diff --git a/README.md b/README.md index ec601247..b3b7323c 100644 --- a/README.md +++ b/README.md @@ -16,10 +16,12 @@ To generate the microdata files: The two tokens can be obtained from [Don Boyd](mailto:donboyd5@gmail.com). +## Examination results + To assess, review the data examination results that compare federal -agency tax estimates with those generated using the microdata file -created in each project phase: +agency tax estimates with those generated using the national microdata +files created in each project phase: [phase 1 results](./tmd/examination/results1.md) and [phase 2 results](./tmd/examination/results2.md) and [phase 3 results](./tmd/examination/results3.md) and -[phase 4+ national results](./tmd/examination/results4.md). +[phase 4+ results](./tmd/examination/results4.md). diff --git a/docs/book/examination.md b/docs/book/examination.md index 354f20c6..cec603b4 100644 --- a/docs/book/examination.md +++ b/docs/book/examination.md @@ -1,173 +1,5 @@ -Phase 3 Data Examination Results -================================ +National Data Examination Results +================================= -**FINAL RESULTS AS OF 2024-07-21 (after merge of PR 155)** - -This project is developing a new dataset for use by income and payroll -tax microsimulation models. The project is progressing in several -phases. At the end of each phase the current dataset is used as input -to a tax microsimulation model to generate several basic tax -estimates for calendar years 2023 and 2026. These estimates are -then compared with corresponding estimates generated by federal -agencies using their more comprehensive data. Examining the -differences between the estimates generated from this project's data -and the estimates published by the federal agencies should provide -ideas about how to improve the development of this project's dataset -in subsequent phases. - -For more on the source of the federal agency estimates and on how the -model-plus-dataset estimates are generated, see the [examination -methods](./methods.md) document. The model used to generate the -following Phase 3 estimates is [Tax-Calculator -4.2.0]((https://github.com/PSLmodels/Tax-Calculator)) (after merge of -PR 2774 on 2024-07-21). - -Note that Tax-Calculator assumes 100% participation in credits (like -CTC and EITC), while the federal agencies assume less than 100% -participation. The implications of the differences in credit -participation assumptions are discussed below the following tables. - -
- -**CY2023 and CY2026 Payroll Tax Liability** ($ billion)
-(federal employee plus employer share) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 1580.0 | 1829.9 | CBO | -| 1523.8 | 1767.4 | Tax-Calculator + phase 3 dataset | -| 1489.3 | 1711.0 | Tax-Calculator + taxdata dataset | - -
- -**CY2023 and CY2026 Individual Income Tax Liability** ($ billion)
-(federal individual income tax) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 2512.3 | 2849.4 | CBO (probably assumes less than 100% credit participation) | -| 2212.0 | 2786.1 | Tax-Calculator + phase 3 dataset (100% participation) | -| 2247.9 | 2742.2 | Tax-Calculator + taxdata dataset (100% participation) | - -
- -**CY2023 and CY2026 CTC Tax Expenditure** ($ billion)
-(from the federal child tax credit) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 122.1 | 57.6 | JCT (assumes less than 100% participation) | -| 108.6 | 55.7 | TSY (probably assumes less than 100% participation) | -| 129.2 | 46.8 | Tax-Calculator + phase 3 dataset (100% participation) | -| 126.3 | 43.1 | Tax-Calculator + taxdata dataset (100% participation) | - -
- -**CY2023 and CY2026 EITC Tax Expenditure** ($ billion)
-(from the federal earned income credit) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 71.9 | 78.0 | JCT (assumes less than 100% participation) | -| 63.6 | 71.2 | TSY (probably assumes less than 100% participation) | -| 75.8 | 84.8 | Tax-Calculator + phase 3 dataset (100% participation) | -| 73.5 | 82.0 | Tax-Calculator + taxdata dataset (100% participation) | - -
- -**CY2023 and CY2026 SSBEN Tax Expenditure** ($ billion)
-(from excluding some social security benefits from federal AGI) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 45.9 | 56.4 | JCT | -| 31.4 | 38.4 | TSY | -| 53.3 | 72.2 | Tax-Calculator + phase 3 dataset | -| 62.7 | 89.5 | Tax-Calculator + taxdata dataset | - -
- -**CY2023 and CY2026 NIIT Tax Expenditure** ($ billion)
-(from the 3.8% federal surtax on investment income) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| -56.5 | -53.8 | JCT | -| ---- | ---- | TSY | -| -57.0 | -55.1 | Tax-Calculator + phase 3 dataset | -| -55.8 | -52.1 | Tax-Calculator + taxdata dataset | - -
- -**CY2023 and CY2026 CGQD Tax Expenditure** ($ billion)
-(from taxing long-term capital gains and qualified dividends at lower federal rates) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 259.3 | 239.8 | JCT | -| 153.9 | 182.4 | TSY | -| 234.3 | 232.5 | Tax-Calculator + phase 3 dataset | -| 217.7 | 223.6 | Tax-Calculator + taxdata dataset | - -
- -**CY2023 and CY2026 QBID Tax Expenditure** ($ billion)
-(from the 20% federal qualified business income deduction) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 56.2 | 0.0 | JCT | -| 50.4 | 0.0 | TSY | -| 55.3 | 0.0 | Tax-Calculator + phase 3 dataset | -| 19.3 | 0.0 | Tax-Calculator + taxdata dataset | - -
- -**CY2023 and CY2026 SALT Tax Expenditure** ($ billion)
-(from itemized deduction of state and local income/sales/property taxes) -| CY23 Amount | CY26 Amount | Estimate Source | -| ---: | ---: | :--- | -| 21.2 | 151.3 | JCT | -| 26.5 | 149.0 | TSY | -| 20.8 | 162.3 | Tax-Calculator + phase 3 dataset | -| 29.4 | 185.5 | Tax-Calculator + taxdata dataset | - -
- -**Implication of Differing Credit Participation Assumptions** - -Tax-Calculator assumes that everyone eligible for a credit claims it, -while the JCT (and presumably TSY) assumes that some who are eligible -for a credit do not claim it. Here is what JCT says about its credit -tax expenditure estimates: "Internal Revenue Service (IRS) statistics -from recent tax returns are used to develop projections of the tax -credits, deductions, and exclusions that will be claimed (or that will -be denied in the case of negative tax expenditures) under the -present-law baseline. These IRS statistics show the actual usage of -the various tax expenditure provisions. In the case of some tax -expenditures, such as the earned income credit, there is evidence that -some taxpayers are not claiming all the benefits to which they are -entitled, while others are filing claims that exceed their -entitlements. The tax expenditure calculations in this report are -based on projections of actual claims under the various tax -provisions, not the potential tax benefits to which taxpayers are -entitled." (Quote is from page 18 of the JCX-59-23 publication.) - -The only IRS credit participation rates we have found are for the -EITC, and they almost 80% and they are tax-unit participation rates -rather than credit amount (or dollar) participation rates. (See this -[IRS -document](https://www.eitc.irs.gov/eitc-central/participation-rate-by-state/eitc-participation-rate-by-states).) - -Given the differing credit participation assumptions, it should be -expected that the Tax-Calculator CTC and EITC tax expenditures are -above the JCT estimates. The following calculations, which -arbitrarily assume a 95% dollar participation rate, illustrate how -the differing 2023 estimates are not as far apart as they seem. - -
- -**CY2023 CTC and EITC Tax Expenditures** ($ billion)
-| CY23 Amount | Estimate Source | -| ---: | :--- | -| 122.1 | CTC JCT (assumes less than 100% participation) | -| 129.2 | CTC Tax-Calculator + phase 3 dataset (100% participation) | -| 122.7 | CTC Tax-Calculator + phase 3 dataset (95% participation) | -| | | -| 71.9 | EITC JCT (assumes less than 100% participation) | -| 75.8 | EITC Tax-Calculator + phase 3 dataset (100% participation) | -| 72.0 | EITC Tax-Calculator + phase 3 dataset (95% participation) | - -
+See examination results links in the [top-level README +file](https://github.com/PSLmodels/tax-microdata-benchmarking?tab=readme-ov-file#examination-results). \ No newline at end of file diff --git a/docs/book/intro.md b/docs/book/intro.md index 5372b404..86393643 100644 --- a/docs/book/intro.md +++ b/docs/book/intro.md @@ -15,12 +15,3 @@ To generate the microdata files: 3. Run `make data` The two tokens can be obtained from [Don Boyd](mailto:donboyd5@gmail.com). - -To assess, review the data examination results that compare federal -agency tax estimates with those generated using the microdata file -created in each project phase: [phase 1 -results](./tmd/examination/results1.md) and -[phase 2 -results](./tmd/examination/results2.md) and -[phase 3 -results](./tmd/examination/results3.md).