PROSPECTS FOR TAX REFORM AND THE DOW JONES AVERAGES (see chart)
1/2/85 Down 12.70 GOP Senate leadership planning to challenge Reagan with alternative budget; tax hike option for deficit reduction resurrected.
1/3/85 Down 9.05 Stockman briefs GOP legislators on budget — Dole: "worse than I thought." Chafee and Hatfield: "Tax increases may be necessary."
1/7/85 Up 5.63 Don Regan gets Presidential backing for negotiating bi-partisan tax revision with Kemp and Bradley.
1/9/85 Up 11.04 Jim Baker-Don Regan switch; Stockman seen as loser, tax reform as winner.
1/10/85 Up 20.76 Reagan's press conference prior evening: Baker and Regan described as "totally dedicated ...to tax simplification:" President says keeping tax rates down will feed economic upsurge. Volcker acknowledges sustained economic growth doesn't portend return of inflation.
1/14/85 Up 16.45 Dole declares Congress won't produce tax increase in '85: "the chances are zero."
1/15/85 Down 3.75 But, says Dole, '86 is another matter.
1/21/85 Up 34.01 Reagan's upbeat Inaugural Address: U.S. needs simplified tax code with lower rates.
1/23/85 Up 15.23 Jim Baker's confirmation hearing for Treasury Secretary: declares tax reform "an equal priority." Open to modifying unfavorable aspects of proposed tax reform.
1/24/85 Down 4.30 Dole: forget tax reform for '85. "I don't know of four votes it has on the [Senate Finance] Committee." Deficit reduction the first priority.
1/28/85 Dow opened 1276.06. 1 p.m. EST up to 1284.12. 2 p.m. EST Dow wire summary of Preston Martin interview -- suggests Martin favoring credit tightening: down to 1270.21 3 p.m. EST — Dow wire carries Martin's own words -- not in favor of tightening: up to 1274.29 Closes 1277.83.
1/29/85 Up 14.79 Kemp and Bradley announce forthcoming press conference to build bi-partisan efforts for tax overhaul.