SINCE THE Reagan administration keeps objecting that its tax program has not yet had time to work, perhaps it would be useful to take a look at the calendar. The president is quite right to say that the program is not fully in effect. Some of the cuts are staged out as far into the future as 1986. But it's quite another matter to say that little has happened so far.
To encourage investment, the tax bill greatly expanded business depreciation benefits. When Mr. Reagan signed the bill last August, large depreciation benefits immediately became retroactive to the beginning of 1981. But the Commerce Department's surveys indicate that the level of business investment, corrected for inflation, is currently sinking. Rather than leaping upward as supply-side theory predicted, investment is following the sadly conventional pattern of falling in a recession and waiting for demand to pick up.
As for personal income taxes, the rates that most affect wealthy taxpayers have also been in effect for some months. With the signing of the bill, the maximum capital gains tax dropped from 28 percent to 20 percent, retroactive to June, 1981. The top tax on income dropped from 70 percent to 50 percent on Jan. 1, 1982.
It's quite true that only very modest benefits of the tax reduction have yet reached the great majority of taxpayers. They got the 5 percent cut last October, and they will get another one of roughly 10 percent on July 1. In terms of economic politics, a great deal depends on the public reaction to that cut. If there is a strong and sustained increase in savings, it will save the supply-side theory. But to make the theory work properly, savings would have to rise faster than the federal deficit that they have to finance. If that doesn't happen, the administration will have to find another plan to restore growth to the economy. It's still a bit early for a final judgment on the great experiment that the 1981 tax cut represented. But major elements of that tax cut have been in effect for some considerable time, and the experience so far is not encouraging.