Is there no end to The Post's errors on capital gains taxation? Why did The Post publish the letter by David Frankel of the Economic Policy Institute {July 29}? Mr. Frankel condemns the worthy proposal to index capital gains against inflation on the grounds that capital investors are already favored over investors who earn interest. The numerical example he constructs to favor his case is obviously loaded. A 10 percent return on stocks is not reliably obtainable. Stocks are risky investments. If American stockholders are unfairly favored by our tax system, why does our nation have to rely on foreigners for capital?

More serious is the fact that Mr. Frankel overlooks the obvious remedy for any such bias: Index the taxation of interest as well as of capital gains. Could it be negligence that Mr. Frankel, ostensibly a professional economist, fails to suggest this? Or is he a disingenuous ideologue bent on soaking ''rich'' investors?

The Post was morally delinquent itself when it suggested {editorial, July 16} that capital gains should be indexed -- so far, so good -- but not retroactively. This would reward young investors and punish old ones -- hardly an example of fairness in taxation. Yuppie editorialists and far-left lobbyists, cushioned by large salaries, get to pontificate on the pages of The Post, while we small investors with small incomes have no voice, but have to pay the consequences in unjust and confiscatory taxes on our savings.

JAMES E. FELTEN Greenbelt