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{* 25 October 2004 }{...}
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help for {it:{hi:taxpuf      }}                                         
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{title:NBER TAXSIM model for federal and state income taxes - Full}

{title:Description}

{p 8 18 2}
{cmdab:taxpuf}[,{cmdab:f:ull} {cmdab:o:utput}
{cmdab:s:econdary}|{cmdab:i:nterest}|{cmdab:l:ong} 
{cmdab:t:emp}]

{p 4 4 2}calculates federal and state income tax liability from a
transformed version of the SOI public use file. Where the Stata procedure
{cmd:taxsim} uses fewer than a score of input variables likely to be
available in a survey, {cmd:taxpuf} uses all the data available in the
public use files, about 200 values per taxpayer.

{p 4 4 2}The TAXSIM version of the public use file is documented
elsewhere, but includes variables named {hi:data1} through {hi:data210}
for various income, deduction, and demographic characteristics. data100 is
the taxpayer id variable, data11 is wages, etc. 

{p 4 4 2}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.

{p 4 4 2}Here is an example of a complete job to calculate year 2000 tax
liabilities with taxsim and compare them to taxpayer reported liabilities:

{p 4 8 2}{cmd:. use /home/data/soi/taxsim/dta/s2000}{p_end}
{p 4 8 2}{cmd:. taxpuf}{p_end}
{p 4 8 2}{cmd:. merge data100 using taxsim_out}{p_end}
{p 4 8 2}{cmd:. replace fiitax = max(fiitax,0)}{p_end}
{p 4 8 2}{cmd:. reg fiitax data16}{p_end}

{p 4 4 2}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.

{p 4 4 2}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.

{title:Data} {p 4 4 2} 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. 

{title:Returned values}

{p 4 4 2} {hi:fiitax:} Federal tax liability, after regular, minimum, and
maximum tax, and after refundable credits.

{p 4 4 2} {hi:siitax:} State tax liability after refundable credits.

{p 4 4 2} {hi:fica:} FICA tax liability

{p 4 4 2} {hi: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". 

{p 4 4 2} {hi:srate:} Marginal state tax rate. Same options apply here.

{p 4 4 2} {hi:ficar:} Marginal FICA rate. The estimate of FICA tax
includes both employer and employee portions, and ignores the favorable
treatment of self-employment income.

{title:Options}

{p 4 4 2}{cmd: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.

{p 4 4 2}{cmd:output}:  Specify the name of the output dataset.  The default 
is taxsim_out.dta in the current directory.

{p 4 4 2}{cmd: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.

{p 4 4 2}{cmd:interest}:  Calculate marginal tax rates with respect to
interest income.

{p 4 4 2}{cmd:long}:  Calculate marginal tax rates with respect to
long term gains.

{p 4 4 2}{cmd:temp}:  Save temporary files to disk. 

{title:Notes:}

{p 4 4 2}Dollar amounts are rounded to the nearest dollar before
transmission to the calculator, and calculated amounts are similarly
treated.

{p 4 4 2}A general description of Taxsim is given in 
{browse "http://www.nber.org/taxsim/feenberg-coutts.pdf":http://www.nber.org/taxsim/feenberg-coutts.pdf}.

{col 5}Daniel Feenberg (topical)      {col 36}Jean Roth (technical)
{col 5}feenberg@nber.org     {col 36}jroth@nber.org
{col 5}617-588-0343

{p 4 13 2}
Online:  help for {help taxpuf}
{p_end}

