TAX AMNESTY is a fundamentally bad idea, and the Senate Budget Committee would make a serious mistake in endorsing it. The appeal is obvious. It promises a surge of revenue painlessly, without a tax increase. A number of the states have offered tax amnesties in recent years, and governors enthusiastically trumpet the revenues that they claim to have collected that way. But the senators need to give that proposition a careful second look.

The first issue is equity. A tax amnesty generally means a period in which people with guilty consciences can come forward and pay what they owe without penalties or the fear of criminal prosecution. Why should Congress enact a tax break for the cheaters, benefitting them rather than the good citizens who have paid their full tax liabilities all along?

The second issue is effectiveness. The states' experiences here are poor guides for federal policy. Amnesties have been most productive in those states with slack collection programs. Massachusetts, for example, coupled the announcement of an amnesty with a warning of much tougher enforcement and higher penalties ahead. In comparison with the states, federal enforcement has always been pretty muscular and, in any case, Congress does not have any new and sudden tightening of the system in mind. In these circumstances a federal amnesty would only set a bad precedent. Seeing one amnesty, people would naturally expect others to follow -- and some would begin cutting corners in anticipation of it.

Senators would also be wiser not to assume that an amnesty draws huge waves of revenue from penitent non-taxpayers with great secret wealth previously unsuspected by the authorities. In Illinois, to take another example, an amnesty collected a substantial amount of money -- but most of it apparently came from taxpayers who were already being audited, or were engaged in legal quarrels with the state over the amounts that they owed. Amnesty simply offered them a cheap way to end the quarrels.

The Internal Revenue Service itself has contributed to the idea of vast hidden wealth by its assertion, in a study several years ago, that some $90 billion a year in income taxes goes uncollected. But that estimate is highly controversial and, other specialists argue, is far too high. Is there any point in enacting a bad law in hopes of capturing money that doesn't exist?

If Congress wants to go after uncollected taxes -- as it certainly should -- there's a better way. It can give the IRS more money to do its job. The IRS has been systematically underfinanced for years. But each dollar invested in the IRS results in upwards of $10 in additional revenue. That kind of arithmetic ought to appeal to a Congress seriously interested in deficit reduction.