Closed jdebacker closed 4 years ago
PR #499 addresses this by splitting out the revenue from the PIT and payroll taxes according to the split found in the microsimulation model. This has some approximation error, but adds no computational complexity.
Currently, OG-USA uses tax functions to approximate marginal and effective tax rates from the IIT and payroll taxes combined. In many cases, due to government accounting it's helpful to know the revenue from each of these sources separately. This issue is to discuss the best approach to do this.
Note that there is not need to change the marginal rate functions, as the decomposition is important only for determining where revenue came from. One option would be to estimate two ETR functions -- one for the ITT and one for payroll taxes. With this, we can just modify the
tax.ETR_income()
function to call these two functions separately and return ETR on from IIT taxes and payroll taxes. In the model solution, we'll only care about the sum of these, but this function can then be used to compute IIT and payroll tax revenue in equilibrium.@rickecon thoughts?