Taxation and Simonization.

SOMETHING happened to Representative Lynn Martin's campaign to unseat Senator Paul Simon, the horn-rimmed, twangy-voiced, book-writing (12), big spending liberal who just a couple of months ago was running backward, pursued by a doggedly anti-tax Miss Martin, who had made George Bush's read-my-lips pledge the centerpiece of her campaign, and was hounding Simon at every turn to stand still and debate.

"Our differences are clear," she said in July, setting her campaign theme in stone. "He wants to raise taxes. I do not." But then the President appeared to say maybe," as did the Illinois Republican candidate for governor, and suddenly Lynn Martin found herself Simonized.

Miss Martin, a five-term representative, is attractive, intelligent, witty, and, as George Bush discovered when she stood in for Geraldine Ferraro in the rehearsals for the 1984 vice presidential debates, the sort of woman for whom the word feisty was invented. Also in 1984, she was elected vice-chairman of the House Republican Conference, the first woman to make it into the GOP House leadership.

However, all that doesn't necessarily feed the bulldog. By putting all her chips on the Bush tax pledge, Lynn Martin wound up without an issue; some recent polls show her more than 25 points down. You can't fault her, of course, for taking the President at his word. Furthermore, as a moderate Republican she doesn't bring out the passionate ideological conservatives; and because of her long-standing prochoice views, she cannot call on the highly organized and politically potent pro-life constituency.

In any case, the effect of the President's turnaround was devastating. When the pledge is no longer across-the-board, candidates can be selective. Raise some, leave others alone. It becomes a matter of which taxes are preferable, and this is an area that Simon had already staked out with proposals for increased sin taxes.

The Bush tax bombshell was bad enough. But then came Souter and Saddam, and the process of Simonization seemed complete.

Part of it was Simon's incredible good fortune in House committee assignments. A basic thrust of the Martin campaign was to portray Simon as a fuzzy-headed internationalist, out of touch with Illinois and his heartland constituents. Miss Martin had started to portray him as "part-time Paul from a full-time state," more concerned with his role on the Foreign Relations Committee than with serving the folks back home. This, in fact, was a precise mirror image of the campaign that Simon had waged against Chuck Percy in 1984. But then came the Iraqi invasion, and suddenly it seemed absolutely right for Illinois to have a senator on the Foreign Relations Committee, one who, despite his ultra-dovish past, was the first off the mark in Washington with a call to blow up the Iraqi pipelines.

Considering that earlier Simon had called for a 100-billion cut in defense spending, a frustrated Representative Martin could be forgiven another limp attempt at a political zinger, this one labeling Simon "an election-year ma - NOR, TO ADD insult to injury, was Saddamization enough. There's also the ongoing process, during lulls on the geopolitical front, of Souterization. As Lynn Martin's phenomenal bad luck would have it, Simon is also a member of the Judiciary Committee. (Her committee is-ugh-Rules.) Thus, while she is reduced to attempting to break into a Simon streetcorner rally in Chicago or debating with a tape recorder in Ottawa, Illinois, as she did recently, Simon can be heard on nearly every news, talk, and interview show in Illinois and beyond, if not discussing war and peace and the fate of the West, then issuing thoughtful and judicious comments on the legacy of Justice Brennan and the qualifications of David Souter.

Marvelous air time. And all free. And-oh, yes. Back to taxes. Simon is also a member of the Budget Committee. And although his proclivities for spending and taxing are a matter of record, he has also been busy pushing the Balanced Budget Amendment, of which he is a sponsor.

That's not to say that Simon's track to November is clear. In fact, Miss Martin may finally have an issue, albeit a fortuitous and essentially negative one. Recently the Chicago SunTimes revealed that Simon had made a call to the president of the First Nationwide Financial Corporation on behalf of a longtime Simon financial supporter whose company had defaulted on a $5-million loan from a troubled Illinois S&L.

Miss Martin, who has had little cause for glee, gleefully called for a Senate Ethics Committee investigation, and Simon's response has thus far been as suspect as a barmaid's blush. "In public-relations terms, I would not do it again," Simon told reporters. "In terms of substance, I would do it again."

During the two debates scheduled in October, this may prove especially damaging to Simon, a man who has carefully cultivated an image of rectitude. In this regard, his earlier, highly moralistic sermonettes on the S&L mess don't help.

At any rate, as the last two months of the campaign get under way, the feeling is that Lynn Martin is a candidate very much alone, ready to embark on the hardball campaign that Roger Ailes is putting together for her, but cast adrift by the President who, along with James Thompson, persuaded her to run, and who sold her on the issue of no new taxes.

N THE gubernatorial race, there's

a twist on this theme. The issue is I taxes, but the Republican candidate, Secretary of State Jim Edgar, is perceived as being on the wrong side of the issue-the tax-and-spend side. His opponent, Democratic Attorney General Neil Hartigan, is flying around the state, outlining a plan for cutting the state budget by $573 million, campaigning against higher taxes, and hanging the big-spending liberal tag on Edgar. Steve Baer demonstrated in the Republican primary just how potent the tax issue had become in Illinois, when he took one-third of the vote away from Edgar with taxes plus abortion) as the centerpiece of his campaign. Hartigan has now ridden the issue from a position far back in the polls in midsummer to a dead heat with Edgar by Labor Day. The tax issue involves a two-year 20 per cent surcharge on the state income tax, due to expire on June 30, 1991. Edgar favors renewing this surcharge, claiming that without it property taxes, the single greatest cause of taxpayer grief in the state, would go up. Hartigan, although at times rather vaguely calling for eliminating only half the surcharge, nevertheless slams Edgar in his attack videos for advocating the surcharge extension.

Edgar, meanwhile, like Lynn Martin, is going with the S&L issue. His first post-Labor Day 60-second television ad was an uncharacteristically personal attack, in which Edgar-obviously stung by his drop in the polls-charges Hartigan with wrongdoing in his involvement with a defunct Chicago S&L. Unfortunately for Edgar, Hartigan resigned from the board in 1968 and was officially exonerated. Nor does the Edgar ad single out any instance of malfeasance. Gossip has it that the fine hand of Roger Ailes is at work here.

In the end, it is widely believed that the suburban vote will determine the outcome of the election, and at this writing neither candidate can convincingly lay claim to that vote. It was in the suburbs that the tax revolt was born and in turn gave birth to Steve Baer's phenomenal primary showing. Baer fans were outraged by taxes, and also morally offended by Edgar's prochoice position on abortion. Hartigan shares that position, but some of his advisors are urging him to modify it (as a Roman Catholic from a conservative parish, he could more than justify his change of heart morally). Meanwhile, with the guns of August having blown away many of this year's expected issues, everything is up for grabs.