The Savings and Loan Foundation is urging Congress to give small savers some tax relief.

The foundation thinks Congress should permit the creation of tax-free savings certificates. One who has saved money would be permitted to earn tax-free interest on it.

If this seems reasonable to you, you'll have to let your legislators know how you feel about it. For decades, our national and state legislatures have been passing tax laws that encourage spending, not saving.

The tax code considers interest on savings "unearned." At the national level it can be taxed at 70 percent, although the maximum income tax on salaries is "only" 50 percent.

Our tax structure has been askew for a long time. If you earn a dollar, it is taxed. If you spend the dollar to buy a product or service, that has already been taxed several times, your dollar is taxed again. If you put the dollar into a savings account, the interest it earns is deemed to be "unearned," and it is taxed. And if you put your dollar to work in American industry, as economists urge, the money you earn is also "unearned," and is doubly taxed.

"Investing in American industry" means pooling your dollars with those of other investors who are willing to take a risk. If the investors make a profit, they pay a tax on that profit as a group (company). Then if there's enough left for the group to pay a cash dividend to investors for the use of their money, each individual's dividend is taxed again.

If your company serves the public well and prospers, the price of its stock may go up. After 10 or 20 years, you may be able to sell your stock for double or triple what you paid for it. But you will lose on the investment anyhow because you will be taxed on your capital gain, even though the dollars you get back are worth only half as much, or a third as much, as the dollars you invested.

Example: Instead of buying a new mid-sized car for $3,000 you "invest in American industry." If you're lucky, after 10 years your stock may be worth $6,000. However, although $6,000 will no longer buy a mid-sized car, there will be a tax on your "profit."

Isn't that a great incentive for investing in American industry? Is it any wonder that the average wage earner has decided that the only way to live with our tax structure is to buy consumer goods instead of trying to save and invest? The modern philosophy is to buy now, before inflation drives prices higher, and it is the direct out-growth of our tax system.

Proposals to permit tax-free interest on savings have always been attacked as "tax relief for the rich." That's pure baloney.

The rich don't put their money into savings accounts that pay just over 5 percent. The rich are in money market funds that pay 16 percent. Or they are in Treasury notes that pay even more. Or they are in tax-free mutual funds that pay 9 percent, or in individual tax-free bonds that are rated A or better and pay as much as 12 percent. For a tax-deductible fee, the rich can afford to hire tax experts who know all the loopholes and shelters that are tucked away in the small print of the tax code.

It's the little guy with the passbook savings account who has no alternatives. He gets the lowest rate of return and then is taxed on the little bit of interest that he does earn. And for good measure, he must endure the final insult: His few dollars of interest are called "unearned."

Where do our legislators think the small saver got his nest egg? Did the tooth fairy give it to him? Or did he earn it by the sweat of his brow and manage to save a small portion of it for his old age by denying himself things he might have bought with the money?

Once a person earns money and pays the tax on it, isn't he entitled to a teeny bit of surcease from our never-ending cycle of taxation?