LAST WEEK Sen. Moynihan introduced a new, bigger version of the tuition tax credit bill in the Senate. It is twice as big as last year's model, providing for a $500 tax credit for graduate students and part-time college students, as well as elementary and secondary school and full-time college students. Support for the senator's bill seems stronger this year despite the proposal's $5 billion price tag.

What Sen. Moynihan's bill would do, in essence, is reduce the special financial burden borne by parents who send their children to parochial and private schools. The bill limits the tax credit to covering half the cost of parochial or private school tuition. Theoretically, this would allow Americans greater freedom to get the best education available for themselves and their children. As distinct from the similar tuition voucher system, the tax credit plan would not harm public schools, its proponents argue. They reason that it does not contain a big enough sum of money to prompt anyone to apply to private school who would not ordinarily have done so.

Sen. Moynihan's decision to double the amount of the tax credit in this latest proposal gives a hint of why this agreement fails to reassure. If Congress can double the amount of the tax credit now, it can double it again at a later date. The next tax credit proposal could be for $1,000 or for an amount equal to the cost of a student in public schools. In addition, no one knows how many people would take advantage of the tax credit. This is an entitlement program of unknown dimensions that could become a great drain on the Treasury at a time when the government is trying to balance the budget. Tax credits, in our view, won't help people in public schools, and those leaving the public schools may not benefit as much as they might think, since private and parochial schools are likely to absorb the value of the tax credit by raising their tuition. You will have guessed we think the Senate should reject this bill.