Cover Stories

How will President Reagan's proposal affect me? That was the question millions of Americans were asking themselves last week. The accounting firm of Coopers & Lybrand did a study for TIME based on computer models of how some typical taxpayers fare under current laws and how they would do if the President's program is adopted. The results:

CURRENT TAX

$1,778

PROPOSED TAX

$1,680

A family of four in Moline, Ill., with a total income of $25,000. They now pay $1,611 in state and local taxes and $5,400 for interest on their mortgage. The family has charity donations of $500 and no Individual Retirement Accounts.

CURRENT TAX

$3,527

PROPOSED TAX

$3,045

A young, single executive in New York City with a salary of $25,000 who rents an apartment. He pays $2,056 in state and local taxes. While he currently itemizes deductions, he would switch to a short form under Reagan's proposal because state and local taxes would not be deductible.

CURRENT TAX

$8,024

PROPOSED TAX

$10,250

A childless couple in Los Angeles with a combined salary of $82,000 and rental income of $10,400 from an apartment they own. They use the long tax form because of their many deductions. They pay $32,684 in interest on their house, two cars, personal loans, credit-card accounts and the rental property. The couple pays $4,952 in state and local taxes.

CURRENT TAX

$445

PROPOSED TAX

$0

A retired factory worker and his wife in Delray Beach, Fla. They have partially tax-exempt income of $18,000 from a pension and Social Security. In addition, they earn $2,500 in interest on their savings. The couple has no mortgage and no interest payments on autos or credit cards. They file a short tax form.

CURRENT TAX

$4,699

PROPOSED TAX

$4,625

A two-income family of four in Gaithersburg, Md., with total income of $60,000. They pay $4,535 in state and local taxes, take a $960 tax credit for child-care costs and have interest deductions of $15,000 on a mortgage, a car loan and an old college loan. The group health insurance provided by their employers would add $300 to their taxable income under Reagan's proposal.

CURRENT TAX

$27,302

PROPOSED TAX

$22,155

A family of five in Greenwich, Conn., with an income of $120,000. They are paying $7,249 in state and local taxes plus $28,000 in interest on a mortgage and various loans. In order to pay for one child's college education, they are selling some stock. The profit is currently taxed at 20% but that would decline to 17.5% under the Reagan plan. The couple's Individual Retirement Account deduction would go from $2,250 to $4,000 under Reagan's program.

CURRENT TAX

$78,928

PROPOSED TAX

$67,926

A family of four in Palo Alto, Calif., with an income of $306,000. They now pay $31,200 in mortgage interest on their home and an additional $13,000 interest on a vacation house and other loans. Their total property taxes are $7,200. The husband pays $20,000 in alimony, and the family donates $10,000 to charity.