Taxsim FAQ

  • Why are some tax liabilities negative?

    fiitax includes refundable credits, including the Earned Income Credit and the Additional Child Tax Credit. These can also make the marginal rates negative.

  • Why are some marginal rates unbelievable?

    It could be an error in the calculator, but usually it is a consequence of the claw-back or phaseout of a deduction or credit.

  • Why does a taxpayer itemize with less than the standard deduction?

    Taxsim calculates the tax both with and without itemization, and selects whatever results in the lesser federal plus state liability. Sometimes itemization doesn't affect federal tax, but does reduce state tax.

  • Why is the calculated tax incorrect?

    1. Errors less than $25 are not significant. Taxsim isn't for filing taxes with the governments and does not use the tax tables when formulas are available. Taxsim smooths over kinks and notches so that marginal tax rates are kept plausible. (There is an option to turn off some smoothing).
    2. If you suspect any case has been calculated incorrectly, please extract that case (or a exemplar, if there are many cases) and run it in individual taxpayer mode on the webpage. Examine the output to see if it suggests why the result is a surprise. Find the relevant tax forms on the Internet and fill them out with your case. If you are still of the opinion that Taxsim got it wrong, please set taxsimid to "-1" and email the output web page to me (as an ascii attachment) and a pdf copy of the tax forms as filled out. Alternatively in Stata send me both the log and the txpydata.raw and results.raw files from the current directory. I will get back to you within a day (or two at worst) with an explanation or a fix. It is important that you not send large files. Just send an email with one case, the three files mentioned above and any theory you may have as to what went wrong. Please include a phone number where I can reach you.
    3. Many users seem to feel that a single record isn't significant enough to get my attention, and want to send all 30,000 incorrect records from their million record file. Generally all 30,000 will suffer from the same problem, and once one calculation is corrected, the other 29,999 observations will be good too. I generally refuse to look at large files. I might make an exception if the problem occurs only in the context of a large file, but even in that case I ask that you not send any more cases than are necessary to demonstrate the problem.
    4. It helps if you can simplify the tax return as much as possible. If you can demonstrate the problem with only one source of income and no deductions, that makes it easier for me to see where the problem is.
    5. Again, these reports are a top priority for me, but I have no support for this project, and I need your help to fix errors. The production code can usually be fixed in a day or two.

  • Why do I get no results at all?

    1. You might not have write permission in your current directory.
    2. If you are using taxsimlocal, is the taxsim executable binary in ~/ado/plus/t?
    3. Our server might be down. Suspect this if you have gotten results before from the same client. You can test our default server with:
      ssh taxsim35@taxsim35.nber.org
      test
       from the Windows, OSX or Linux command line. If you get a "STOP 25" error, the system is up and running. There is also a backup server (taxsimssh.nber.org) but the Stata interface to Taxsim should transparently go to it if the default fails.
    4. More likely this is a firewall problem. The firewall could be on your computer or on the local area or campus network. You might get help from your IT department to transit the firewall, but the Departments of Information Preventions are notoriously unhelpful.
    5. In Stata try using the "ftp" or "http" options or install -taxsimlocal-, which does the calculation on your local computer rather than on our server. Typically at least one of these will work, however the http option is limited to small files by your browser. You can also install from the Fortran source. Write to me if that is necessary. This is quite easy if you have a compiler, as I provide it as a single file with no dependencies.

  • Why are the results missing records?

    Taxsim stops processing data at the first "impossible" input record. There should be a detailed message in the log. If there is no message there, look at the last 10 lines of the intermediate ASCII file in the current directory. From Stata the command "type results.raw should show the message. Common causes are:
    1. A single return with spousal income (which is often caused by putting single female data in the spouse fields or using a current marital status with prior year data).
    2. Negative ages, wages, pensions, dividends, interest or deductions. Only profit and self-employment entries can be negative.
    3. Year outside of 1960-2023,
    4. Census codes in the SOI state field.
    5. Implausible ages.

  • Taxsim calculated total revenue is far to low

    If you calculate a US aggregate AGI or fiitax from survey data such as the CPS or ACS do not expect it to compare well to the IRS published aggregates. Surveys have poor coverage of high incomes and property incomes, which are significant sources of revenue. If you compare agi or fiitax for incomes less than 200,000 to incomes in the CPS that are less than 200,000, the result will be closer. Note that Taxsim fiitax is after refundable credits.

  • Stata Update problems

     You should be able to update taxsim ado files with the normal community update command:
    ado update taxsim*,update
    The Stata -net uninstall- command dosn't always uninstall a program, and if it doesn't, -net install- and -ado update- may not function correctly. There is an alternative and more reliable uninstall procedure, but it is a little harder. Run
    ado dir taxsim
     to get a numbered list of existing -taxsimtest- installations. Then uninstall each of them with
    ado uninstall [#]
     where # is the relevant number from the -ado dir- command. Then do a normal install of -taxsimtest-. (The brackets are part of the command).

  • General notes

    We do answer all mail, and we do follow up on queries, but it is important to abide by the guidelines in the previous paragraphs. An email message with the statement that "TAXSIM is broken" (unless you are getting no result at all), or even "state x is broken for feature y" will be returned with a request for an example in csv format. Comments about tax features being broken or aggregates being off are not useful unless accompanied by an example of a return displaying the problem. Once we get that, we will compare our results with hand generated results done from a tax form and any problem will soon be resolved. Comments from users have led to significant improvements in the program, and are almost always resolved within 48 hours.

    Note that anything you send me should be ASCII or .dta. I don't take image files, Word documents or screen captures.

    Daniel Feenberg
    NBER
    1050 Mass Ave.
    Cambridge MA 02138
    617-682-6204
    feenberg@nber.org

    Date last modified: 17 June 2024 Taxsim home page