-----------------------------------------------------------------------------------------
help for taxpuf                                               
-----------------------------------------------------------------------------------------


NBER TAXSIM model for federal and state income taxes - Full

Description

taxpuf9[,full output secondary|interest|long temp]

calculates federal and state income tax liability from a transformed version of the SOI public use file. Where the Stata procedure taxsim uses fewer than a score of input variables likely to be available in a survey, taxpuf uses all the data available in the public use files, about 200 values per taxpayer.

The TAXSIM version of the public use file is documented elsewhere, but includes variables named data1 through data210 for various income, deduction, and demographic characteristics. data100 is the taxpayer id variable, data11 is wages, etc.

One of the TAXSIM PUF files must be in the workspace before calling {hi:taxpuf). The program returns your Stata workspace after creating a file taxsim_out.dta with values for the various liabilities and marginal tax rates. The two files can be merged for further analysis.

Here is an example of a complete job to calculate year 2000 tax liabilities with taxsim and compare them to taxpayer reported liabilities:

. use /home/data/soi/taxsim/dta/s2000 . taxpuf9 . merge data100 using taxsim_out . replace fiitax = max(fiitax,0) . reg fiitax data16

This loads the year 2000 2% subset, calculates taxes, merges taxsim output with the original data, truncates tax liability at zero (to match SOI conventions), and regresses the TAXSIM calculated value of federal liability on the taxpayer reported value. You should see an r-squared value of better than .99.

The law used is for the year specied in data103. It can be set to any value from 1960 to 2013, however state tax will be zero for any year outside 1977-2008. When calculating tax liabilities for alternate years, there may be missing variables, however these are silently set to zero.

The tax calculator itself is the same FORTRAN program that the NBER has been updating annually since 1974. This interface converts the data to ASCII and executes the tax calcultor against it, then reads the output of the tax calculator and converts it to a Stata dataset. The full tax calculator is available only while logged onto the NBER Unix cluster, not via the Internet.

Data Input files are available for all years from 1960 through 2004, except for 1961, 1963, and 1965. Each year is available as a 2% subset (about 2,000 taxpayers) or a full version. File x1999.dta would be the full dataset, where s1999.dta is the subset. All files are kept in /home/data/soi/taxsim/dta.

Returned values

fiitax: Federal tax liability, after regular, minimum, and maximum tax, and after refundable credits. This can be calculated through 2013.

siitax: State tax liability after refundable credits. These are calculated through 2013, but years after 2008 are just the 2008 law inflation adjusted to the later year.

fica: FICA tax liability

frate: Marginal federal tax rate wrt a weighted average of the rates on the primary and secondary earners, or equal weights if both are non-workers. You can change this to the secondary earner, property income, or long term gains with the options, "Secondary" or "Interest" or "Long".

srate: Marginal state tax rate. Same options apply here.

ficar: Marginal FICA rate. The estimate of FICA tax includes both employer and employee portions, and ignores the favorable treatment of self-employment income.

Options

full: Return many intermediate calculations (taxable income, regular tax, individual credits, etc. All the returned variables have labels defined in taxpuf.ado - use "describe" to get the full list.

output: Specify the name of the output dataset. The default is taxsim_out.dta in the current directory.

secondary: Calculate marginal tax rates with respect to the secondary wage earner. The default is a weighted average of the primary and secondary wage earners.

interest: Calculate marginal tax rates with respect to interest income.

long: Calculate marginal tax rates with respect to long term gains.

temp: Save temporary files to disk.

Notes:

{p4 4 2} Please examine or read all of the material below.

Dollar amounts are rounded to the nearest dollar before transmission to the calculator, and calculated amounts are similarly treated.

A general description of Taxsim is given in http://www.nber.org/taxsim/feenberg-coutts.pdf.

More information about the data collection at NBER is given in http://www.nber.org/taxsim-notes.html.

A variable list for the input values is given in http://www.nber.org/taxsim-ndx.txt.

A variable list for the returned values is given in http://www.nber.org/taxsim/taxsim-calc9.

An Adobe PDF copy of this document is available at http://www.nber.org/stata/taxpuf9.pdf.

Instructions for downloading taxpuf9 are available at http://www.nber.org/~taxsim/stata.html.



Daniel Feenberg (topical) Jean Roth (technical) feenberg@nber.org jroth@nber.org 617-588-0343

Online: help for taxpuf