The Reagan administration has proposed some major changes in the federal tax structure as part of its economic plan for the early 1980s. This article discusses the effects of these tax cuts on federal revenues. Because the exact form that the tax legislation will take depends on the actions of Congress, the focus of this article is on the effects of the original proposal as presented in March 1981. By way of background, trends in revenues for the last 25 years are summarized and discussed. This period is chosen for historical reference for two reasons: (i) it is long enough to encompass sufficient economic experience so that trends in the federal revenue structure are clearly discernible and (ii) by starting in 1955, it avoids the effects of distortions of the tax structure resulting from World War II and the Korean War. Although this period includes the Cold War of the 1950s and the Vietnam War of the late 1960s, it primarily reflects peacetime conditions in the U.S. economy.