THE SENATE FINANCE Committee has done a pretty amazing thing. Departing from a familiar past, surprising even its own members, it has reported out by a vote of 20 to 0 a bill that would genuinely reform the U.S. tax system. This is the same committee that over the years has been the source of most of the provisions the reformers wanted to strike. Maybe Halley's Comet did it.

Under the very good bill the committee sent to the floor, the poor would not pay, and the rich mostly would. By raising the personal exemption and standard deduction, the bill would lift the tax threshold above the poverty line and take millions of lower-income families off the rolls. At the same time it would do away with the preferential treatment of capital gains, which accrue mostly to the rich, and with one important exception also take the zing out of tax shelters by denying people the right to offset actual income with concocted losses.

These steps plus the lower rates they would help finance would extract the tax code from the economy, in the sense that tax considerations would no longer play so important a part in investment decisions. The rates would be 15 percent for most people and 27 percent at the top, as against a 50 percent top rate now. The low rates were what finally won the committee over. They were only possible because the committee also agreed to broaden the income base to which the rates would apply. That, of course, is what reform has always been about. It took the committee a while to discover its virtues.

The legislation is an enormous personal as well as professional victory for Finance Committee Chairman Bob Packwood. He redeemed both the bill and his own reputation by boldness. In the early voting he had been trampled by committee members seeking to increase the tax advantages of particular industries. He pulled back, proposed much more of a hands-off approach to business taxes (he would still raise them, but the bill would rely heavily on a minimum corporate income tax, simply limiting the use any corporation could make of all available preferences in any one year), and went after the advantages of wealthy individual taxpayers instead. It was a saving decision, both good politics and good policy.

The one interest group to which the committee did egregiously give ground was the oil industry. Over the objections of steadfast reformer Bill Bradley, it agreed to preserve oil and gas tax shelters even while wiping out all others. Members from oil and gas states said they had the votes to kill the bill otherwise -- and they probably did. The trick will now be to keep further favors from being done for other such interest groups on the floor. The Senate is not exactly famous for saying no on such occasions. But then, neither was the Finance Committee.