Is American literature doomed? You may have gotten that impression from a hysterical campaign by America's leading authors -- not against illiteracy or AIDS, but against an obscure footnote in last year's tax reform. Writing in Newsweek, Kitty Kelley declares: "Had this law been in effect when I was working on my first book, 'The Glamor Spas,' " that opus might never have been written. Sensing, perhaps, that this is not the strongest possible argument, she goes on to assert that Faulkner would never have written "The Sound and the Fury," either.

Literati across the political spectrum -- Edmund Morris to Arthur Miller -- are united in this crusade. William L. Shirer says that he may give up writing and "try to scratch out a living doing something else." But David Halberstam says the real concern is for future generations: "I will survive. . . . But it is a lot harder for someone 30 years old who is coming behind us." The Authors Guild notes that the average writer makes a mere $7,900 a year.

These literary types know how to work themselves into a frenzy. And they know how to stir up a fuss. The question is whether one overwrought author in 1,000 actually understands this issue they're so riled up about. Shall we calm down and talk this one through?

The footnote in question says that "creators" of literary properties must wait until a project generates income before they can deduct their expenses. For books and plays, that can be years. Under the old rules, authors could deduct all their expenses right away.

The new rule sounds harsh, but it is sound tax policy. Expenses for a book are like an investment. You don't get to deduct an investment when you make it. Instead, you subtract the amount you invested from your gross revenues, when they come in, to figure your net profit. A key idea of tax reform was to apply this principle across the board. President Reagan's 1981 "accelerated depreciation" rules, which have littered the American landscape with empty office buildings and resulted in many corporations paying no taxes at all, were disastrous precisely because they violated this principle. Any time deductions are allowed ahead of the income they relate to, you have in effect created a tax subsidy.

"They are treating authors the way they treat a manufacturer of toasters," complains novelist William McPherson. That is correct. A fair tax system is one that treats everybody the same. You don't hear the toaster makers warning that Americans have browned their last Pop-Tart.

The authors are on firmer ground when they complain that the new rule is a bookkeeping nightmare. They must segregate their expenses among different writing projects and make impossible calculations about how long each one will take to pay off. They're also right to complain that lawyers and doctors are allowed immediate deductions for most expenses. But the literati are practicing three tiresomely familiar ploys of Washington special pleaders.

First, the big guys are hiding behind the little guys. Deductions ahead of the relevant income are only useful if you've got other income to deduct them against. Any writer who truly lives on $7,900 pays no taxes at all. Under current rules, up to $10,000 a year in necessary business equipment -- floppy disks, copies of "Pride and Prejudice" -- can be deducted right away, no questions asked. This footnote matters more to Kitty Kelley and David Halberstam than to some struggling young poet in a garret.

Second, the authors are crying wolf. Shocking as this may be to practitioners of literature, there are other industries -- oil, farming, real estate, who knows? maybe even toasters -- whose members also sincerely believe they are the linchpin of American civilization, and that life as we know it is over unless they get some bit of legislation. Some writers may be hurt by the new tax rule. But the future of literature is not at stake. Any writer who would actually abandon the craft rather than tolerate deferred expense deductions must not have anything very important to say.

Third, it's a hoary device to complain about the complexity of a tax rule when your real objection is that it will cost you money. Farmers, for example, get immediate write-offs for many expenses on the grounds that these simple-hearted peasants are too dimwitted to handle accrual accounting. Huge farms with more computers than cows save millions in taxes this way.

Two simple rule changes would address the authors' legitimate gripes without betraying the principles of tax reform. One is to allow an immediate deduction for, say, $5,000 a year of writing expenses. This would solve the problem for all but the most prosperous writers. Second would be to set some arbitrary period -- say, five years -- over which they could write off long-range book expenses, rather than making them guess. Obviously the same rules should apply to doctors and lawyers as well.

Now, boys and girls, shall we get back to our word processors? Literature awaits.