THE HOUSE Democratic caucus took time out this past week from budget cutting to indulge in a bit of nostalgia. In between their other duties, the 152 members at the caucus voted unanimously against any move to subject Social Security benefits to taxation, and directed the Ways and Means Committee to act accordingly.

They have got to be kidding. Of all the ways to trim Social Security, some version of taxation is the most sensible. It is the least damaging to those who rely on the system for the bulk of their income, because the income-tax structure is progressive. Those people whose Social Security benefits are only a marginal addition to their income will be the ones who will pay. Even if you limit taxes to those with relatively high total retirement incomes, the fiscal stability of the system would be improved substantially. For example, if a tax were imposed only on the Social Security benefits of those with $30,000 or more in retirement income (mostly from sources other than Social Security), about $1 billion would be returned to the Treasury. If the line moved down to $20,000, almost $2.5 billion would come in.

The Social Security Advisory Council last fall recommended that 50 percent of the amount of an individual's benefit be subject to tax. This proposal was based on the fact that the employers' share of contributions to Social Security is exempt from taxation, while employees have already paid income tax once on the contribution they made to the system. The Advisory Council's proposal deserves to be taken seriously. The council is not given to rash judgments; it is made up of eminent, well-informed scholars and statesmen who are generally considered to be protectors of the Social Security system against the budget-cutting excesses of any given administration. In fact, when President Carter in his 1980 budget recommended several relatively small cuts in Social Security benefits, one of the main complaints of those fighting the cuts was that the Advisory Council had not been consulted.

Well, the Advisory Council has now spoken. Those who think seriously about the future of the most important social program of our government would be wise to listen.