TAX CREDITS: TARGETING TAXPAYERS AND POLLS

In his effort to give something to everybody, President Clinton announced so many goodies in his State of the Union message that it was difficult to keep up with all of them. It became clear, however, as the speech went on, that the president believes in tax cuts -- not in the form of reducing taxes, but in the form of tax credits for certain groups of individuals who happen to fit whatever social-engineering scheme the White House has cooked up based on the latest polls.

Tax credits are not all bad. One reason home ownership is so popular in this country and why most houses are heavily mortgaged is because the government allows taxpayers to deduct mortgage interest from taxable income, thereby lowering tax bills significantly.

Among the Clinton proposals are tax credits for stay-at-home parents, long-term care of disabled people, business investment in certain low-income areas, businesses that hire the handicapped and buyers of bonds used to finance the setting aside of natural spaces.

All together, these credits, by the administration's own estimate, would cost at least $10.5 billion over five years. Or as much as $30 billion by the time everything is calculated.

The difference here is methodology. What Clinton and his Democratic supporters have learned, with a Republican majority in Congress, is that new programs that simply write checks to beneficiaries of his spending policies won't get passed. The focus of Republicans in Congress has been to reduce government programs rather than increase them.

So tax credits are, in the president's way of thinking, the next best thing.

One of the tax-credit proposals in particular is troubling. It is the one that would give a tax credit for child care even if the mother stays at home. This would, the administration says, encourage "traditional" families in which father goes to work and mother stays home and raises the children.

Already, parents who work and place their children in child care can claim a tax credit, which can be viewed not only as a financial break for families where both parents or single parents work, but also an incentive for mothers in two-parent families to get a job.

A closer examination of Clinton's new proposal shows how flawed social engineering can be. The plan is to give mothers who stay at home a tax credit for taking care of a child who is under a year old. This may sound pro-family, but in reality it encourages that same mother to look for a job after the child's first birthday in order to keep getting tax credits for child care.

If the president -- or anyone else -- really wanted to encourage "traditional" families, he would suggest larger tax credits for stay-at-home mothers, regardless of the age of the children she cares for, than the credits given for child-care expenses in households where both parents work.

Sadly, this is another example of the president's never-ending effort to have it both ways. And, sadly, many Americans will praise him for trying. And, saddest of all, representatives and senators are likely to go along, because they watch the polls too.