Plot concept: One important aspect of the tax system is how it affects the after-tax income of the taxpayers. The idea of this plot concept it to provide a visualization for the impact of the tax system on taxpayer's after-tax income by plotting their budget constraints under the baseline and reform policies. The FORTAX model of the UK tax system by Shaw and Sheppard provides output such as this:
Technical notes:
The Tax Calculator can perform calculations from which one could create such a plot.
The for US tax policy, one would replace the horizontal axis with pre-tax earnings (rather than hours).
It might be illustrative to have the 45 degree line plotted also, so one could more easily see how tax systems affect after tax income.
One would probably want to plot different lines for different filing statuses and different numbers of dependents. A good way to do this might be to have the plot show 3 lines - 45 degree, current law, and reform. A set of sliders would change the lines to represent the budget constraints for filers with different filing statuses or different numbers of dependents.
Plot concept: One important aspect of the tax system is how it affects the after-tax income of the taxpayers. The idea of this plot concept it to provide a visualization for the impact of the tax system on taxpayer's after-tax income by plotting their budget constraints under the baseline and reform policies. The FORTAX model of the UK tax system by Shaw and Sheppard provides output such as this:
Technical notes: