(FORTUNE Magazine) – According to Bernard Wolfman, Fessenden Professor of Law at the Harvard Law School, ''Writers have not generally used quotation marks around the term 'tax expenditure' since 1974.'' That just shows what Bernard knows. His allegation, appearing in the December 1985 Harvard Law Review, completely ignores the policy analyst fingering this very keyboard, who always demands inverted commas and furthermore twitches reflexively anytime he suspects some character of mentioning ''tax expenditures'' as though the phrase belonged in the mother tongue or something. As Wolfman's article learnedly reminds you, the phrase ''tax expenditure'' was invented by the late Stanley S. Surrey, a Treasury official and leading kibitzer on taxes in Democratic Administrations. Surrey used the phrase to refer to situations in which the federal government doled out subsidies or other benefits in the form of tax breaks. A subsidy, he kept explaining, would be no less real if awarded through some special exception in the tax code than if paid out via a check from the Treasury. Okay, Stan, fair enough. But why call the tax break a ''tax expenditure,'' as if it were reducing the money already taken in by the Treasury? We got off a couple of outstanding twitches just this past fortnight. One was occasioned by a passage in David Stockman's The Triumph of Politics, where Dave was carrying on about how unreasonable Ron can be. It seems that Reagan thinks the whole idea of ''tax expenditures'' is a liberal myth. Direct quote from Reagan: ''The idea implies that the government owns all your income and has the right to decide what you can keep. Well, we're not going to have any of that kind of thinking around here.'' Stockman implies that this is pretty dumb stuff but forgets to explain why. To give Dave his due, he at least wrapped ''tax expenditures'' in quotation marks.

That is more than we can say for the Senate Finance Committee, whose literature has been getting above-average readership lately, so you might think the Republicans in charge would hire a competent copyreader or at least a right-wing economist to look over the stuff they're putting out, but no. Predictable result: Right there in the guts of this press release, where they're explaining how they cut the top marginal rate to 27% but still collect as much as ever, they identify the present capital gains exclusion -- the 60% you do not have to count in adjusted gross income -- as a ''tax expenditure.'' Incredible implication: It would have been right to tax every dollar of capital gains in recent years, when marginal rates have ranged up to 50%. As previously implied, the quotation marks are ours.