There are always reasons why stocks fall -- and fall they did coming to the end of calendar 1984. Often, the reasons are more rationale than rational, but when weak stocks suffer further weakness at the close of a year, tax selling is a legitimate excuse. By disposing of negative positions, investors can offset capital gains with capital losses, or establish a tax-loss carryforward to offset future gains. This year's market was particularly open to such a balancing tactic, since there were substantial gains to be made, especially during the more-than-100-point DJIA rally in the Dow Jones Industrials last August. There was also ample tax-loss opportunity, as the INC. Index herein tells us. The "reason" the INC. stocks took a nosedive this month was such tax-loss selling.

It had nothing to do, of course, with the government's flat-tax trial balloon dropped in November right after the election. Advantageous capital-gains treatment was a target of Treasury Secretary Donald Regan's tax proposal, and smaller start-up companies, often in need of attracting later-round financing through the sale of common stock, were direct hits. Naturally, the speculative branches of the stock market didn't like the notion. Without kind tax treatment, nobody would undertake the venturecapital fliers that launched the businesses that launched the bull market in 1982.

Which is a good reason why the INC. Index is scraping the bottom of the page. Surely, Messrs. Regan and Regan will take pity.