THE NEXT version of President Carter's 1981 budget, providing for a substantial tax cut, is to be published later this month. The administration resists calling it his third budget for the year. Strictly speaking, it's only his second-and-a-half.

The first budget, published as usual in late January with a $16 billion deficit, was too inflationary. There was something close to a panic in the financial markets. Interest rates shot up to unprecedented heights, and the congressional budget committee forced Mr. Carter into a hasty revision. That was the second edition -- the balanced budget that appeared in mid-March. Now because Ronald Reagan is pushing his own large -- and highly inflatlionary -- tax cut plan, the Democrats in the Senate want one of their own.Mr. Carter's response to them is evidently going to be a waffle. The July revision of his March budget is being drafted to accommodate a tax cut, without actually proposing or endorsing one. It's as though Mr. Carter were perversely using the budget to give substance to all the canards about his alleged inconstancy. He would be wiser simply to declare the obvious -- that Congress cannot possibly produce an acceptable tax bill in the short time remaining in this session -- and that he will veto anything Congress attempts to pass. It's a subject for next year.

The conventional view is that a tax cut is always wildly popular and profoundly helpful to any candidate. But is that really true? Americans now have a choice between a tax cut and lower interest rates. They are not going to get both. Both the Reagan campaign and its Democratic imitators seem to have missed the truth.

Just as the prospect of widening federal deficits pushed interest rates up last winter, so the prospect of a large and careless tax cut may well push them up again next fall. There are already signs in the financial markets of nervous anticipatory movement in that direction. It's a kind of upward creep that the Federal Reserve Board cannot effectiviely restrain through routine manipulation of the money supply. It is not caused by a tight supply. It is an attempt by lenders to insist on interest sufficient to cover the inflation that they see ahead.

Most people would welcome lower taxes, but for a great many Americans this summer a drop in interest rates is far more urgent. That's true for farmers and small businessmen. It's true for the people who want to buy houses and for the people who build them. High interest rates are severely aggravating the manifold troubles of the automobile industry.

While a tax cut will be necessary next year, it will have to be constructed carefully to avoid another surge of inflation as the economic recovery gets under way. Tax rates and interest rates are now on a seesaw. If everybody jumps heavily onto the tax cut end of that seesaw, it will send interest rates spinning back up into the air again. For economic growth and higher employment, a tax cut this year is less important than getting interest rates down.