Sen. Daniel Patrick Moynihan delivered a brilliant talk to the National League of Cities on March 24. He called it, "President Reagan and Chairman Morrill: A Constitutional Reflection."

The first-named protagonist is familiar. Unfortunately, not even his current beneficiaries attending the land-grant colleges he fostered would be likely to recognize the name of Justin Smith Morrill, chairman of the House Ways and Means Committee during the Civil War.

Few but Pat Moynihan would think to bring them together.

His critical point is that the Treasury's "tax simplification" plan, which the Reagan administration has all but endorsed, would do grave insult and injury to federalism.

By making state and local taxes non- deductible, thus instituting double taxation for the first time in the modern history of the federal income tax, the plan would shrink state and local tax income by "upwards of 10 percent" and perhaps more. That is Moynihan's estimate.

Unlike the sheltered Treasury gnomes who came up with this tax-reform plan, Moynihan is in touch with the real world of local government. For instance, he knows that ending local-tax deductibility would, among other injuries, "convulse the finances of school districts, that most quiet, efficient and public-regarding of all levels of American government."

School districts rely largely on local property taxes for capital costs and, to some degree, for operating costs. It is the deductibility of these taxes that keeps local property owners stoically (though none too cheerfully) paying them.

In this way and others, the Treasury tax-simplification plan is a threat to federalism; and that is where Chairman Morrill comes in.

Once, as Moynihan observes, federalism was more clearly appreciated and any menace to it more tenderly regarded. When Morrill reported the nation's first income-tax bill in 1862, amid the Union's greatest ordeal, he told the House: "The accustomed objects of state taxation should, in some degree at least, go un Otherwise we might perplex and jostle, if we did not actually crush, some of the most loyal states."

Here spoke, with urbanity, a voice of federalism that had some feel for its philosophical and practical roots. Nowadays, perplexing and jostling the states, counties and cities is the order of the day. The distance between Morrill's sentiments and the grasping and monopolistic preemption of tax sources embodied in the Treasury plan is a measderalist principle -- a principle, Moynihan reminds us, that is the unique American contribution to statecraft, and the centerpiece of the Constituion.

Oh, the Reagan administration pretends to believe in federalism. But this raid on state and local treasuries will do more to undermine it in practice than pretty speeches have done to uphold it in theory.

It may seem odd that a northern, big-city Democrat should sound this warning. But that is what comes of Moynihan's disconcerting habit of studying the nation's history and political heritage and applying it, boldly and artfully, to current issues. The only trouble with Moynihan's speech is that it doesn't go far enough. The Treasury plan would not only assault federalism in the manner he describes and deplores. It would also have a devastating effect on private colleges and universities, foundations, trusts and other instrumentalities of good works that rely on charitable donors, and have done so unmolested since 1917. How? By eliminating or limiting the deductibility of charitable gifts.

In many ways that have been given insufficient thought in the general clamor of approval, "tax simplification" is a mischievous incantation. Granted, gross inequities in the tax code should be reformed. But it is dangerously simple-minded to make complexity itself the culprit.

It is hard to govern, or fairly tax, a nation of continental scope in simple ways. "The simple governments are fundamentally defective, to say no more of them," said Edmund Burke.

It still needs saying. Luckily, our closest approximation to Burke is there to say it.