Align MTR and cliff computations

PolicyEngine / policyengine-us

The PolicyEngine US Python package contains a rules engine of the US tax-benefit system, and microdata generation for microsimulation analysis.

https://policyengine.org/us

GNU Affero General Public License v3.0

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Align MTR and cliff computations #1564

Open MaxGhenis opened 1 year ago

MaxGhenis commented 1 year ago

Currently we compute MTRs with a delta of $1,000 (hard-coded), and compute cliffs with a delta of $2,000 (parameterized). The adult parameters are also both set to 1. Can we align these to use the same parameters?

nikhilwoodruff commented 1 year ago

If they used the same parameters, are we saying that cliff = mtr > x?

MaxGhenis commented 1 year ago

Yep cliff == MTR > 100%

But this wouldn't fit with our current MTR chart since we're holding non-firsy adults' income constant. But maybe the cliff approach, where x axis is total household earnings, makes more sense there, too?