ADMINISTRATION REVERSAL CAN APPLY TO OTHER TAXES

In an administration where symbolism carries considerable weight, a decision made last week earned a nice bit of self-congratulations. However, the true measure of President Clinton's reversal of opinion on taxing ethanol as part of his energy package would be the extension of his thinking to several succeeding steps ... such as, deciding an energy tax is no way to close the budget gap.

As part of the president's $500 billion deficit-reduction plan, ethanol was among the forms of energy targeted for taxation. Farm-state lawmakers wanted ethanol added to a list of renewable resources (such as solar and wind power, and a few others) that were exempt from the revenue program. When President Clinton finally saw it that way last week, he drilled into a gusher of enthusiasm, at least from lawmaking partisans. "By George, this is a White House that listens," raved Sen. Paul Simon of Illinois, whose state is the nation's leading producer of ethanol.

With such primed and boisterous promotion, President Clinton was able to portray himself as flexible on an issue near and dear to Middle Americans. But look at the modest price of his change in attitude; the ethanol tax amounted to just a fraction of a penny per gallon of gasoline and would have produced just $80 million in revenue over the next five years. As public relations goes in Washington, that's a bargain.

So, what might reasonably be said of President Clinton's new-found view of ethanol? For one thing, he chose right. Ethanol is made from corn, and corn, unlike fossil fuels, has no finite life; its development as a fuel source should be encouraged, and a tax only hinders that. By the same token, enactment of any tax on energy as a means of trimming the federal budget deficit seems immediately more punishing than useful.

With optimism, you would have to say the president's switch on the ethanol issue is a good start ... were it only that he would now reverse himself on his overall policy on taxation.