In "The Democrats and Joe Lunchbucket" {op-ed, Oct. 29}, Mickey Kaus, senior editor of the New Republic, wrote, "among America's major industrial competitors, only Sweden taxes the rich at rates in the range that would be required to bring American inequality back to its 1977 level." He estimated the necessary tax rate would be more than 55 percent.

When did Sweden become a "major industrial competitor"? Our major competitors, West Germany and Japan, tax their wealthiest citizens at 70 percent and 56 percent, respectively, according to the October 1989 issue of Dollars & Sense. Of course, Mr. Kaus didn't report this fact, because it destroys the belief that taxing the wealthy reduces productivity, one of the great fictions of supply-side economics.

The problem in the United States is that we receive so little for what we do pay. As a percentage of gross domestic product, our "welfare state" is one of the most poorly funded in the world, according to 1983 figures released by the International Labor Organization (the most recent figures available). When compared with expenditures for social programs in Sweden, France, West Germany, the United Kingdom, Canada and Japan, the United States ranks next to last. Among these nations, the United States is last in the percentage of GDP devoted to sickness and maternity care and is the only country not to provide an allowance for families with children, regardless of the employment status of the parents or the number of parents in the home.

Finally, if Mr. Kaus insists on comparing the United States to Sweden, perhaps he would not be so quick in pointing out that income inequality is something we'll just have to accept. Sweden has not only almost eliminated poverty but also has made an effort to equalize incomes through governmental policy.