If you were looking for tax simplification from the House Ways and Means Committee, you looked to the wrong place. As a committee staff member put it, "Simplification was the first thing to go out the window." If anything, the bill would make paying taxes even more confusing than ever, since it would change various formulas, eliminate certain exemptions and put different provisions into effect at all sorts of different times. Make your appointment with your accountant early.

The Senate is not expected to act on tax reform until sometime next year, so it's not clear what will eventually happen -- or when. But certain people and certain families would emerge as clear winners in the House bill. And others would lose.

Those who take a credit for child care expense would come out okay. The current law, which allows people to take a tax credit for up to $2,400 in expenses for one child and up to $4,800 in expenses for two or more children remains unchanged. Salary deduction plans, which allow employers to set aside a portion of an employe's income for child care, which would not be taxed at all, are preserved, with a cap of $5,000 placed on the amount of income that could be applied to child care. The cap was in response to allegations that some people were abusing plans by setting aside much larger portions of their income than they reasonably needed for child care. With the lower tax rates, however, employer-assisted child care plans may not be as attractive as they have been.

Clifford trusts and custodial accounts would be abolished, however. These are accounts that parents can set up for their children; the parents transfer money into the accounts, which are then taxed at the child's rate, instead of the parents' rate. They are a popular means of saving for children's college educations. Under the tax bill, however, children up to the age of 14 would be taxed at the same rate as their parents if their unearned income came from assets given to them by their parents. One estimate given to the House Ways and Means Committee was that abolishing the Clifford trusts and custodial accounts would mean that people would be paying $900 million more in income taxes over a five-year period. While this might generate revenue in the short run, it is bound to increase demand for college loans -- and pressures on public universities -- since parents will be less able to save money for their children's college educations.

Personal exemptions in the bill are raised to $2,000, following intense pressure from the "pro-family" lobby, according to a committee source. Around 1950, she said, the personal exemption was $500. "Depending on how you index it, it should be $3,000 to $5,000 today. People said you ought to go back to the pro-family approach. They were thinking of large families with lots of kids. But the census data shows that of married couples, only half have any children eligible for exemptions at all in any particular year." The exemption, which is $1,040 this year, did not get jumped without a catch. If you itemize deductions, you would have to take $500 off your itemized deductions per person in your family, which, in effect, would bring the personal exemptions for those who itemize back to $1,500 -- the figure committee Chairman Dan Rostenkowski (D-Ill.) had sought.

Under the bill, single heads of household come out clear winners. At present, single heads of household have the same standard deductions that single people have. Under the current rate, people who file a joint return get a $3,670 standard deduction, while singles and single heads of households get $2,480. The bill would raise the standard deductions for married couples to $4,800, for single heads of household to $4,200 and for single people to $2,950.

Other winners would be the grandchildren of people who have lots of money. This came about through the so-called Gallo amendment introduced by Rep. Ed Jenkins (D-Ga.) and pushed by a lobbyist hired by the winemaking brothers. The amendment would exempt the first $2 million given to a grandchild from being taxed twice. An aide to Jenkins said he has a longstanding dislike for "deep inheritance taxes" that make it more favorable to give to "a complete stranger than to grandchildren." The aide said the amendment actually would tighten the current estate tax regulations for money given to a grandchild. As things stand, these direct bequests to grandchildren aren't taxed at all a second time because they are exempt from the generation skipping tax. Rostenkowski had wanted to remove that exemption.

Members of the Gallo family will certainly understand the new provision, and they can hire accountants to explain the rest of the bill to them.