Honor thy father and mother, but does that mean paying tribute, literally, to everybody's mom and pop, whether they need it or not?

The biblical injunction, as now applied to public finance, has taken on explosive ramifications.What was once a national disgrace of disregard for the elderly has been transformed into quite the reverse: fiscal pampering at the expense of other age groups.

A nascent intergenerational fiscal feud is starting to attract attention at the federal level. It should also receive careful consideration at the state and local levels, where a number of goodies have been stacked up for the elders over the years.

Amid an overall growth of inequality of income that was the hallmark of the last decade, young households took it on the chin, while the elderly did well.

In 1968, 25 percent of those above the age of 65 had incomes below the poverty line, as compared with 15.6 percent of those 18 or younger. By 1989, only 11.4 percent of the elderly were below the poverty level, a heroic accomplishment. But the percentage of children living in poverty had grown to 19.6.

The federal government has played a major role in creating this trend. Nearly half of all non-military spending by the feds is devoted to those over 65 years of age, although they make up only a little more than 12 percent of the population.

Political power has a lot to do with it. Nearly 69 percent of Americans over the age of 65 voted in 1988, compared with 36 percent of those between the ages of 18 and 24. The powerful American Association of Retired Persons boasts 31 million members, an annual budget of $236 million and the nation's largest circulation magazine, Modern Maturity.

At the state and local levels, the elderly have been favored as well. The property tax, the main source of local revenues, is a case in point. Thirty-one states have adopted some type of cap on property taxes for those of modest means; in 27 of these states, the program is limited either to the elderly or to the elderly and disabled. The average benefit ranges from about $100 annually per household to Wyoming's more than $500.

In addition, 32 states have adopted either statewide or local-option homestead exemptions, whereby some base value of owner-occupied property is exempted from local property taxation. In 24 states, the exemption is restricted to the elderly or the elderly and the disabled.

State income taxes also lend special succor to oldsters, whether they need it or not. Preferences built into the laws of the 40 states that employ the income tax are numerous and diverse. Thirty states exclude all Social Security payments from their income tax; 10 exclude part. Twenty states exclude government pensions from their income tax or provide a special credit; 16 extend these benefits to other retirement income.

A Minnesota study recently found that, even without counting the preferential treatment of Social Security, every one of the 40 income tax states gives more favorable treatment to senior citizens than to those who are younger.

As the population ages and the ratio of earners to retirees sinks, all governments need to rethink the concept of favoring some citizens over others simply on the basis of age.

The proliferation of age-based preferences undermines both horizontal and vertical equity in the tax system. If these intergenerational inequities continue to grow (perhaps if they merely remain the same) the anger of younger voters - including those of middle age, now bearing heavy education expenses for their children - could reach the boiling point.

(John E. Petersen is senior director of the Government Finance Research Center of the Government Finance Officers Association. The views expressed are his own.)