MR. REAGAN has now demonstrated that it is theoretically possible, under certain assumptions, to cut taxes deeply and still balance the budget. The assumptions are highly unrealistic but, for the moment, that appears to be secondary. Economic goals set in the heat of election campaigns are at best semi-serious. President Carter's tax reduction program two weeks ago belongs to the same evanescent category.

Earlier this summer, Mr. Reagan stole the tax issue from the Democrats by embracing the Kemp-Roth plan to cut individual income taxes 30 percent over three years. The White House denounced the idea as an engine of inflation and a formula for a permanent budget deficit. Mr. Reagan remained unrepentant. Mr. Carter then brought out his own tax reduction proposals -- more cautious, and intended to seem more responsible. The White House then followed with an assault on the Reagan plan suggesting that it required huge and destructive cuts in social spending.

Mr. Reagan's reply is the strategy paper he published this week. His figures run through the next presidential term, showing those tremendous income tax decreases beginning next year plus some tax benefits for business. The reductions in spending are significant but not dramatic. As a statement of intention, it indicates no central attack on any of the big programs -- that is, the pensions and health care. The budget comes to balance within two years.

What's the magic that makes it work? It's exactly the same old magic employed by Mr. Carter four years ago to arrive at his own former prospectus for lower tax rates and a balanced budget. Like Mr. Carter's calculations in 1976, Mr. Reagan's present figures are based on extremely high estimates of this country's economic growth over the coming years.

Mr. Carter's 1976 plan required the total economic output of the country -- the gross national product -- to rise steadily at well over 4 percent a year. His struggles to achieve that rate, by cranking the economy harder and harder, made a substantial contribution to the present inflation rate. Mr. Reagan's current plan seems to require an even higher rate of growth.

What's a reasonable estimate of future economic growth? The trend rate for non-inflationary growth is now, at best, around 2.5 percent. Any attempt to push the pace faster can be expected, once again, to result in faster inflation.

On the central economic issues, the Democrats and the Republicans have each now seized the traditional position of the other. Mr. Carter's recent tax cut proposals give most of the benefits to business, on grounds that the economy urgently needs more investment. Conversely, Mr. Reagan is putting his faith mainly in individual income tax cuts to raise consumption, lift the growth rate and shower down upon the country all of growth's dividends. The two teams have taken their positions and the game is under way -- but, strangely, they seem to be wearing each others' shirts.