policyengine-taxsim 2.20.0

A TAXSIM emulator using PolicyEngine US

PolicyEngine-TAXSIM

A comprehensive TAXSIM emulator using the PolicyEngine US federal and state tax calculator, with advanced comparison tools and an interactive dashboard for analyzing tax calculation accuracy across different scenarios.

Table of Contents

• Overview
• Quick Start
• Installation
  • From Source
  • From GitHub
• Usage
  • PolicyEngine Calculations
  • TAXSIM Calculations
  • Comparison Analysis
  • Data Sampling
• Dashboard
  • Setup
  • Features
• Input Variables
  • Demographics
  • Income
  • Expenses
  • Output Types
• State-Specific Features
• Output Variables

Overview

This project provides a high-fidelity emulator for TAXSIM-35, leveraging PolicyEngine's comprehensive US federal and state tax calculator. It enables researchers, analysts, and policymakers to run large-scale tax microsimulations with full compatibility to TAXSIM-35 input/output formats.

Key Features

• Year-stitching: Automatic routing by tax year — 2021+ uses PolicyEngine, earlier years use TAXSIM35 — so a single command covers the 1960s through future scheduled changes
• High-performance microsimulation: Process thousands of households simultaneously using PolicyEngine's vectorized calculations
• TAXSIM-35 compatibility: Full compatibility with TAXSIM input CSV format and output variables
• Advanced state handling: Correctly handles state-specific tax conformity rules (e.g., states that adopt federal AGI vs federal taxable income)
• Comprehensive comparison tools: Side-by-side comparison of PolicyEngine vs TAXSIM results with detailed mismatch analysis
• Interactive dashboard: React-based dashboard for exploring results across years, states, and household characteristics
• Flexible output options: Standard, full, and text description output formats matching TAXSIM specifications
• YAML test generation: Generate PolicyEngine test cases for reproducibility and validation

Quick Start

# Install (requires uv: https://docs.astral.sh/uv/getting-started/installation/)
uv pip install git+https://github.com/PolicyEngine/policyengine-taxsim.git

# Run a comparison analysis on sample data
policyengine-taxsim compare your_data.csv --sample 1000 --year 2021

Installation

From Source

1. Clone the repository:

   git clone https://github.com/PolicyEngine/policyengine-taxsim.git
   cd policyengine-taxsim
   

2. Create a virtual environment and install:

   uv venv && source .venv/bin/activate   # Windows: .venv\Scripts\activate
   uv pip install -e .
   

3. To update the project codebase (for existing project):

   git pull origin main
   

4. To update dependencies used by the project (for existing project):

   uv pip install -e . --upgrade
   

From GitHub

uv pip install git+https://github.com/PolicyEngine/policyengine-taxsim.git

Usage

The CLI provides several commands for different use cases. All commands are accessed through the main CLI interface:

policyengine-taxsim [COMMAND] [OPTIONS]

PolicyEngine Calculations

Calculate taxes using PolicyEngine:

policyengine-taxsim policyengine your_input_file.csv

Options:

Option	Description
--output, -o	Specify the output file path (default: output.txt)
--logs	Generate PolicyEngine YAML Tests Logs
--disable-salt	Set State and Local Sales or Income Taxes used for the SALT deduction to 0
--sample N	Sample N records from input for testing

Example:

policyengine-taxsim policyengine input.csv --output results.csv --logs --sample 1000

TAXSIM Calculations

Run native TAXSIM-35 calculations:

policyengine-taxsim taxsim your_input_file.csv

Options:

Option	Description
--output, -o	Output file path (default: taxsim_output.csv)
--sample N	Sample N records from input
--taxsim-path	Custom path to TAXSIM executable

Example:

policyengine-taxsim taxsim input.csv --output taxsim_results.csv

Comparison Analysis

Run comprehensive side-by-side comparisons between PolicyEngine and TAXSIM:

policyengine-taxsim compare your_input_file.csv

Options:

Option	Description
--output-dir	Directory for comparison results (default: comparison_output)
--year	Override tax year for calculations
--sample N	Sample N records for comparison
--disable-salt	Disable SALT deduction in PolicyEngine
--logs	Generate PolicyEngine YAML test logs

The comparison uses a $15 tolerance for both federal and state tax comparisons, which accounts for reasonable rounding differences.

Examples:

Basic comparison:

policyengine-taxsim compare cps_households.csv --sample 1000

Year-specific analysis with detailed logging:

policyengine-taxsim compare input.csv --year 2023 --logs --sample 5000

Output Files:

• comparison_results_YYYY.csv - Consolidated results with both PolicyEngine and TAXSIM outputs for each household
• Console output with match statistics and summary

The consolidated output includes (by default):

• All input variables for each household
• Complete TAXSIM output variables
• Complete PolicyEngine output variables
• Match/mismatch indicators for federal and state taxes
• State codes for easy filtering
• All mismatches are automatically included - no separate mismatch files needed

Data Sampling

Extract a sample from large datasets:

policyengine-taxsim sample-data input.csv --sample 1000

Options:

Option	Description
--sample N	Number of records to sample
--output, -o	Output file (auto-generated if not specified)

Dashboard

The project includes a comprehensive React-based interactive dashboard for visualizing and exploring tax calculation comparisons across multiple years and states.

Dashboard Setup

1. Navigate to the dashboard directory:

   cd dashboard
   

2. Install dependencies:

   npm install
   

3. Start the development server:

   npm start
   

4. Open your browser to http://localhost:3000

Dashboard Features

• Multi-Year Analysis: Compare results across tax years 2021-2024 with year-over-year trends
• State-by-State Breakdown: Detailed analysis by all 50 US states plus DC
• Interactive Filtering: Advanced filtering by state, match status, and household characteristics
• Variable-Level Comparisons: Drill down to see differences in specific tax variables (v10, v32, etc.)
• Match Rate Analytics: Visualize federal vs state tax calculation accuracy rates
• Household Explorer: Expand individual households to examine all input and output variables
• Mismatch Analysis: Identify patterns in calculation differences
• Export Capabilities: Download filtered comparison data in CSV format
• Smart Tolerance: Uses $15 tolerance accounting for reasonable calculation differences
• Real-Time Statistics: Dynamic summary statistics that update with filtering
• GitHub Integration: Direct links to relevant issues and documentation

Data Management

The dashboard loads comparison data from public/data/YYYY/comparison_results_YYYY.csv files. To update:

1. Generate new comparison data:

   policyengine-taxsim compare your_data.csv --year 2024
   

2. Copy results to dashboard:

   cp comparison_output/comparison_results_2024.csv dashboard/public/data/2024/
   

3. Restart dashboard to load new data

Production Build:

npm run build

The dashboard provides an intuitive interface for researchers and analysts to explore large-scale tax calculation comparisons without requiring technical expertise.

Input Variables

The emulator accepts CSV files with the following variables:

Demographics

Variable	Description	Notes
taxsimid	Unique identifier
year	Tax year
state	State code
mstat	Marital status	Only supports: 1 (single), 2 (joint)
page	Primary taxpayer age
sage	Age of secondary taxpayer
depx	Number of dependents
age1	First dependent's age
age2	Second dependent's age
ageN	Nth dependent's age	Taxsim only allows up to 8 dependents

Income

Variable	Description
pwages	Primary taxpayer wages
swages	Wage and salary income of secondary taxpayer
intrec	Taxable interest income
dividends	Qualified dividend income
ltcg	Long-term capital gains
stcg	Short-term capital gains
psemp	Primary taxpayer self-employment income
ssemp	Spouse self-employment income
gssi	Social security retirement benefits
pensions	Taxable private pension income
scorp	Partnership/S-corp income
pbusinc	Primary taxpayer business income that qualifies for the QBID

Expenses

Variable	Description
rentpaid	Amount of rent paid
mortgage	Deductible mortgage interest
proptax	Real Estate Taxes
childcare	Childcare expenses

Output Types

Depending on the idtl input value it can generate output types as following:

idtl	Description
0	Standard output
2	Full output
5	Full text description output

Output Variables

The emulator produces all standard TAXSIM output variables:

Basic Output (idtl = 0, 2, 5)

Variable	Description
taxsimid	Record identifier
year	Tax year
state	State code
fiitax	Federal income tax liability
siitax	State income tax liability
fica	FICA taxes

Extended Output (idtl = 2, 5)

Variable	Description
v10	Federal adjusted gross income
v11	Unemployment compensation in AGI
v12	Social Security benefits in AGI
v13	Zero bracket amount/standard deduction
v14	Personal exemptions
v17	Itemized deductions
v18	Federal taxable income
v19	Federal income tax before credits
v22	Child tax credit
v23	Additional child tax credit (refundable portion)
v24	Child and dependent care credit
v25	Earned income tax credit
v26	Alternative minimum tax income
v27	Alternative minimum tax
v28	Income tax before credits
v29	FICA taxes
v32	State AGI resolved in policyengine-taxsim with explicit per-state mappings
v34	State standard deduction
v35	State itemized deductions
v36	State taxable income (resolved in policyengine-taxsim with explicit per-state mappings)
v37	Property tax credit (resolved in policyengine-taxsim with explicit per-state mappings)
v38	State child care credit (resolved in policyengine-taxsim with explicit per-state mappings)
v39	State earned income credit (resolved in policyengine-taxsim with explicit per-state mappings)
v40	Total state credits
qbid	Qualified business income deduction
niit	Net investment income tax
cares	COVID-related recovery rebate credit