's most devastating policy proposals to date.

The present internal revenue code, 2,052 pages long and decades in the making, is for some the symbol of government bureaucracy at its most inefficient. But it has the staunch support of diverse special interest groups which benefit from tax deductions for everything from cow breeding to three-martini business luncheons.

The University is one of those special interests, and given that money for about 20 percent of Harvard's $585 million annual expenditures comes from charitable contributions, it has special reason for concern.

If Reagan gets his way, however, the Administration's "revenue neutral" tax reform would include:

* a reduction of corporate and individual taxes, the lowest bracket paying only 15 percent, and the highest no more then 35 percent,

* a reduction in the capital gains tax to 17.5 percent,

* and the elimination or cutback of virtually every tax deduction, including those for state and local taxes.