Taxcalc-Payroll#
Taxcalc-Payroll is a microsimulation model for static analysis of USA federal payroll taxes.
Taxcalc-Payroll is developed by Bodi Yang (github @bodiyang), from American Enterprise Institute. Contact: bodi.yang@aei.org
If you have questions about or would like to contribute to the project, please contact or submit an issue at the model’s repository.
Intro#
You can install the Taxcalc-Payroll from GitHub.
Taxcalc-Payroll interacts with other models in the AEI’s Open Source Policy Center to conduct non-static analysis.
When using microdata that represent the USA population, Taxcalc-Payroll can estimate the aggregate revenue and distributional effects of tax reforms under static analysis assumptions. Taxcalc-Payroll can also process custom-created data on one or more filing units permitting analysis of how tax reforms affect certain people.
The Python source code and embedded documentation are available at the Taxcalc-Payroll GitHub repository.
Functions of Taxcalc-Payroll#
The model’s core tax calculation functions are (1) payroll tax calculation functions, and (2) employer-side payroll tax offset function
A Parallel Project with Tax-Calculator#
Tax-Calculator and Taxcalc-Payroll are the microsimulation models for federal tax analysis. They are parallel projects with different focus on inomce tax analysis and on payroll tax analysis. However, the two models are highly integrated. Users can perform both income tax and payroll tax analysis using either model.
Please read History, to learn more details of the relationship between two models.
Usage#
Taxcalc-Payroll can simulate an enormous number of tax reforms, because it parameterizes tax policy using over 200 parameters, that users can change without doing any programming. And even a reform that is not able to be characterized using currently-available parameters can be simulated by writing supplementary Python code that characterizes the reform.
For each filing unit, Taxcalc-Payroll can estimate the marginal tax rate generated by a small change in income. It can generate marginal tax rates for 18 different kinds of income and estimate marginal tax rates under any parametric tax reform.
Taxcalc-Payroll is extensively tested using hundreds of unit and integration tests that achieve complete code coverage. Also, there is an ongoing cross-model validation effort that uses large randomly-generated samples of filing units to compare results generated by Taxcalc-Payroll with results from other tax models. The cross-model validation work with the National Bureau of Economic Research’s TAXSIM is described here.
Latest release#
0.1.0 (2023-07-28)
Please read the installation guide at Getting started.