European Stars And Stripes (Newspaper) - August 20, 1986, Darmstadt, Hesse                                Wednesday. August 20, 1986 the stars and stripes Page 3 the italian air Force acrobatic team Force Tri colors laces inc sky with con goings and comings italian style traits Over the naval air station at of fret Field Palo allo Calif. But is that a rugged individualist in the wild Blue yonder or i the wrong Way caper just u part of the Shim the precision fliers from Italy were Gui Sis of i he Navy. Simplification does the tax Bill achieve it Washington up one of the main goals of tax Reform simplification May have been largely lost in the Bill passed by congressional negotiators and some people who itemize deductions could find the new system More confusing. At a Quick glance the plan approved last weekend by the House Senate con Ference committee seems to be major streamlining of the lax code mostly be cause it would drop the current 15 lax brackets to two and would slash numer Ous deductions. However sprinkled throughout the Bill Are provisions that complicate mat ters mostly for people who itemize their deductions. Those include the gradual increasing and decreasing of certain tax benefits and new minimum requirements for Sev eral deductions. Also there would be new rules for individual retirement accounts that would allow the full Ira deduction for some people different Par tial deductions Tor others and no deduction at All for still others. According to several lax accounting experts most of the difficulty with the Bill is expected to come in the first few years i is applied. If it s fully implemented without changes it could be simple said Henry Bloch president of or Block inc., which handles tax matters mostly for Middle income pc Cpl. But in the nest live years there Are phase ins and phase  the changing from the old system to the new system is terribly Complex he said. Other accounting experts who Deal mostly with More exotic tax matters said that for very sophisticated lax planning the problems could be even More complicated however sen. Bill Bradley d-n.j., one of the architects of the plan defended ii monday As True simplification. He said that largely because of the increased Standard deduction and per Sonal exemption perhaps 15 million people who i Leitma deductions will no Lander find it to their Benefit to a so Ana will file a Short form tax return. Also about 6 million poor people would be taken off the tax Rolls and will not be required to file any return. But for those who will continue to itemize Many May find it extremely difficult to determine exactly what tax rate they arc paying and How they should compute deductions. For example the much heralded iwo talc Structure in the Bill would not begin until 1988. Next year there will be five brackets Between 11 percent and 38,5 percent. Even when the two individual rates of 15 percent and 28 percent Lake effect things arc not As simple As they seem. Included in the Rale schedule Are hid Den rates thai would in effect Force sin Gle people with taxable incomes of More than s43.150 and couples with taxable incomes of j7i,900 to pay a 33 percent rate on a significant portion of their in come above those Levels. Those people would still technically be paying lax at a 28 percent rate but be cause they would automatically begin to lose other tax benefits they would essentially be hit with a 5 percent surtax and i hair effective lop tax rate would be 33 percent. How Long the hidden Rales continue would depend on How Many personal exemptions a person claimed. Tor a fam ily of four it would last until they reached j192,930 of taxable income while fur most single people it would last until $100,480 of taxable income. Several accounting experts said Man Day that because the Bill also would tax capital gains income at regular income Levels the hidden tax Rales in the Bill could make it very difficult for people to make investment decisions. Ira Shapiro director of tax policy for the accounting firm of Coopers & by Brand also noted that the House Senate conference committee had left open numerous us cations. For example he cited As yet unwritten provisions that would he designed to make sure people did not refinance or take a second mortgage on a Home to make Large consumer purchases. That will be very complicated and they Haven t even put any rules on that yet Shapiro said. Another confusing area cited monday was that involving new rules for consumer interest deductions that would end in 1991 but would be allowed at differing Levels for the coming three years