diff --git a/src/posts/articles/Benefit-uprating-25.md b/src/posts/articles/Benefit-uprating-25.md index 8afb9027f..d806b32bc 100644 --- a/src/posts/articles/Benefit-uprating-25.md +++ b/src/posts/articles/Benefit-uprating-25.md @@ -4,7 +4,7 @@ PolicyEngine estimates that the 1.7% benefits uprating for 2025/26: -- increases government costs by [£2.5 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=69807&mode=lite) +- increases government costs by [£2.5 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=69807&mode=lite) - lowers poverty by 1.8% - raises net income for 45.9% of people diff --git a/src/posts/articles/american-family-act-2025.md b/src/posts/articles/american-family-act-2025.md index b9a080364..85c82207b 100644 --- a/src/posts/articles/american-family-act-2025.md +++ b/src/posts/articles/american-family-act-2025.md @@ -12,7 +12,7 @@ Key results (static): - Reduces the Gini index of income inequality by 2.4% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps)._ ## History of Democrats’ Push to Expand the CTC @@ -20,7 +20,7 @@ In the past decade, Democratic lawmakers have supported several proposals to exp ## The American Family Act’s Provisions -The 2025 American Family Act makes several changes to the Child Tax Credit (CTC). While the 2025 AFA shares a structure with previous versions and [Harris’s CTC plan](https://policyengine.org/us/research/harris-ctc) and the [American Rescue Plan Act CTC](https://policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit), it offers larger benefits than these other CTC proposals. +The 2025 American Family Act makes several changes to the Child Tax Credit (CTC). While the 2025 AFA shares a structure with previous versions and [Harris’s CTC plan](https://legacy.policyengine.org/us/research/harris-ctc) and the [American Rescue Plan Act CTC](https://legacy.policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit), it offers larger benefits than these other CTC proposals. Under the 2025 AFA, children under the age of six are eligible for a maximum credit of $4,320 ($360 per month), while children aged 6 to 17 would receive $3,600 ($300 per month). The 2025 AFA also contains a baby bonus where parents of newborns can claim $2,400 for the first month instead of the standard $360 monthly credit for young children. This means families with newborn children would receive a total of $6,360 during the baby’s first year. Additionally, the 2025 AFA extends the $500 nonrefundable adult dependent credit beyond its scheduled 2026 expiration date, preserving a benefit that was originally enacted in the Tax Cuts and Jobs Act of 2017. @@ -42,15 +42,15 @@ Table 1 summarizes the key parameters of the 2025 AFA compared against the previ ## Household Impacts -Since the 2025 AFA makes the CTC fully refundable, households with no household earnings would now be eligible for the entire credit, raising their net income. For example, a single parent with a newborn and no income currently receives no CTC. However, with the fully refundable CTC and baby bonus component, their [net income would increase by $6,360](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53124), the highest gain of any household with one child. +Since the 2025 AFA makes the CTC fully refundable, households with no household earnings would now be eligible for the entire credit, raising their net income. For example, a single parent with a newborn and no income currently receives no CTC. However, with the fully refundable CTC and baby bonus component, their [net income would increase by $6,360](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53124), the highest gain of any household with one child. -Middle-income families with qualifying children will also see a boost to their net income. For example, a married couple with two children (ages 4 and 8) with $80,000 of annual earnings [would gain $3,920](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53129). Their new CTC allotment would reach $7,920, increasing from $4,000 today. +Middle-income families with qualifying children will also see a boost to their net income. For example, a married couple with two children (ages 4 and 8) with $80,000 of annual earnings [would gain $3,920](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53129). Their new CTC allotment would reach $7,920, increasing from $4,000 today. -As income rises, households will be subject to the initial phase-out. A single parent with one older child and $135,000 of earnings will receive $2,450 from the CTC, [resulting in a gain of $450 to their net income](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53141). As this household’s income exceeds the lower threshold of $112,500 for head of household filers, the CTC value is reduced, falling by $1,150 from its $3,600 maximum. If this family’s income fell between $150,000 and $300,000, they would receive $2,000 as the initial threshold cannot reduce the benefit lower than $2,000 per child. +As income rises, households will be subject to the initial phase-out. A single parent with one older child and $135,000 of earnings will receive $2,450 from the CTC, [resulting in a gain of $450 to their net income](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53141). As this household’s income exceeds the lower threshold of $112,500 for head of household filers, the CTC value is reduced, falling by $1,150 from its $3,600 maximum. If this family’s income fell between $150,000 and $300,000, they would receive $2,000 as the initial threshold cannot reduce the benefit lower than $2,000 per child. -However, because the current CTC begins to fully phase out at $200,000 for head of household filers, this household with $250,000 of annual earnings would see a [$2,000 increase to their net income](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53143) as the AFA raises the higher phaseout threshold to $300,000. Once household income reaches $340,000, the CTC fully phases out, and their change in net income falls back to $0. +However, because the current CTC begins to fully phase out at $200,000 for head of household filers, this household with $250,000 of annual earnings would see a [$2,000 increase to their net income](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=53143) as the AFA raises the higher phaseout threshold to $300,000. Once household income reaches $340,000, the CTC fully phases out, and their change in net income falls back to $0. -The AFA leaves some married filers with both adult and child dependents worse off: consider a couple with earnings of $425,000, an adult dependent, and an 8-year-old child. As the AFA phases out — the adult dependent credit and CTC simultaneously — joint filers see a decrease in net income until the entirety of the CTC and adult dependent credit value phases out, as under current law. For this household, net income begins to fall at $400,000 before plateauing at [a $500 decrease](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=54174). Once the current CTC is phased out at $440,000, net income begins to rise as the remaining $500 adult dependent credit begins to phase out. At $450,000, net income stabilizes at $0. The AFA’s increased head of household phase-out threshold prevents unmarried filers from paying higher tax. +The AFA leaves some married filers with both adult and child dependents worse off: consider a couple with earnings of $425,000, an adult dependent, and an 8-year-old child. As the AFA phases out — the adult dependent credit and CTC simultaneously — joint filers see a decrease in net income until the entirety of the CTC and adult dependent credit value phases out, as under current law. For this household, net income begins to fall at $400,000 before plateauing at [a $500 decrease](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=82820®ion=us&timePeriod=2028&baseline=2&dataset=enhanced_cps&household=54174). Once the current CTC is phased out at $440,000, net income begins to rise as the remaining $500 adult dependent credit begins to phase out. At $450,000, net income stabilizes at $0. The AFA’s increased head of household phase-out threshold prevents unmarried filers from paying higher tax. Figure 1 displays the value of the CTC under the AFA compared to current law, while Figure 2 shows the change in net income for a single parent with one older child as annual earnings vary. @@ -78,7 +78,7 @@ Table 2 summarizes the change in net income for each household discussed above. ## Microsimulation Results -Using PolicyEngine’s static microsimulation model, we project that the American Family Act will cost the federal government [$167.2 billion in 2025](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). Over a ten-year period (2025–2034), the legislation will reduce federal tax revenues by $2.5 trillion. +Using PolicyEngine’s static microsimulation model, we project that the American Family Act will cost the federal government [$167.2 billion in 2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). Over a ten-year period (2025–2034), the legislation will reduce federal tax revenues by $2.5 trillion. **Table 3: Annual Federal Budgetary Impact of the AFA** @@ -98,25 +98,25 @@ Using PolicyEngine’s static microsimulation model, we project that the America Because the TCJA’s CTC provisions expire for tax year 2026, the cost of the AFA increases as the CTC’s value is projected to fall to $1,000 compared to its current maximum of $2,000. In addition to the federal budgetary impact, the AFA will reduce state revenues by $35 billion over ten years due to interactions with the CTC provisions. -The AFA will [raise the net income of 42.1% of American residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) in 2025, including 25% of those in the top income decile and 54% of those in the fifth decile. Additionally, 1.7% of people in the top income decile would see their net incomes decline due to the adult dependent phasing out independently of the CTC rather than as one combined value. In 2026, when the TCJA expires, the AFA will increase the net income of [46.7%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) of people, while leaving no households worse off, since the adult dependent credit expires with the TCJA. +The AFA will [raise the net income of 42.1% of American residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) in 2025, including 25% of those in the top income decile and 54% of those in the fifth decile. Additionally, 1.7% of people in the top income decile would see their net incomes decline due to the adult dependent phasing out independently of the CTC rather than as one combined value. In 2026, when the TCJA expires, the AFA will increase the net income of [46.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) of people, while leaving no households worse off, since the adult dependent credit expires with the TCJA. **Figure 2: Winners of the AFA (2025)** ![](https://cdn-images-1.medium.com/max/2000/0*WD5Kayp8qBK35MiO) -The AFA is projected to provide an average benefit of [$1,115 per household](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). Families in the fifth decile would see the highest average benefit at $1,491, while the top decile would see the lowest gain of $524, due to the credit phaseouts. When examining average benefit by percent of net income, the [first decile receives the largest gain](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps), then decreases by each subsequent decile. In 2026, the average household benefit [increases to $1,540](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps). +The AFA is projected to provide an average benefit of [$1,115 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). Families in the fifth decile would see the highest average benefit at $1,491, while the top decile would see the lowest gain of $524, due to the credit phaseouts. When examining average benefit by percent of net income, the [first decile receives the largest gain](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps), then decreases by each subsequent decile. In 2026, the average household benefit [increases to $1,540](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps). **Figure 3: Average Benefit of the AFA by Decile (2025 and 2026)** ![](https://cdn-images-1.medium.com/max/2000/0*ge7UUoqD7bSVBD-M) -The child tax credit expansion would [reduce poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 11.4% and child poverty by 25.2% in 2025. Deep poverty and deep child poverty would [fall by 12.2% and 29.9%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps), respectively. These poverty statistics vary by less than six percentage points across years in the 10-year budget window. +The child tax credit expansion would [reduce poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 11.4% and child poverty by 25.2% in 2025. Deep poverty and deep child poverty would [fall by 12.2% and 29.9%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps), respectively. These poverty statistics vary by less than six percentage points across years in the 10-year budget window. **Figure 4: Poverty Reduction Under the AFA (2025)** ![](https://cdn-images-1.medium.com/max/2000/0*Pp-AjRIDH8FppVqL) -Finally, the AFA will reduce the United States’ Gini index of inequality [by 2.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). The bill would also reduce the top 10% and 1%’s share of net income by 0.4% and 1.0%, respectively. In 2026, the Gini index is [projected to fall by 2.8%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps). +Finally, the AFA will reduce the United States’ Gini index of inequality [by 2.4%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=82820®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps). The bill would also reduce the top 10% and 1%’s share of net income by 0.4% and 1.0%, respectively. In 2026, the Gini index is [projected to fall by 2.8%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=82820®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps). ## Conclusion @@ -124,4 +124,4 @@ The American Family Act will expand the Child Tax Credit by making the credit fu As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. diff --git a/src/posts/articles/american-worker-rebate-act.md b/src/posts/articles/american-worker-rebate-act.md index 63655b639..4670f27cb 100644 --- a/src/posts/articles/american-worker-rebate-act.md +++ b/src/posts/articles/american-worker-rebate-act.md @@ -10,7 +10,7 @@ Our microsimulation model, assuming no changes to economic conditions, projects - Expected to reduce the Gini index of inequality by 1.1% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462)._ ## How the rebate works @@ -22,9 +22,9 @@ Eligible households receive the full payment if their adjusted gross income (AGI ## Household impacts -Let's examine how the AWRA's tariff rebates could affect a hypothetical U.S. family. A married couple in Florida with two children earning $100,000 would receive the [full $2,400 rebate](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55185) in 2026, assuming all family members have valid SSNs. However, if one parent does not meet the SSN requirement and does not qualify for the armed services exception, the entire household is ineligible and [receives no benefit](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55186). If one child lacks a valid SSN, the household still qualifies [for $1,800](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55197), the full amount minus $600 for the ineligible child. +Let's examine how the AWRA's tariff rebates could affect a hypothetical U.S. family. A married couple in Florida with two children earning $100,000 would receive the [full $2,400 rebate](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55185) in 2026, assuming all family members have valid SSNs. However, if one parent does not meet the SSN requirement and does not qualify for the armed services exception, the entire household is ineligible and [receives no benefit](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55186). If one child lacks a valid SSN, the household still qualifies [for $1,800](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55197), the full amount minus $600 for the ineligible child. -Additionally, if household earnings were to rise to $160,000, then the $2,400 benefit would [fall to $1,900](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55199) as the rebate phaseout would now apply. The entire benefit would phase out once the household's AGI [reaches $198,000](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55200).[^3] Table 1 summarizes the benefit amounts for each household scenario. +Additionally, if household earnings were to rise to $160,000, then the $2,400 benefit would [fall to $1,900](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55199) as the rebate phaseout would now apply. The entire benefit would phase out once the household's AGI [reaches $198,000](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462&household=55200).[^3] Table 1 summarizes the benefit amounts for each household scenario. **Table 1: Summary of Household Impacts for a Married Couple with Two Children** @@ -50,27 +50,27 @@ Figure 2 shows how the AWRA alters the household's marginal tax rates. The house ## Microsimulation results -Using data from tax year 2024, the American Worker Rebate Act of 2025 [would cost $141.3 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), according to PolicyEngine's static modeling. Due to interactions with state tax codes, the AWRA would also raise $58.9 million in state and local tax revenue. +Using data from tax year 2024, the American Worker Rebate Act of 2025 [would cost $141.3 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), according to PolicyEngine's static modeling. Due to interactions with state tax codes, the AWRA would also raise $58.9 million in state and local tax revenue. -The legislation would [raise the net income of 80.3%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) of residents in the U.S, though the degree to which they benefit varies by income decile. Overall, 30% of residents would experience a gain of more than 5% of their net income, including 93% of those in the lowest income decile. In the top income decile, 41% of residents would see a gain (all amounting to less than 5% in their net income). +The legislation would [raise the net income of 80.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) of residents in the U.S, though the degree to which they benefit varies by income decile. Overall, 30% of residents would experience a gain of more than 5% of their net income, including 93% of those in the lowest income decile. In the top income decile, 41% of residents would see a gain (all amounting to less than 5% in their net income). **Figure 3: Winners of the AWRA's Tariff Rebates** ![](https://cdn-images-1.medium.com/max/2000/0*uFiy--rmBE7w_6L-) -The [average household benefit](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) of the AWRA would be $973. The decile experiencing the largest gain is the seventh ($1,273), while the tenth would benefit the least with an average benefit of $469. This is due to the phaseout of the rebates. +The [average household benefit](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) of the AWRA would be $973. The decile experiencing the largest gain is the seventh ($1,273), while the tenth would benefit the least with an average benefit of $469. This is due to the phaseout of the rebates. **Figure 4: Average Benefit of the AWRA's Tariff Rebates** ![](https://cdn-images-1.medium.com/max/2000/0*bIQjYwzSnpQLt6Iw) -We project the AWRA to [lower poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), as defined by the Supplemental Poverty Measure, by 6.9%, with seniors seeing the largest reduction at 11.7%. Deep poverty would [fall by 7.5%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), including a 15.2% reduction in deep child poverty. +We project the AWRA to [lower poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), as defined by the Supplemental Poverty Measure, by 6.9%, with seniors seeing the largest reduction at 11.7%. Deep poverty would [fall by 7.5%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462), including a 15.2% reduction in deep child poverty. **Figure 5: Poverty Impact of the AWRA' Tariff Rebates** ![](https://cdn-images-1.medium.com/max/2000/0*qSsl1Vo4_4slkDjA) -The proposed legislation would also [lower the Gini index of inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) by 1.07%, and lower the share of net income held by the top 10% and 1% households by 0.8% and 0.84%, respectively. +The proposed legislation would also [lower the Gini index of inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact®ion=us&timePeriod=2024&baseline=2&dataset=enhanced_cps&reform=89462) by 1.07%, and lower the share of net income held by the top 10% and 1% households by 0.8% and 0.84%, respectively. ## Conclusion @@ -78,7 +78,7 @@ The American Worker Rebate Act of 2025 would send direct payments to qualifying As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. [^1]: Qualifying persons include the head and spouse of the household and any CTC-qualifying children. Adult dependents are not eligible for payments. diff --git a/src/posts/articles/analysing-autumn-budget-universal-credit-reforms-with-policyengine.md b/src/posts/articles/analysing-autumn-budget-universal-credit-reforms-with-policyengine.md index e15a91e1f..2454f4189 100644 --- a/src/posts/articles/analysing-autumn-budget-universal-credit-reforms-with-policyengine.md +++ b/src/posts/articles/analysing-autumn-budget-universal-credit-reforms-with-policyengine.md @@ -4,7 +4,7 @@ On Wednesday, the UK’s Chancellor of the Exchequer Rishi Sunak [published the PolicyEngine estimates that this reform would cost £2.8bn per year, reduce poverty by 3.1%, and benefit 12% of the population. It will also reduce marginal tax rates by between 5.4pp and 63pp for people with income between the baseline work allowance and UC entitlement, while raising marginal tax rates by 37.4pp for people with income previously too high to receive UC. -Read on for more details, or [jump to the reform in PolicyEngine](https://policyengine.org/uk/population-impact?UC_reduction_rate=55&UC_work_allowance_with_housing=335&UC_work_allowance_without_housing=557&policy_date=20211101) to see how the reform affects the UK population and your own household. +Read on for more details, or [jump to the reform in PolicyEngine](https://legacy.policyengine.org/uk/population-impact?UC_reduction_rate=55&UC_work_allowance_with_housing=335&UC_work_allowance_without_housing=557&policy_date=20211101) to see how the reform affects the UK population and your own household. ## How Universal Credit works @@ -28,7 +28,7 @@ The reforms announced in the budget reduce the taper rate by 8pp, from 63% to 55 ### UK impact -PolicyEngine estimates the total cost of introducing the reform to be £2.7bn per year. The reform benefits 12% of the population, and it reduces poverty by 3.1% (working-age poverty decreases by 3.0% and child poverty by 6.0%). For context, PolicyEngine estimates that [restoring Universal Credit’s pandemic-related Standard Allowance](https://policyengine.org/uk/population-impact?UC_couple_old=596.58&UC_couple_young=490.6&UC_single_old=411.51&UC_single_young=344) would cost £4.2bn, reduce poverty by 4.3%, and benefit 18% of the UK. +PolicyEngine estimates the total cost of introducing the reform to be £2.7bn per year. The reform benefits 12% of the population, and it reduces poverty by 3.1% (working-age poverty decreases by 3.0% and child poverty by 6.0%). For context, PolicyEngine estimates that [restoring Universal Credit’s pandemic-related Standard Allowance](https://legacy.policyengine.org/uk/population-impact?UC_couple_old=596.58&UC_couple_young=490.6&UC_single_old=411.51&UC_single_young=344) would cost £4.2bn, reduce poverty by 4.3%, and benefit 18% of the UK. Broadly, the reform is progressive; however, individuals in the first decile gain less than those in the second, third and fourth deciles, due to their lower likelihood to earn above the Work Allowance. @@ -60,7 +60,7 @@ The reform lowers marginal tax rates more than it raises them, but its effect is We’re pleased to share this first interactive analysis of the Autumn Budget UC reform, and the first to provide personalised household impacts. Our findings broadly resemble those from the [IFS](https://ifs.org.uk/uploads/Autumn-Budget-2021-Living-Standards-by-Xiaowei-Xu.pdf) and the [Resolution Foundation](https://www.resolutionfoundation.org/publications/the-boris-budget/), who also estimate the cost at around £3bn and identify similar distributional impacts. -For more timely analysis of tax and benefit reforms, follow us here and on social media, and to create your own policy, try PolicyEngine at [policyengine.org.](https://policyengine.org/) +For more timely analysis of tax and benefit reforms, follow us here and on social media, and to create your own policy, try PolicyEngine at [policyengine.org.](https://legacy.policyengine.org/) _2021–11–04 update: This now reflects PolicyEngine 1.1.0, which incorporates Universal Credit’s minimum income floor for self-employed people._ diff --git a/src/posts/articles/analysis-of-guaranteed-income-for-the-21st-century.md b/src/posts/articles/analysis-of-guaranteed-income-for-the-21st-century.md index c14d49fb3..d72b563dc 100644 --- a/src/posts/articles/analysis-of-guaranteed-income-for-the-21st-century.md +++ b/src/posts/articles/analysis-of-guaranteed-income-for-the-21st-century.md @@ -4,19 +4,19 @@ In this report, we depict the impact on a sample household, as well as on US-wid Overall, we find that the reform would, in 2023: -- [Cost $1.26 trillion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=1006®ion=us&timePeriod=2023&baseline=2) +- [Cost $1.26 trillion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=1006®ion=us&timePeriod=2023&baseline=2) -- [Benefit three in five Americans](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) +- [Benefit three in five Americans](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) -- [Cut poverty 94%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) +- [Cut poverty 94%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) -- [Lower the Gini index of income inequality 19%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) +- [Lower the Gini index of income inequality 19%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) -- [Increase the prevalence and severity of cliffs by 466% and 100%, respectively](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) +- [Increase the prevalence and severity of cliffs by 466% and 100%, respectively](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) This report describes and compares the New School’s proposal and analysis; calculates the impact for a sample household; and goes into these US-wide results in greater depth. -[See how Guaranteed Income for the 21st Century would affect your household.](https://policyengine.org/us/household?focus=intro&reform=1006®ion=us&timePeriod=2023&baseline=2) +[See how Guaranteed Income for the 21st Century would affect your household.](https://legacy.policyengine.org/us/household?focus=intro&reform=1006®ion=us&timePeriod=2023&baseline=2) ## The Guaranteed Income for the 21st Century proposal @@ -26,7 +26,7 @@ _Guaranteed Income for the 21st Century_, or _21GI_ as the New School abbreviate ## Sample household -Consider a [single parent of one child in New York City](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=1006®ion=us&timePeriod=2023&baseline=2&household=31338). As they earn more, the net benefit of the 21GI falls, due to the shape of the EITC (in this case, federal, state, and local EITCs, since NYS and NYC based their EITCs on the federal), and the phase-out of the new payment itself. +Consider a [single parent of one child in New York City](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=1006®ion=us&timePeriod=2023&baseline=2&household=31338). As they earn more, the net benefit of the 21GI falls, due to the shape of the EITC (in this case, federal, state, and local EITCs, since NYS and NYC based their EITCs on the federal), and the phase-out of the new payment itself. ![](https://cdn-images-1.medium.com/max/3940/1*XTHawfysW_0cTtQTtO3V_w.jpeg) @@ -48,7 +48,7 @@ Our static microsimulation model, which applies 2023 tax and benefit rules to th ### Budgetary impact -We project that 21GI would cost [$1.26 trillion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=1006®ion=us&timePeriod=2023&baseline=2), including the main benefit and the EITC elimination. +We project that 21GI would cost [$1.26 trillion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=1006®ion=us&timePeriod=2023&baseline=2), including the main benefit and the EITC elimination. This estimate exceeds the New School’s estimate of $876 billion by 43%. This discrepancy could result from multiple factors, including importantly the source dataset and tax filing unit assumption. @@ -60,19 +60,19 @@ As an example, suppose a 22-year-old, who earns $30,000, lives with their parent ### Impact by income decile -The reform would [add 11.7% to net incomes](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) overall, and this percentage decreases with income, from 110% at the bottom decile to 0.7% at the top. +The reform would [add 11.7% to net incomes](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) overall, and this percentage decreases with income, from 110% at the bottom decile to 0.7% at the top. ![](https://cdn-images-1.medium.com/max/3132/1*oD2ReebhMv_OYA5zBWfiyA.jpeg) ### Distributional impacts -21GI would [benefit 60% of the population](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=1006®ion=us&timePeriod=2023&baseline=2), of whom 97% would gain at least 5% of net income. Over 99% of the bottom fifth would gain, as would 23% of those in the top decile (due to households that comprise multiple filing units). +21GI would [benefit 60% of the population](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=1006®ion=us&timePeriod=2023&baseline=2), of whom 97% would gain at least 5% of net income. Over 99% of the bottom fifth would gain, as would 23% of those in the top decile (due to households that comprise multiple filing units). ![](https://cdn-images-1.medium.com/max/3120/1*maqbky4pbH-RJX46kvBBnA.jpeg) ### Poverty -Under 21GI, poverty would fall by [94% overall](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2), and by at least 90% for most subgroups. [Deep poverty would also fall 99%](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2). +Under 21GI, poverty would fall by [94% overall](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2), and by at least 90% for most subgroups. [Deep poverty would also fall 99%](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=1006®ion=us&timePeriod=2023&baseline=2). ![](https://cdn-images-1.medium.com/max/3200/1*whSNdoMuLeXE-bRmDGtilw.jpeg) @@ -86,6 +86,6 @@ Under 21GI, poverty would fall by [94% overall](https://policyengine.org/us/poli Currently, PolicyEngine estimates that 0.6% of households face a cliff, by which an additional $2,000 of earnings per adult would make the household financially worse off. We expect that this underestimates the prevalence of cliffs, since we have not yet modeled all tax and benefit programs that would increase marginal tax rates or introduce explicit cliffs. -As a result of 21GI’s additional marginal tax rates, that rate of [cliffs would rise 466% to 3.3%](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) (one in 30 households). The total lost income from those facing cliffs would also double from $6 billion to $12 billion. +As a result of 21GI’s additional marginal tax rates, that rate of [cliffs would rise 466% to 3.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=1006®ion=us&timePeriod=2023&baseline=2) (one in 30 households). The total lost income from those facing cliffs would also double from $6 billion to $12 billion. ![](https://cdn-images-1.medium.com/max/2580/1*SwzbJH9pK-foIfuICcq0Gw.jpeg) diff --git a/src/posts/articles/analysis-of-the-spring-budget-2023.md b/src/posts/articles/analysis-of-the-spring-budget-2023.md index 3379e0453..d65bbbbb4 100644 --- a/src/posts/articles/analysis-of-the-spring-budget-2023.md +++ b/src/posts/articles/analysis-of-the-spring-budget-2023.md @@ -1,4 +1,4 @@ -[See the full impact on PolicyEngine here.](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1544) +[See the full impact on PolicyEngine here.](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1544) Today saw the announcement of the 2023 Spring Budget for 2023, with significant changes to energy subsidies in particular. In this report, we analyse the budgetary, distributional, poverty, and inequality aspects of two of the largest reforms using data from the PolicyEngine UK microsimulation model. diff --git a/src/posts/articles/automate-policy-analysis-with-policy-engines-new-chatgpt-integration.md b/src/posts/articles/automate-policy-analysis-with-policy-engines-new-chatgpt-integration.md index ae55d9805..5d3a54cca 100644 --- a/src/posts/articles/automate-policy-analysis-with-policy-engines-new-chatgpt-integration.md +++ b/src/posts/articles/automate-policy-analysis-with-policy-engines-new-chatgpt-integration.md @@ -20,7 +20,7 @@ PolicyEngine provides style guidance (replaceable with your own), which includes _Screenshot of the analysis prompt generator._ -The screenshot demonstrates an example policy reform prompt ([restoring the American Rescue Plan Act’s Earned Income Tax Credit expansion](http://policyengine.org/us/policy?focus=policyOutput.prompt&reform=6524®ion=us&timePeriod=2023&baseline=2)). ChatGPT’s unmodified analysis is provided at the end of the post. +The screenshot demonstrates an example policy reform prompt ([restoring the American Rescue Plan Act’s Earned Income Tax Credit expansion](http://legacy.policyengine.org/us/policy?focus=policyOutput.prompt&reform=6524®ion=us&timePeriod=2023&baseline=2)). ChatGPT’s unmodified analysis is provided at the end of the post. Utilizing GPT-4’s capabilities, we hope this integration streamlines policy analysis for researchers, allowing faster iteration. Both GPT-4 (available through [ChatGPT Plus](https://openai.com/blog/chatgpt-plus)) and GPT-3.5 (available on the [free ChatGPT tier](http://chat.openai.com/)) provide clear summaries. We’ve found that GPT-4 offers more clear and accurate results compared to GPT-3.5, although both deliver good outcomes. An example of GPT-3.5’s summary is available below for comparison. diff --git a/src/posts/articles/autumn-budget-2024-employer-nic-pension-contributions.md b/src/posts/articles/autumn-budget-2024-employer-nic-pension-contributions.md index 4bf3c9879..9cad6c5db 100644 --- a/src/posts/articles/autumn-budget-2024-employer-nic-pension-contributions.md +++ b/src/posts/articles/autumn-budget-2024-employer-nic-pension-contributions.md @@ -33,27 +33,27 @@ Under the ‘fixed employment cost’ assumption, the government receives £552 We apply this logic to all of the roughly 100,000 households in our representative microdata, aggregating the changes in tax liabilities and benefit entitlements. Under the static model, we estimate that revenues rise by around £18 billion per year, raising £90 billion over five years. -| Year | Revenue impact (employer NICs) | Revenue impact (other) | Revenue impact | Wages | -| :---------- | :----------------------------- | :--------------------- | :------------------------------------------------------------------------------------------------------------------------------ | :---- | -| 2025 | 17.2 | 0 | [17.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2025&baseline=1) | 0 | -| 2026 | 17.7 | 0 | [17.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2026&baseline=1) | 0 | -| 2027 | 18.1 | 0 | [18.1](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2027&baseline=1) | 0 | -| 2028 | 18.4 | 0 | [18.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2028&baseline=1) | 0 | -| 2029 | 18.9 | 0 | [18.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2029&baseline=1) | 0 | -| **2025-29** | **90.3** | **0** | **90.3** | **0** | +| Year | Revenue impact (employer NICs) | Revenue impact (other) | Revenue impact | Wages | +| :---------- | :----------------------------- | :--------------------- | :------------------------------------------------------------------------------------------------------------------------------------- | :---- | +| 2025 | 17.2 | 0 | [17.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2025&baseline=1) | 0 | +| 2026 | 17.7 | 0 | [17.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2026&baseline=1) | 0 | +| 2027 | 18.1 | 0 | [18.1](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2027&baseline=1) | 0 | +| 2028 | 18.4 | 0 | [18.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2028&baseline=1) | 0 | +| 2029 | 18.9 | 0 | [18.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69356®ion=uk&timePeriod=2029&baseline=1) | 0 | +| **2025-29** | **90.3** | **0** | **90.3** | **0** | If employers pass on NICs in the form of reduced wages, we estimate that employer NIC revenues rise by around £15 billion per year, but are offset by on average £5 billion per year in personal tax liabilities and benefit entitlements as a result of the (average) £15 billion in wage reductions. Overall, this raises £9.6 billion in 2025, totalling £50 billion over five years. -| Year | Revenue impact (Employer NICs) | Revenue impact (other) | Revenue impact | Wages | -| :---------- | :----------------------------- | :--------------------- | :------------------------------------------------------------------------------------------------------------------------------ | :--------- | -| 2025 | 15.1 | \-5.5 | [9.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2025&baseline=1) | \-15.2 | -| 2026 | 15.6 | \-5.8 | [9.8](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2026&baseline=1) | \-15.7 | -| 2027 | 15.9 | \-6.0 | [9.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2027&baseline=1) | \-16.0 | -| 2028 | 16.2 | \-6.1 | [10.1](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2028&baseline=1) | \-16.3 | -| 2029 | 16.6 | \-6.3 | [10.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2029&baseline=1) | \-16.7 | -| **2025-29** | **79.4** | **\-29.7** | **49.7** | **\-79.9** | +| Year | Revenue impact (Employer NICs) | Revenue impact (other) | Revenue impact | Wages | +| :---------- | :----------------------------- | :--------------------- | :------------------------------------------------------------------------------------------------------------------------------------- | :--------- | +| 2025 | 15.1 | \-5.5 | [9.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2025&baseline=1) | \-15.2 | +| 2026 | 15.6 | \-5.8 | [9.8](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2026&baseline=1) | \-15.7 | +| 2027 | 15.9 | \-6.0 | [9.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2027&baseline=1) | \-16.0 | +| 2028 | 16.2 | \-6.1 | [10.1](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2028&baseline=1) | \-16.3 | +| 2029 | 16.6 | \-6.3 | [10.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69355®ion=uk&timePeriod=2029&baseline=1) | \-16.7 | +| **2025-29** | **79.4** | **\-29.7** | **49.7** | **\-79.9** | ## Employee pass-through sensitivity diff --git a/src/posts/articles/autumn-budget-2024-policy-choices.ipynb b/src/posts/articles/autumn-budget-2024-policy-choices.ipynb index 312058bfa..e20293154 100644 --- a/src/posts/articles/autumn-budget-2024-policy-choices.ipynb +++ b/src/posts/articles/autumn-budget-2024-policy-choices.ipynb @@ -6,7 +6,7 @@ "source": [ "*Image credit: The Labour Party*\n", "\n", - "*See the full impact estimate for 2025 [here](https://policyengine.org/uk/policy?reform=68829&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1).*\n", + "*See the full impact estimate for 2025 [here](https://legacy.policyengine.org/uk/policy?reform=68829&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1).*\n", "\n", "\n", "## Key findings\n", @@ -32,7 +32,7 @@ "\n", "### Private school VAT\n", "\n", - "In their manifesto, Labour also committed to levying VAT (as well as business rates) on private school fees from FY2025. We estimate this raises around £1.5 billion per year, assuming no behavioural responses, mostly from higher-income deciles. Read more detail about the policy in our recently-published report [here](https://policyengine.org/uk/research/school-vat).\n", + "In their manifesto, Labour also committed to levying VAT (as well as business rates) on private school fees from FY2025. We estimate this raises around £1.5 billion per year, assuming no behavioural responses, mostly from higher-income deciles. Read more detail about the policy in our recently-published report [here](https://legacy.policyengine.org/uk/research/school-vat).\n", "\n", "\n", "### Employer NICs\n", @@ -52,7 +52,7 @@ "\n", "## Economic impacts\n", "\n", - "PolicyEngine [estimates](https://policyengine.org/uk/policy?reform=68829&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) that these reforms combined would raise £25 billion per year over five years, with over half of the revenue impact from the employer NICs reform. The table below summarises these reforms’ impacts over the budget window (with the behavioural responses as stated previously).\n", + "PolicyEngine [estimates](https://legacy.policyengine.org/uk/policy?reform=68829&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) that these reforms combined would raise £25 billion per year over five years, with over half of the revenue impact from the employer NICs reform. The table below summarises these reforms’ impacts over the budget window (with the behavioural responses as stated previously).\n", "\n", "\n", "| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2025-29 |\n", @@ -61,7 +61,7 @@ "| Levy private school VAT | 1.5 | 1.5 | 1.5 | 1.6 | 1.6 | 7.7 |\n", "| Raise CGT to 24% | 1.6 | 1.9 | 2.0 | 2.3 | 2.3 | 10.1 |\n", "| Reduce tax avoidance | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 29.5 |\n", - "| **Total** | **[23.1](https://policyengine.org/uk/policy?reform=69049&focus=policyOutput.distributionalImpact.incomeDecile.relative®ion=uk&timePeriod=2025&baseline=1)** | **23.1** | **22.6** | **22.4** | **22.7** | **113.9** |" + "| **Total** | **[23.1](https://legacy.policyengine.org/uk/policy?reform=69049&focus=policyOutput.distributionalImpact.incomeDecile.relative®ion=uk&timePeriod=2025&baseline=1)** | **23.1** | **22.6** | **22.4** | **22.7** | **113.9** |" ] }, { diff --git a/src/posts/articles/autumn-budget-24-employer-ni.md b/src/posts/articles/autumn-budget-24-employer-ni.md index f24599bbb..ea6463c02 100644 --- a/src/posts/articles/autumn-budget-24-employer-ni.md +++ b/src/posts/articles/autumn-budget-24-employer-ni.md @@ -1,6 +1,6 @@ _Credit: World Economic Forum/Walter Duerst_ -[See the full impact on PolicyEngine here.](https://policyengine.org/uk/policy?reform=69728&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) +[See the full impact on PolicyEngine here.](https://legacy.policyengine.org/uk/policy?reform=69728&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) The Chancellor Rachel Reeves has announced reforms to employer National Insurance (NI) contributions, marking the most substantial revenue-raising measure in the Autumn Budget 2024. The changes include raising the main rate from 13.8% to 15.0% while simultaneously lowering the Secondary Threshold at which employers begin contributing from £9,100 to £5,000 per year. Additionally, Reeves has raised the [Employment Allowance](https://www.gov.uk/claim-employment-allowance) from £5,000 to £10,000 and eliminated its cap. This analysis focuses on the rate rise and threshold reduction. diff --git a/src/posts/articles/autumn-budget-24-fuel-duty.md b/src/posts/articles/autumn-budget-24-fuel-duty.md index a76a726d6..f04ed4f46 100644 --- a/src/posts/articles/autumn-budget-24-fuel-duty.md +++ b/src/posts/articles/autumn-budget-24-fuel-duty.md @@ -1,4 +1,4 @@ -_[See the full impact on PolicyEngine here.](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69734®ion=uk&timePeriod=2025&baseline=1)_ +_[See the full impact on PolicyEngine here.](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69734®ion=uk&timePeriod=2025&baseline=1)_ Chancellor Rachel Reeves today confirmed that duty will remain frozen at £0.5295 per litre for FY 2025, before rising with retail price inflation in future years, continuing a policy approach that has been maintained for several years. diff --git a/src/posts/articles/autumn-statement-2023.md b/src/posts/articles/autumn-statement-2023.md index d546e2151..a2ebccc15 100644 --- a/src/posts/articles/autumn-statement-2023.md +++ b/src/posts/articles/autumn-statement-2023.md @@ -1,4 +1,4 @@ -_See the Autumn Statement 2023 on PolicyEngine [here](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1)._ +_See the Autumn Statement 2023 on PolicyEngine [here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1)._ Today, the Chancellor of the Exchequer Jeremy Hunt delivered the annual [Autumn Statement](https://assets.publishing.service.gov.uk/media/655d0a83544aea000dfb321d/Autumn_Statement_2023_Policy_Costings_-_Final.pdf), in which he announced several tax and benefit reforms, including two to National Insurance Contributions (NICs): @@ -8,7 +8,7 @@ Today, the Chancellor of the Exchequer Jeremy Hunt delivered the annual [Autumn In this post, we'll use PolicyEngine to estimate the budgetary, distributional and poverty impacts of these reforms. -_See how the combined reforms would affect your own household using our [personalised calculator](https://policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1)_ +_See how the combined reforms would affect your own household using our [personalised calculator](https://legacy.policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1)_ ## Autumn Budget 2023 reforms @@ -36,7 +36,7 @@ Non-State Pension benefits will rise by 6.7%, the inflation rate as measured by In its [Autumn Statement 2023 Policy Costings document](https://assets.publishing.service.gov.uk/media/655d0a83544aea000dfb321d/Autumn_Statement_2023_Policy_Costings_-_Final.pdf#page=64), HM Treasury defines its _Default indexation assumed in the baseline_ as above. Since HM Treasury treats these announcements as following defaults rather than reforms, we follow suit and have only updated the baseline. -Compared to a counterfactual where benefits are not uprated at all, we estimate that this set of upratings will [cost £5.9 billion in 2024](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&timePeriod=2024®ion=uk&reform=1&baseline=37721). +Compared to a counterfactual where benefits are not uprated at all, we estimate that this set of upratings will [cost £5.9 billion in 2024](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&timePeriod=2024®ion=uk&reform=1&baseline=37721). ### Other reforms @@ -46,7 +46,7 @@ He notably did _not_ announce reforms that outlets had previously reported he wa ## Household impacts of NIC cuts -For a [single person with only employment income](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=37636®ion=uk&timePeriod=2023&baseline=1&household=32608), this reform produces a benefit if they earn at least £12,570. It would produce the maximum benefit of £377 if they earn at least £50,500. +For a [single person with only employment income](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=37636®ion=uk&timePeriod=2023&baseline=1&household=32608), this reform produces a benefit if they earn at least £12,570. It would produce the maximum benefit of £377 if they earn at least £50,500. ![Figure 1: Impact of cutting 2p from NI rates on a single person](https://user-images.githubusercontent.com/6076111/285001945-5d30d660-75c5-4fcd-9651-9b2fccab300a.png) @@ -54,7 +54,7 @@ These reforms lower marginal tax rates for individuals earning within that regio ![Figure 2: Impact of cutting 2p from NI rates on a single person's marginal tax rates](https://user-images.githubusercontent.com/6076111/285002391-620c0fa8-7a39-4bd5-a68f-c0afa987d029.png) -_See how the National Insurance cuts would affect your own household using our [personalised calculator](https://policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1)._ +_See how the National Insurance cuts would affect your own household using our [personalised calculator](https://legacy.policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1)._ ## Societal impact of NIC cuts @@ -62,29 +62,29 @@ Applying the PolicyEngine microsimulation model, we can estimate the impact of t ### Budgetary impacts -Our microsimulation model projects that this NI cut will [cost £10.5 billion](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1) in 2024. +Our microsimulation model projects that this NI cut will [cost £10.5 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1) in 2024. Our estimates exceed those from HM Treasury by about 12%, disproportionately due to Class 4 NICs. This largely results from our static model, compared to HM Treasury's behavioural responses, which assume that earnings will rise in response to lower tax rates. However, unlike HM Treasury, we also model the impact on benefits, which lowers our cost estimate: as benefits are calculated on post-tax income, tax cuts reduce benefits payments. -| Reform | HM Treasury | PolicyEngine | Relative difference | PolicyEngine link | -| ---------------------------------- | ----------- | ------------ | ------------------- | --------------------------------------------------------------------------------------------------------------------------- | -| Lower Class 1 NICs from 12% to 10% | 8.72 | 9.69 | 11.2% | [#28973](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=28973®ion=uk&timePeriod=2024&baseline=1) | -| Lower Class 4 NICs from 9% to 8% | 0.35 | 0.44 | 26.9% | [#37642](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37642®ion=uk&timePeriod=2024&baseline=1) | -| Abolish Class 2 NICs | 0.38 | 0.41 | 8.8% | [#37665](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37665®ion=uk&timePeriod=2024&baseline=1) | -| Total | 9.44 | 10.54 | 11.7% | [#37636](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1) | +| Reform | HM Treasury | PolicyEngine | Relative difference | PolicyEngine link | +| ---------------------------------- | ----------- | ------------ | ------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | +| Lower Class 1 NICs from 12% to 10% | 8.72 | 9.69 | 11.2% | [#28973](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=28973®ion=uk&timePeriod=2024&baseline=1) | +| Lower Class 4 NICs from 9% to 8% | 0.35 | 0.44 | 26.9% | [#37642](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37642®ion=uk&timePeriod=2024&baseline=1) | +| Abolish Class 2 NICs | 0.38 | 0.41 | 8.8% | [#37665](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37665®ion=uk&timePeriod=2024&baseline=1) | +| Total | 9.44 | 10.54 | 11.7% | [#37636](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=37636®ion=uk&timePeriod=2024&baseline=1) | ### Distributional impacts -Households in the bottom income decile would [gain an average of £12](https://policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1), while those in the top decile would gain an average of £1,067. +Households in the bottom income decile would [gain an average of £12](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1), while those in the top decile would gain an average of £1,067. ![Figure 3: Relative impact by income decile of Autumn Budget NI reforms](https://user-images.githubusercontent.com/6076111/284982468-181d24ac-ff5c-498b-95eb-35a1311af7bb.png) -As a result of the reform, [66% of the population](https://policyengine.org/uk/policy?focus=policyOutput.intraDecileImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1) would see their household net income rise, disproportionately those in higher-income households: around 90% of the top three deciles benefit, compared to around 25% of the bottom three. +As a result of the reform, [66% of the population](https://legacy.policyengine.org/uk/policy?focus=policyOutput.intraDecileImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1) would see their household net income rise, disproportionately those in higher-income households: around 90% of the top three deciles benefit, compared to around 25% of the bottom three. ![Figure 4: Percentage of individuals gaining from Autumn Budget NI reforms, by income decile](https://user-images.githubusercontent.com/6076111/284982567-35937f5f-a82a-44e0-8a11-fb651413519b.png) -The reform has a [small, ambiguous effect on income inequality](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1): while the Gini index rises by 0.4%, the top 1% share of income falls by 0.4%. It [does not affect cliffs](https://policyengine.org/uk/policy?focus=policyOutput.cliffImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1). Absolute, before-housing-costs [poverty falls by 0.5%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1), or around 60,000 individuals. +The reform has a [small, ambiguous effect on income inequality](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1): while the Gini index rises by 0.4%, the top 1% share of income falls by 0.4%. It [does not affect cliffs](https://legacy.policyengine.org/uk/policy?focus=policyOutput.cliffImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1). Absolute, before-housing-costs [poverty falls by 0.5%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=37636®ion=uk&timePeriod=2024&baseline=1), or around 60,000 individuals. ## Conclusion -In summary, PolicyEngine estimates the Autumn Budget 2023's National Insurance reforms will cost £10.5 billion in 2024, and will benefit two in three Britons, disproportionately those in higher-income households. We project a small, ambiguous effect on income inequality, and a 0.5% poverty reduction. We invite readers to use our [personalised calculator](https://policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1) to estimate the impact on their own household, and to follow our work for more analyses of current tax and benefit policies. +In summary, PolicyEngine estimates the Autumn Budget 2023's National Insurance reforms will cost £10.5 billion in 2024, and will benefit two in three Britons, disproportionately those in higher-income households. We project a small, ambiguous effect on income inequality, and a 0.5% poverty reduction. We invite readers to use our [personalised calculator](https://legacy.policyengine.org/uk/household?focus=intro&reform=37636®ion=uk&timePeriod=2023&baseline=1) to estimate the impact on their own household, and to follow our work for more analyses of current tax and benefit policies. diff --git a/src/posts/articles/behavioural-responses.md b/src/posts/articles/behavioural-responses.md index 1a9c551b0..4f21d3a0c 100644 --- a/src/posts/articles/behavioural-responses.md +++ b/src/posts/articles/behavioural-responses.md @@ -24,7 +24,7 @@ Unlike the [OBR](https://obr.uk/docs/dlm_uploads/NICS-Cut-Impact-on-Labour-Suppl ### An illustrative example -To understand how these elasticities work, consider a worker earning £30,000 per year. This worker currently faces a marginal tax rate of [28%](https://policyengine.org/uk/household?focus=householdOutput.netIncome&household=49381) (combining income tax and National Insurance) and takes home [£24,961](https://policyengine.org/uk/household?focus=householdOutput.netIncome&household=49381) after taxes and transfers. At the current tax rates, this worker's net-of-tax wage rate is 72% of her gross wage. Now imagine a new policy that increases basic income tax by 1p (from 20% to 21%). In this case, PolicyEngine calculates that this new policy decreases her net income by [£175](https://policyengine.org/uk/household?focus=householdOutput.netIncome&reform=53461®ion=uk&timePeriod=2025&baseline=1&household=49381). +To understand how these elasticities work, consider a worker earning £30,000 per year. This worker currently faces a marginal tax rate of [28%](https://legacy.policyengine.org/uk/household?focus=householdOutput.netIncome&household=49381) (combining income tax and National Insurance) and takes home [£24,961](https://legacy.policyengine.org/uk/household?focus=householdOutput.netIncome&household=49381) after taxes and transfers. At the current tax rates, this worker's net-of-tax wage rate is 72% of her gross wage. Now imagine a new policy that increases basic income tax by 1p (from 20% to 21%). In this case, PolicyEngine calculates that this new policy decreases her net income by [£175](https://legacy.policyengine.org/uk/household?focus=householdOutput.netIncome&reform=53461®ion=uk&timePeriod=2025&baseline=1&household=49381). For this worker earning £14.42 per hour (£30,000/2,080 hours), the take-home pay per extra hour drops from £10.38 to £10.21 under the new policy – a 1.6% decrease. Using PolicyEngine's central estimates, we calculate two effects: @@ -46,7 +46,7 @@ By default, the PolicyEngine web app assumes no behavioural responses. When user ## Comparing static and dynamic analysis -Here we demonstrate how incorporating behavioural responses affects policy analysis by examining a tax reform proposed by the UK government in October 2024: change to Capital Gains Tax. For a detailed analysis of this and other reforms proposed in the Autumn Budget, see [PolicyEngine's reform impact analysis](https://policyengine.org/uk/research/autumn-budget-2024-policy-choices). +Here we demonstrate how incorporating behavioural responses affects policy analysis by examining a tax reform proposed by the UK government in October 2024: change to Capital Gains Tax. For a detailed analysis of this and other reforms proposed in the Autumn Budget, see [PolicyEngine's reform impact analysis](https://legacy.policyengine.org/uk/research/autumn-budget-2024-policy-choices). In estimating the impacts of this reform, we model how individuals with capital gains respond to changes in their marginal tax rate. The table below compares the five-year revenue impacts under both static and dynamic scenarios. @@ -62,7 +62,7 @@ In this report, we present how PolicyEngine models three behavioural responses: 2. **Substitution effect for labour supply: 0.25 elasticity** (a 10% increase to the net marginal wage increases work hours by 2.5%) 3. **Capital gains response: \-0.7 elasticity** (a 10% increase in the marginal tax rate with respect to capital gains reduces capital gains by 7%) -While this report focuses on these three core elasticities, PolicyEngine is expanding its behavioural modelling capabilities. For instance, we developed responses to [employer National Insurance contributions](https://policyengine.org/uk/research/autumn-budget-24-employer-ni), indicating the extent to which employers pass on the burden to lower wages. Using the CGT reform as an example demonstrates the importance of these behavioural responses. PolicyEngine's flexibility allows users to adjust behavioural response assumptions such as labour elasticities and capital gains elasticity to analyse the impact of public policies. +While this report focuses on these three core elasticities, PolicyEngine is expanding its behavioural modelling capabilities. For instance, we developed responses to [employer National Insurance contributions](https://legacy.policyengine.org/uk/research/autumn-budget-24-employer-ni), indicating the extent to which employers pass on the burden to lower wages. Using the CGT reform as an example demonstrates the importance of these behavioural responses. PolicyEngine's flexibility allows users to adjust behavioural response assumptions such as labour elasticities and capital gains elasticity to analyse the impact of public policies. [^1]: Chetty, R., Guren, A., Manoli, D., & Weber, A. (2011). Are Micro and Macro Labor Supply Elasticities Consistent? A Review of Evidence on the Intensive and Extensive Margins. American Economic Review, 101(3), 471–475. diff --git a/src/posts/articles/biden-budget-2025.md b/src/posts/articles/biden-budget-2025.md index ad247ec29..4951c8a6b 100644 --- a/src/posts/articles/biden-budget-2025.md +++ b/src/posts/articles/biden-budget-2025.md @@ -10,7 +10,7 @@ President Biden introduced his [2025 Budget](https://www.whitehouse.gov/briefing We estimate that, in 2024 and assuming no behavioral responses, these reforms would cost $40.5 billion, lower poverty 12%, and lower income inequality. 59% of Americans would see a higher net income, while 3% would see a lower net income. This report describes these impacts in more detail, and examines effects on individual households. -**See how President Biden’s 2025 Budget affects your household with our [personalized calculator.](https://policyengine.org/us/household?reform=50893&focus=intro®ion=enhanced_us&timePeriod=2024&baseline=2)** +**See how President Biden’s 2025 Budget affects your household with our [personalized calculator.](https://legacy.policyengine.org/us/household?reform=50893&focus=intro®ion=enhanced_us&timePeriod=2024&baseline=2)** ## The reforms @@ -20,11 +20,11 @@ Here we summarize the four provisions of Biden’s 2025 Budget that PolicyEngine Biden’s budget restores the expansion to the Child Tax Credit (CTC) enacted in the American Rescue Plan Act (ARPA). It would make the CTC fully refundable beginning in 2024, and for 2024 and 2025 increase the age limit from 16 to 17. Additionally, it increases the maximum credit per child to $3,600 for children under 6, and $3,000 for older children, phasing out at 5% of income in excess of a threshold dependent on filing status: $150,000 (married joint), $112,500 (head of household), and $75,000 (other). These amounts are not inflation-adjusted. -For example, this reform would provide an additional $3,600 to a single parent of two children, with one below six, if their income is below $6,600. The net benefit would phase out until their earnings reach $164,000, as shown [here](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=3826®ion=us&timePeriod=2024&baseline=2&household=43046). +For example, this reform would provide an additional $3,600 to a single parent of two children, with one below six, if their income is below $6,600. The net benefit would phase out until their earnings reach $164,000, as shown [here](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=3826®ion=us&timePeriod=2024&baseline=2&household=43046). ![](https://cdn-images-1.medium.com/max/2972/0*b4iPi1yq5BgsTHux) -To learn more, read our [**2023 report on restoring the ARPA CTC.**](https://policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit) +To learn more, read our [**2023 report on restoring the ARPA CTC.**](https://legacy.policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit) ### Restoring the 2021 Earned Income Tax Credit expansion for filers without qualifying children @@ -38,7 +38,7 @@ Biden similarly proposed restoring ARPA’s expansion of the Earned Income Tax C - Raise the maximum credit from $632 to $1,749 (adjusted for inflation from 2021) -This would change the EITC [as follows](https://policyengine.org/us/household?reform=50974&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=40437) for a single person between 25 and 65: +This would change the EITC [as follows](https://legacy.policyengine.org/us/household?reform=50974&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=40437) for a single person between 25 and 65: ![](https://cdn-images-1.medium.com/max/3004/0*O92F233Vaga2cfI8) @@ -46,19 +46,19 @@ Producing a net benefit of up to $1,360 at $13,500 earnings, phasing out until e ![](https://cdn-images-1.medium.com/max/3000/0*8yOkbR3oWf6mNbRM) -To learn more, read our [2023 report on restoring the ARPA EITC.](https://policyengine.org/us/research/restoring-arpa-eitc) +To learn more, read our [2023 report on restoring the ARPA EITC.](https://legacy.policyengine.org/us/research/restoring-arpa-eitc) ### Increasing the top marginal rate to 39.6% The President proposed raising the top marginal tax rate from 37% to 39.6%, its value prior to the Tax Cuts and Jobs Act of 2017. The new rate would apply to income above $400,000 for single filers, $425,000 for head of household filers, $450,000 for married filers, and $225,000 for married separate filers. The reform would take effect in 2024, and the thresholds would rise with inflation starting in 2025. -For a [single person](https://policyengine.org/us/household?reform=50882&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43050) without itemized deductions, taxes would begin rising at $414,600 ($400,000 plus the standard deduction), and reach $19,400 in additional taxes at $1 million earnings. +For a [single person](https://legacy.policyengine.org/us/household?reform=50882&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43050) without itemized deductions, taxes would begin rising at $414,600 ($400,000 plus the standard deduction), and reach $19,400 in additional taxes at $1 million earnings. ![](https://cdn-images-1.medium.com/max/2260/0*B4zBerNqDKQtXONc) ### Increasing the Medicare and Net Investment Income taxes -Finally, the President proposed increasing both the top Medicare tax rate and top Net Investment Income Tax (NIIT) rate by 1.2 percentage points for individuals with income over $400,000. Since this is based on wages or net investment income, it kicks in at $400,000, not the higher amount resulting from the standard deduction. For an [individual](https://policyengine.org/us/household?reform=50660&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) with $1 million in wages, it would increase their taxes by $7,200. +Finally, the President proposed increasing both the top Medicare tax rate and top Net Investment Income Tax (NIIT) rate by 1.2 percentage points for individuals with income over $400,000. Since this is based on wages or net investment income, it kicks in at $400,000, not the higher amount resulting from the standard deduction. For an [individual](https://legacy.policyengine.org/us/household?reform=50660&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) with $1 million in wages, it would increase their taxes by $7,200. ![](https://cdn-images-1.medium.com/max/2268/0*EG5QzaVzXMfuxZ3c) @@ -82,21 +82,21 @@ To see the combined impacts of all four reforms on net income and work incentive ### Single person -The [single person](https://policyengine.org/us/household?reform=51189&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) would see a larger EITC at low incomes, then a tax increase when their wages exceed $400,000, reaching a $26,600 total impact at $1 million earnings. +The [single person](https://legacy.policyengine.org/us/household?reform=51189&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) would see a larger EITC at low incomes, then a tax increase when their wages exceed $400,000, reaching a $26,600 total impact at $1 million earnings. ![](https://cdn-images-1.medium.com/max/3152/0*G3krZSBCHVu2Xbwf) -Their [marginal tax rate](https://policyengine.org/us/household?reform=51189&focus=householdOutput.mtr®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) would fall up to 20pp in the earnings range where the EITC phases in further, then rise 15.3 percentage points as it phases out. It would then rise by 1.2pp from $400,000 to $414,600 (due to the additional Medicare rate, before the 39.6% rate kicks in), 5.8pp until earnings reach $623,950 (before they reach the current top marginal rate), and stabilize at a 3.8pp rise. The total marginal rate on top earnings would reach 43.2%. +Their [marginal tax rate](https://legacy.policyengine.org/us/household?reform=51189&focus=householdOutput.mtr®ion=enhanced_us&timePeriod=2024&baseline=2&household=43051) would fall up to 20pp in the earnings range where the EITC phases in further, then rise 15.3 percentage points as it phases out. It would then rise by 1.2pp from $400,000 to $414,600 (due to the additional Medicare rate, before the 39.6% rate kicks in), 5.8pp until earnings reach $623,950 (before they reach the current top marginal rate), and stabilize at a 3.8pp rise. The total marginal rate on top earnings would reach 43.2%. ![](https://cdn-images-1.medium.com/max/3108/0*YxlpJfHqW5R3BIEp) ### Family of four -A [married couple with two children](https://policyengine.org/us/household?reform=51189&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43059) under six will gain up to $7,200 from the expanded CTC, until their earnings reach $220,000 (assuming only one earner). Their taxes will then rise beginning at $400,000 earnings, and by $1 million earnings their taxes would rise by $27,500. +A [married couple with two children](https://legacy.policyengine.org/us/household?reform=51189&focus=householdOutput.earnings®ion=enhanced_us&timePeriod=2024&baseline=2&household=43059) under six will gain up to $7,200 from the expanded CTC, until their earnings reach $220,000 (assuming only one earner). Their taxes will then rise beginning at $400,000 earnings, and by $1 million earnings their taxes would rise by $27,500. ![](https://cdn-images-1.medium.com/max/3176/0*0IBvj5oF5Jv_cAva) -The reform increases their [marginal tax rate](https://policyengine.org/us/household?reform=51189&focus=householdOutput.mtr®ion=enhanced_us&timePeriod=2024&baseline=2&household=43059), due to making the CTC fully refundable (removing the phase-in that reduces marginal tax rates), phasing out the additional CTC benefit for higher earners, and the high-income tax increases. The marginal tax rate increase stabilizes at 3.8pp for earnings above $770,000. +The reform increases their [marginal tax rate](https://legacy.policyengine.org/us/household?reform=51189&focus=householdOutput.mtr®ion=enhanced_us&timePeriod=2024&baseline=2&household=43059), due to making the CTC fully refundable (removing the phase-in that reduces marginal tax rates), phasing out the additional CTC benefit for higher earners, and the high-income tax increases. The marginal tax rate increase stabilizes at 3.8pp for earnings above $770,000. ![](https://cdn-images-1.medium.com/max/3080/0*vzdISr5GI4VcDmjY) @@ -104,25 +104,25 @@ The reform increases their [marginal tax rate](https://policyengine.org/us/house We run the PolicyEngine tax-benefit microsimulation model v0.717.0, using our [Enhanced Current Population Survey](enhanced-cps-beta) and assuming no behavioral responses, to project budgetary and distributional impacts. -These provisions together would cost [$41 billion in 2024](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2024&baseline=2) and [$35 billion in 2025](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2025&baseline=2), according to the PolicyEngine model. While all provisions grow in magnitude, the tax increases grow faster, resulting in a smaller net impact. See Appendix A for a breakdown by provision and comparison to Treasury’s projections. +These provisions together would cost [$41 billion in 2024](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2024&baseline=2) and [$35 billion in 2025](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2025&baseline=2), according to the PolicyEngine model. While all provisions grow in magnitude, the tax increases grow faster, resulting in a smaller net impact. See Appendix A for a breakdown by provision and comparison to Treasury’s projections. -The net income of the bottom nine deciles would [rise](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.decileAverageImpact®ion=enhanced_us&timePeriod=2024&baseline=2), on average, while the top decile’s would fall. +The net income of the bottom nine deciles would [rise](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.decileAverageImpact®ion=enhanced_us&timePeriod=2024&baseline=2), on average, while the top decile’s would fall. ![](https://cdn-images-1.medium.com/max/3200/0*U8PVwgIOPwao0B3a) -As a [percentage](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.decileRelativeImpact®ion=enhanced_us&timePeriod=2024&baseline=2) of net income, the impact falls monotonically with income decile: +As a [percentage](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.decileRelativeImpact®ion=enhanced_us&timePeriod=2024&baseline=2) of net income, the impact falls monotonically with income decile: ![](https://cdn-images-1.medium.com/max/3200/0*FYfP1qgE6EF0ojl4) -Three in five Americans would see an [increase](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.intraDecileImpact®ion=enhanced_us&timePeriod=2024&baseline=2) in net income, while three percent–almost entirely in the top income decile–would see it fall. +Three in five Americans would see an [increase](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.intraDecileImpact®ion=enhanced_us&timePeriod=2024&baseline=2) in net income, while three percent–almost entirely in the top income decile–would see it fall. ![](https://cdn-images-1.medium.com/max/3200/0*zUezlVy2vxvAqKqt) -The Supplemental Poverty Measure would fall 12%, disproportionately among [children](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.povertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (31%), [women](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.genderPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (13%), and [Blacks and Hispanics](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.racialPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (14–15%). +The Supplemental Poverty Measure would fall 12%, disproportionately among [children](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.povertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (31%), [women](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.genderPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (13%), and [Blacks and Hispanics](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.racialPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (14–15%). ![](https://cdn-images-1.medium.com/max/3200/0*fPcXYZPC77uYeIZj) -[Deep poverty](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.deepPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) falls at a similar rate, while [income inequality](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.inequalityImpact®ion=enhanced_us&timePeriod=2024&baseline=2) falls 1.7% to 2.7%, depending on the measure. +[Deep poverty](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.deepPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) falls at a similar rate, while [income inequality](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.inequalityImpact®ion=enhanced_us&timePeriod=2024&baseline=2) falls 1.7% to 2.7%, depending on the measure. ## Conclusion @@ -138,13 +138,13 @@ This table compares PolicyEngine’s estimates in 2024 and 2025 to those of the **Table 1: Effect of Budget Proposals on Projected Deficits ($ billions)** -| Proposal | Treasury 2024 | Treasury 2025 | PolicyEngine 2024 | PolicyEngine 2025 | -| ---------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | -| **Restore the ARPA CTC expansion** | [5.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [209.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [110.9](https://policyengine.org/us/policy?reform=50634&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [111.9](https://policyengine.org/us/policy?reform=50634&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | -| **Restore the ARPA EITC expansion** | [0.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [15.3](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [33.5](https://policyengine.org/us/policy?reform=50974&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [35.2](https://policyengine.org/us/policy?reform=51171&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | -| **Raise the top marginal rate to 39.6%** | [-9.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=149) | [-75.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=149) | [-72.7](https://policyengine.org/us/policy?reform=51191&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [-76.9](https://policyengine.org/us/policy?reform=51191&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | -| **Increase the Medicare tax and NIIT** | [-8.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=154) | [-42.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=154) | [-31.8](https://policyengine.org/us/policy?reform=51192&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [-34.4](https://policyengine.org/us/policy?reform=51192&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | -| **Total** | **-12.5** | **106.9** | **[40.5](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2024&baseline=2)** | **[34.7](https://policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2025&baseline=2)** | +| Proposal | Treasury 2024 | Treasury 2025 | PolicyEngine 2024 | PolicyEngine 2025 | +| ---------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------ | +| **Restore the ARPA CTC expansion** | [5.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [209.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [110.9](https://legacy.policyengine.org/us/policy?reform=50634&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [111.9](https://legacy.policyengine.org/us/policy?reform=50634&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | +| **Restore the ARPA EITC expansion** | [0.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [15.3](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=150) | [33.5](https://legacy.policyengine.org/us/policy?reform=50974&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [35.2](https://legacy.policyengine.org/us/policy?reform=51171&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | +| **Raise the top marginal rate to 39.6%** | [-9.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=149) | [-75.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=149) | [-72.7](https://legacy.policyengine.org/us/policy?reform=51191&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [-76.9](https://legacy.policyengine.org/us/policy?reform=51191&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | +| **Increase the Medicare tax and NIIT** | [-8.4](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=154) | [-42.9](https://www.whitehouse.gov/wp-content/uploads/2024/03/budget_fy2025.pdf#page=154) | [-31.8](https://legacy.policyengine.org/us/policy?reform=51192&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) | [-34.4](https://legacy.policyengine.org/us/policy?reform=51192&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2) | +| **Total** | **-12.5** | **106.9** | **[40.5](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2024&baseline=2)** | **[34.7](https://legacy.policyengine.org/us/policy?reform=51189&focus=policyOutput.netIncome®ion=enhanced_us&timePeriod=2025&baseline=2)** | Due to timing considerations — we place the budgetary impact of tax credits in the tax year, while Treasury does so only when paid in advance, mirroring the delivery of most payments in the following year — the combined impact across years provides more comparable numbers than either year in isolation. Here, Treasury estimates $94.4 billion from 2024–25, while PolicyEngine estimates $75.2 billion. This does not fully account for timing considerations, since Treasury allocates part of our 2025 estimates to 2026. diff --git a/src/posts/articles/breaking-down-policy-impacts-by-wealth-decile.md b/src/posts/articles/breaking-down-policy-impacts-by-wealth-decile.md index 070cf28da..4380e9011 100644 --- a/src/posts/articles/breaking-down-policy-impacts-by-wealth-decile.md +++ b/src/posts/articles/breaking-down-policy-impacts-by-wealth-decile.md @@ -1,6 +1,6 @@ _A UK mansion. Credit: DALLE-2._ -Since our earliest days, we’ve broken the impact of policy reforms by income decile. For example, our [very first report](https://policyengine.org/uk/blog/2021-10-30-analysing-autumn-budget-universal-credit-reforms-with-policyengine) found that the 2021 Autumn Budget Universal Credit reforms would raise the net income of households in the third income decile by 1.6%, more than any other decile. +Since our earliest days, we’ve broken the impact of policy reforms by income decile. For example, our [very first report](https://legacy.policyengine.org/uk/blog/2021-10-30-analysing-autumn-budget-universal-credit-reforms-with-policyengine) found that the 2021 Autumn Budget Universal Credit reforms would raise the net income of households in the third income decile by 1.6%, more than any other decile. ![](https://cdn-images-1.medium.com/max/2432/0*YvFdT6fnE10-nRUR) @@ -42,7 +42,7 @@ PolicyEngine simulates policy reforms over a dataset of tens of thousands of hou Let’s explore a policy that affects income deciles differently than it affects wealth deciles: a land value tax. This policy taxes owners of land (including their residence) based on the value of the land, rather than the land and structure combined. -To see the impacts by decile for [this policy](https://policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=2320®ion=uk&timePeriod=2023&baseline=1), choose from the newly-added chart options in the bottom left. There are three different wealth breakdown charts: +To see the impacts by decile for [this policy](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=2320®ion=uk&timePeriod=2023&baseline=1), choose from the newly-added chart options in the bottom left. There are three different wealth breakdown charts: - _Absolute impact by wealth decile_: showing the absolute (£) average impacts by decile @@ -78,4 +78,4 @@ For this policy, the chart shows a clearly increasing impact across the deciles, ![](https://cdn-images-1.medium.com/max/2860/0*15I3IwS6oH2lB4l9) -Understanding the impact of policy reforms on wealth as well as income deciles provides a more comprehensive picture of distributional effects. By incorporating this new feature, PolicyEngine UK enables users to see how different policy ideas affect people given their wealth. We encourage users to [try out the new feature](https://policyengine.org/uk) and provide feedback or feature requests through [social media](http://twitter.com/thepolicyengine) or [email](mailto:contact@policyengine.org). +Understanding the impact of policy reforms on wealth as well as income deciles provides a more comprehensive picture of distributional effects. By incorporating this new feature, PolicyEngine UK enables users to see how different policy ideas affect people given their wealth. We encourage users to [try out the new feature](https://legacy.policyengine.org/uk) and provide feedback or feature requests through [social media](http://twitter.com/thepolicyengine) or [email](mailto:contact@policyengine.org). diff --git a/src/posts/articles/breaking-down-uk-poverty-impacts-by-sex.md b/src/posts/articles/breaking-down-uk-poverty-impacts-by-sex.md index 23e0ffa5b..ac145e837 100644 --- a/src/posts/articles/breaking-down-uk-poverty-impacts-by-sex.md +++ b/src/posts/articles/breaking-down-uk-poverty-impacts-by-sex.md @@ -2,19 +2,19 @@ Welcome to the latest blog post from PolicyEngine, where we share updates on our Since our inception, we’ve shown how customizable policy reforms would affect the poverty rate, overall and by age group. We model impacts under the government’s standard definition of poverty used in the Households Below Average Income publication (considering absolute poverty based on disposable income before housing costs). -We estimate that, under current law, 14.0% of the population has resources below their poverty threshold, and 2.4% has resources below half their poverty threshold (deep poverty). Women face higher poverty rates than men, and children face higher poverty rates than working-age adults, who face higher poverty rates than seniors. These poverty trends resemble those in the [HBAI report](https://www.gov.uk/government/statistics/households-below-average-income-for-financial-years-ending-1995-to-2021/households-below-average-income-an-analysis-of-the-income-distribution-fye-1995-to-fye-2021#main-stories), though the exact numbers differ as [we adjust survey data](https://policyengine.org/uk/blog/2022-03-07-how-machine-learning-tools-make-policyengine-more-accurate) and apply 2023 policy rules. Deep poverty does not vary much by sex, though seniors have much lower rates, due largely to Pension Credit. +We estimate that, under current law, 14.0% of the population has resources below their poverty threshold, and 2.4% has resources below half their poverty threshold (deep poverty). Women face higher poverty rates than men, and children face higher poverty rates than working-age adults, who face higher poverty rates than seniors. These poverty trends resemble those in the [HBAI report](https://www.gov.uk/government/statistics/households-below-average-income-for-financial-years-ending-1995-to-2021/households-below-average-income-an-analysis-of-the-income-distribution-fye-1995-to-fye-2021#main-stories), though the exact numbers differ as [we adjust survey data](https://legacy.policyengine.org/uk/blog/2022-03-07-how-machine-learning-tools-make-policyengine-more-accurate) and apply 2023 policy rules. Deep poverty does not vary much by sex, though seniors have much lower rates, due largely to Pension Credit. ![](https://cdn-images-1.medium.com/max/5236/1*UR6jZxb9w3nVy02YIkRO_A.png) Let’s consider an example to illustrate the power of our updated tool. Suppose we want to estimate the poverty impact of the Child Benefit, an unconditional cash transfer to parents of children (or young adults in further education). With PolicyEngine, anyone can compare today’s poverty rate to a scenario without Child Benefit — overall, by age group, and now by sex. -We estimate that the Child Benefit reduces poverty by 9.3% and deep poverty by 18.5%. Our pre-existing charts show that Child Benefit disproportionately benefits children, [reducing child poverty by 15.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846) and [deep child poverty by 35.6%](https://policyengine.org/uk/policy?focus=policyOutput.deepPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). +We estimate that the Child Benefit reduces poverty by 9.3% and deep poverty by 18.5%. Our pre-existing charts show that Child Benefit disproportionately benefits children, [reducing child poverty by 15.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846) and [deep child poverty by 35.6%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.deepPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). -Our new charts show that the [Child Benefit lowers poverty by 9.2% for men and 9.4% for women](https://policyengine.org/uk/policy?focus=policyOutput.genderPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). +Our new charts show that the [Child Benefit lowers poverty by 9.2% for men and 9.4% for women](https://legacy.policyengine.org/uk/policy?focus=policyOutput.genderPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). ![](https://cdn-images-1.medium.com/max/2000/0*dTF1Zl3haJDrPs5n) -We also find that the [Child Benefit lowers deep poverty by 18% for men and 19% for women](https://policyengine.org/uk/policy?focus=policyOutput.genderDeepPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). +We also find that the [Child Benefit lowers deep poverty by 18% for men and 19% for women](https://legacy.policyengine.org/uk/policy?focus=policyOutput.genderDeepPovertyImpact&reform=1®ion=uk&timePeriod=2023&baseline=3846). ![](https://cdn-images-1.medium.com/max/2000/0*MWOuUkGGwbL_3_Vz) diff --git a/src/posts/articles/breaking-down-us-poverty-impacts-by-sex.md b/src/posts/articles/breaking-down-us-poverty-impacts-by-sex.md index 3acd18c44..0f8a0cb83 100644 --- a/src/posts/articles/breaking-down-us-poverty-impacts-by-sex.md +++ b/src/posts/articles/breaking-down-us-poverty-impacts-by-sex.md @@ -8,13 +8,13 @@ We estimate that, under current law, 9.6% of the population has resources below Let’s consider an example to illustrate the power of our updated tool. Suppose we want to estimate the poverty impact of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides nutrition assistance to low-income pregnant women, new mothers, and young children. With PolicyEngine, anyone can compare today’s poverty rate to a scenario without WIC — overall, by age group, and now by sex. -We estimate that WIC reduces poverty by 0.8% and deep poverty by 2.2%. Our pre-existing charts show that WIC disproportionately benefits children, [reducing child poverty by 2.6%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454) and [deep child poverty by 8.1%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). +We estimate that WIC reduces poverty by 0.8% and deep poverty by 2.2%. Our pre-existing charts show that WIC disproportionately benefits children, [reducing child poverty by 2.6%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454) and [deep child poverty by 8.1%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). -Our new charts show that [WIC lowers poverty by 0.7% for men and 0.9% for women](https://policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). +Our new charts show that [WIC lowers poverty by 0.7% for men and 0.9% for women](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). ![](https://cdn-images-1.medium.com/max/3200/0*BQvi2FCn2a6SXUho) -We also find that [WIC lowers deep poverty by 1.9% for men and 2.4% for women](https://policyengine.org/us/policy?focus=policyOutput.genderDeepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). +We also find that [WIC lowers deep poverty by 1.9% for men and 2.4% for women](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderDeepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6454). ![](https://cdn-images-1.medium.com/max/3200/0*o2Wxc1THrDYKjkxs) diff --git a/src/posts/articles/building-the-roots-of-policyengine-nigeria.md b/src/posts/articles/building-the-roots-of-policyengine-nigeria.md index 03d1bcc14..74843bf11 100644 --- a/src/posts/articles/building-the-roots-of-policyengine-nigeria.md +++ b/src/posts/articles/building-the-roots-of-policyengine-nigeria.md @@ -1,12 +1,12 @@ -In February, at Code for Africa’s [Hacky New Year](https://democracylab.org/events/hackynewyear2023) event, our team tackled the task of developing a prototype for [PolicyEngine Nigeria](http://policyengine.org/ng). +In February, at Code for Africa’s [Hacky New Year](https://democracylab.org/events/hackynewyear2023) event, our team tackled the task of developing a prototype for [PolicyEngine Nigeria](http://legacy.policyengine.org/ng). -In the US, UK, and Canada, users can visit [policyengine.org](http://policyengine.org/) and input their household details or policy reforms to calculate the effects of taxes and benefits using the rules applicable to their jurisdiction. Thanks to our global, open-source code infrastructure and our modern, standardised framework, expanding functionality for countries like Nigeria primarily involves understanding and implementing legislation without reworking the user interface. +In the US, UK, and Canada, users can visit [policyengine.org](http://legacy.policyengine.org/) and input their household details or policy reforms to calculate the effects of taxes and benefits using the rules applicable to their jurisdiction. Thanks to our global, open-source code infrastructure and our modern, standardised framework, expanding functionality for countries like Nigeria primarily involves understanding and implementing legislation without reworking the user interface. In this blog post, we provide a step-by-step tutorial on using the app and showcase its features. ## Walkthrough -First, to see the impact of tax-benefit policy on a household, choose “Calculate my household income” from the homepage ([policyengine.org/ng](http://policyengine.org/ng)) to start the questionnaire. +First, to see the impact of tax-benefit policy on a household, choose “Calculate my household income” from the homepage ([policyengine.org/ng](http://legacy.policyengine.org/ng)) to start the questionnaire. Next, provide information about your marital status, number of children, their ages, and employment incomes. @@ -18,15 +18,15 @@ After entering your data, the app shows a breakdown of your disposable income, i - Benefits: Government payments or subsidies received, like child benefits or tax credits. PolicyEngine Nigeria does not currently model any benefits. -Consider an [individual with ₦1,000,000 earnings](https://policyengine.org/ng/household?focus=householdOutput.netIncome&household=30071) ($2,170 USD, roughly Nigeria’s GDP per capita). We calculate that they would owe ₦54,000 in tax. +Consider an [individual with ₦1,000,000 earnings](https://legacy.policyengine.org/ng/household?focus=householdOutput.netIncome&household=30071) ($2,170 USD, roughly Nigeria’s GDP per capita). We calculate that they would owe ₦54,000 in tax. ![](https://cdn-images-1.medium.com/max/2880/1*5eZFVJ3FzpYAs1tm1plkzQ.png) -You can also view how your household’s income would change with [varying income levels](https://policyengine.org/ng/household?focus=householdOutput.earnings&household=30071). Select “Varying your earnings” in the bottom left to display a chart showing how different outcomes (e.g., net income or tax) change with income. +You can also view how your household’s income would change with [varying income levels](https://legacy.policyengine.org/ng/household?focus=householdOutput.earnings&household=30071). Select “Varying your earnings” in the bottom left to display a chart showing how different outcomes (e.g., net income or tax) change with income. ![](https://cdn-images-1.medium.com/max/2952/1*vVrsRE_X7Av6b8WhJ3PVxg.png) -[Marginal tax rates](https://policyengine.org/ng/household?focus=householdOutput.mtr&household=30071), or the percentage of each marginal income increase taken by the government through taxes or withdrawn benefits, are often important to households. Select this option in the bottom left to see a chart displaying both your current marginal tax rate and how it varies with income. Nigeria’s tax system applies mostly monotonically increasing marginal tax rates, except for a spike around ₦30,000 due to a tax-free allowance. +[Marginal tax rates](https://legacy.policyengine.org/ng/household?focus=householdOutput.mtr&household=30071), or the percentage of each marginal income increase taken by the government through taxes or withdrawn benefits, are often important to households. Select this option in the bottom left to see a chart displaying both your current marginal tax rate and how it varies with income. Nigeria’s tax system applies mostly monotonically increasing marginal tax rates, except for a spike around ₦30,000 due to a tax-free allowance. ![](https://cdn-images-1.medium.com/max/2928/1*yFs72UiWOqai3SnxdO5noQ.png) @@ -38,16 +38,16 @@ Choose “Create a policy reform” to enter the policy view of the app, where y ![](https://cdn-images-1.medium.com/max/2868/1*KhRcSC7c1h-Hwpa-9EhrQw.png) -Let’s test a sample reform: go to Tax, choose the Consolidated relief allowance (similar to the standard deduction in the US or the personal allowance in the UK), and [set this parameter to zero](https://policyengine.org/ng/policy?focus=gov.tax.consolidated_relief_allowance.flat&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868). +Let’s test a sample reform: go to Tax, choose the Consolidated relief allowance (similar to the standard deduction in the US or the personal allowance in the UK), and [set this parameter to zero](https://legacy.policyengine.org/ng/policy?focus=gov.tax.consolidated_relief_allowance.flat&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868). ![](https://cdn-images-1.medium.com/max/2920/1*upfrLm5jqoGzeFdf39cjEw.png) -Now click “Calculate my household impact.” You will return to the household page, where you can observe the [₦30,000 tax increase](https://policyengine.org/ng/household?focus=householdOutput.netIncome&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) for the household we initially created. Go back to the [earnings variation](https://policyengine.org/ng/household?focus=householdOutput.earnings&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) or [marginal tax rate](https://policyengine.org/ng/household?focus=householdOutput.mtr&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) charts to see how the policy reform’s impact changes with different income levels. +Now click “Calculate my household impact.” You will return to the household page, where you can observe the [₦30,000 tax increase](https://legacy.policyengine.org/ng/household?focus=householdOutput.netIncome&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) for the household we initially created. Go back to the [earnings variation](https://legacy.policyengine.org/ng/household?focus=householdOutput.earnings&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) or [marginal tax rate](https://legacy.policyengine.org/ng/household?focus=householdOutput.mtr&household=30071®ion=ng&timePeriod=2023&baseline=4&reform=10868) charts to see how the policy reform’s impact changes with different income levels. ![](https://cdn-images-1.medium.com/max/2884/1*bBgewQXh0sTsi-dkUQuzkg.png) ## Give it a try -You can follow the same examples at [policyengine.org/ng](http://policyengine.org/ng) or experiment with your own household or reform ideas. We’re excited to expand PolicyEngine to more countries and compute public policy impact worldwide. If you or your organisation have questions or collaboration suggestions, please don’t hesitate to contact us. +You can follow the same examples at [policyengine.org/ng](http://legacy.policyengine.org/ng) or experiment with your own household or reform ideas. We’re excited to expand PolicyEngine to more countries and compute public policy impact worldwide. If you or your organisation have questions or collaboration suggestions, please don’t hesitate to contact us. Thanks to Sakina Salem for research assistance during the hackathon. diff --git a/src/posts/articles/cgt-autumn-budget.md b/src/posts/articles/cgt-autumn-budget.md index 0bbe4efd1..5d09b82ab 100644 --- a/src/posts/articles/cgt-autumn-budget.md +++ b/src/posts/articles/cgt-autumn-budget.md @@ -6,9 +6,9 @@ When accounting for behavioural responses, we project that these changes will ra We project the CGT reforms will raise £6.4 billion from 2025 to 2029\. -| Fiscal Year | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | Total | -| :------------ | :------ | :----------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :---- | -| Revenue (£bn) | 0.0 | [1.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2025&baseline=1) | [1.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2026&baseline=1) | [1.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2027&baseline=1) | [1.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2028&baseline=1) | [1.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2029&baseline=1) | 6.4 | +| Fiscal Year | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | Total | +| :------------ | :------ | :------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------ | :---- | +| Revenue (£bn) | 0.0 | [1.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2025&baseline=1) | [1.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2026&baseline=1) | [1.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2027&baseline=1) | [1.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2028&baseline=1) | [1.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69739®ion=uk&timePeriod=2029&baseline=1) | 6.4 | These estimates are 29% less than HMT and 26% less than the OBR. These variations may stem from different assumptions about behavioural responses. In our model, we assume individuals will adjust their capital gains realisations with an elasticity of \-0.7 with respect to the marginal tax rate; neither HMT nor OBR specify their assumptions on this front. @@ -18,18 +18,18 @@ These estimates are 29% less than HMT and 26% less than the OBR. These variation | HM Treasury | 0.1 | 1.4 | 1.4 | 1.4 | 2.2 | 2.5 | 9.0 | | OBR | 0.1 | 1.4 | 1.3 | 1.3 | 2.1 | 2.4 | 8.6 | -Assuming [no behavioural change](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69732®ion=uk&timePeriod=2025&baseline=1), we project the change to generate £22.2 billion from 2025 to 2029\. While the OBR also provides estimates it describes as static, those account for changes in realisation behaviour, making them incomparable to our static results. +Assuming [no behavioural change](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69732®ion=uk&timePeriod=2025&baseline=1), we project the change to generate £22.2 billion from 2025 to 2029\. While the OBR also provides estimates it describes as static, those account for changes in realisation behaviour, making them incomparable to our static results. ## Distributional impact The CGT reforms affect 1.2% of the population, with impacts limited to the highest income decile. Within the top 10%, 5% see income losses above 5%, another 5% face losses under 5%, while 90% experience no change. The policy has no impact on income levels across the bottom nine deciles. -Our [distributional analysis](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=69732®ion=uk&timePeriod=2025&baseline=1) shows no change in poverty measures, while the Gini index falls by 0.4%. Across most of the income distribution (the bottom 90% of households), incomes remain unchanged. +Our [distributional analysis](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=69732®ion=uk&timePeriod=2025&baseline=1) shows no change in poverty measures, while the Gini index falls by 0.4%. Across most of the income distribution (the bottom 90% of households), incomes remain unchanged. ![](/images/posts/cgt-autumn-budget-pic/cgt-win-loser.png) Read more of PolicyEngine’s Autumn Budget 2024 coverage: -- [Employer National Insurance reforms](https://policyengine.org/uk/research/autumn-budget-24-employer-ni) -- [Private school VAT changes](https://policyengine.org/uk/research/vat-school-comparison) -- [Fuel Duty freeze](https://policyengine.org/uk/research/autumn-budget-24-fuel-duty) +- [Employer National Insurance reforms](https://legacy.policyengine.org/uk/research/autumn-budget-24-employer-ni) +- [Private school VAT changes](https://legacy.policyengine.org/uk/research/vat-school-comparison) +- [Fuel Duty freeze](https://legacy.policyengine.org/uk/research/autumn-budget-24-fuel-duty) diff --git a/src/posts/articles/charitable-contributions.md b/src/posts/articles/charitable-contributions.md index cb19aa8f7..50e9539ef 100644 --- a/src/posts/articles/charitable-contributions.md +++ b/src/posts/articles/charitable-contributions.md @@ -8,7 +8,7 @@ Federal taxes comprise 88% of this impact. ![](https://cdn-images-1.medium.com/max/3896/1*OwWwU6RgotGi4g6pXsIINA.png) -To estimate how charitable giving would affect your own household, visit [policyengine.org](https://policyengine.org/). +To estimate how charitable giving would affect your own household, visit [policyengine.org](https://legacy.policyengine.org/). If you’d like to support our work making free, open source tax and benefit software, you can [make a tax-deductible gift to the PSL Foundation](https://opencollective.com/psl), our fiscal sponsor. Please let us know at [hello@policyengine.org](mailto:hello@policyengine.org) so we can direct your gift to our operations. diff --git a/src/posts/articles/citizens-economic-council.md b/src/posts/articles/citizens-economic-council.md index 41e7c63f1..64bc9f2e6 100644 --- a/src/posts/articles/citizens-economic-council.md +++ b/src/posts/articles/citizens-economic-council.md @@ -17,4 +17,4 @@ For the project, PolicyEngine also created an interactive, simplified tool for p You can read the full report by [King’s College London](https://citizensecon.org.uk/project-report) here. - + diff --git a/src/posts/articles/conservative-2024-manifesto.md b/src/posts/articles/conservative-2024-manifesto.md index 34fa517bc..b67fd81c9 100644 --- a/src/posts/articles/conservative-2024-manifesto.md +++ b/src/posts/articles/conservative-2024-manifesto.md @@ -1,4 +1,4 @@ -_Distributional impact of the Conservative 2024 Manifesto. See the full impact score [here](https://policyengine.org/uk/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=58041®ion=uk&timePeriod=2029&baseline=1)._ +_Distributional impact of the Conservative 2024 Manifesto. See the full impact score [here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=58041®ion=uk&timePeriod=2029&baseline=1)._ ## Key findings @@ -36,12 +36,12 @@ The Conservatives propose a net spending decrease of £44bn through 2029. This w The Conservatives also propose spending increases to national defence, the NHS, and on some programs we classify as education-related (National Service and apprenticeship subsidies). Because none of these changes impact benefits modelled by PolicyEngine, we assume the Conservatives' costings and use the ONS’ estimates of the distributional impact of public service spending categories. -| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | -| -------------------------------------- | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -| Increase education spending £2.4bn | 2.4 | [2.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58028®ion=uk&timePeriod=2029&baseline=1) | -| Increase NHS funding £2.3bn | 2.3 | [2.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58059®ion=uk&timePeriod=2029&baseline=1) | -| Decrease other public spending £48.6bn | -48.6 | [-48.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58064®ion=uk&timePeriod=2029&baseline=1) | -| Total spending changes | -43.9 | [-43.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58038®ion=uk&timePeriod=2029&baseline=1) | +| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | +| -------------------------------------- | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | +| Increase education spending £2.4bn | 2.4 | [2.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58028®ion=uk&timePeriod=2029&baseline=1) | +| Increase NHS funding £2.3bn | 2.3 | [2.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58059®ion=uk&timePeriod=2029&baseline=1) | +| Decrease other public spending £48.6bn | -48.6 | [-48.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58064®ion=uk&timePeriod=2029&baseline=1) | +| Total spending changes | -43.9 | [-43.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58038®ion=uk&timePeriod=2029&baseline=1) | ## Taxes @@ -59,15 +59,15 @@ We estimate that the Conservatives’ tax policy changes would have a slightly l We also find roughly double the budgetary impact of abolishing the Stamp Duty Land Tax (SDLT) for first-time homebuyers, at a cost of £4.4bn, versus the Conservatives’ estimate of £2.3bn. -| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | -| --------------------------------------------------- | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -| Lowering the employee NIC base rate step-wise to 6% | -39.4 | [-41.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2029&baseline=1) | -| Abolishing self-employed NICs | -6.8 | [-6.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2029&baseline=1) | -| Triple Lock Plus | -8.8 | [-7.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2029&baseline=1) | -| Reforming the HICBC single-earner policy | -4.5 | [-10.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2029&baseline=1&reform=57905) | -| Abolish stamp duty for first-time homebuyers | -2.3 | [-4.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2029&baseline=1) | -| Taxes incident on capital | 20.0 | [20.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58131®ion=uk&timePeriod=2029&baseline=1) | -| Total tax changes | -41.9 | [-49.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) | +| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | +| --------------------------------------------------- | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | +| Lowering the employee NIC base rate step-wise to 6% | -39.4 | [-41.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2029&baseline=1) | +| Abolishing self-employed NICs | -6.8 | [-6.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2029&baseline=1) | +| Triple Lock Plus | -8.8 | [-7.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2029&baseline=1) | +| Reforming the HICBC single-earner policy | -4.5 | [-10.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2029&baseline=1&reform=57905) | +| Abolish stamp duty for first-time homebuyers | -2.3 | [-4.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2029&baseline=1) | +| Taxes incident on capital | 20.0 | [20.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58131®ion=uk&timePeriod=2029&baseline=1) | +| Total tax changes | -41.9 | [-49.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) | ## Overall @@ -75,11 +75,11 @@ The Conservative manifesto, according to their costings, balances £41.9bn of ta In the chart below, negative numbers refer to increased government expenditures, while positive numbers refer to budgetary savings. -| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | -| ---------------------- | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -| Total spending changes | -43.9 | [-43.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58038®ion=uk&timePeriod=2029&baseline=1) | -| Total tax changes | 41.9 | [49.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) | -| Overall net change | 2.0 | [-5.8](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58041®ion=uk&timePeriod=2029&baseline=1) | +| **Provision** | **Conservatives (£bn)** | **PolicyEngine (£bn)** | +| ---------------------- | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | +| Total spending changes | -43.9 | [-43.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58038®ion=uk&timePeriod=2029&baseline=1) | +| Total tax changes | 41.9 | [49.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) | +| Overall net change | 2.0 | [-5.8](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58041®ion=uk&timePeriod=2029&baseline=1) | ## Economic impact @@ -89,15 +89,15 @@ PolicyEngine estimates that the complete Conservative manifesto would, in 2029: - Raise poverty by 6% - Increase net income for 46% of the population, while decreasing it for 52% -We estimate the Conservatives’ manifesto to be [mostly regressive along income lines](https://policyengine.org/uk/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=58041®ion=uk&timePeriod=2029&baseline=1), with the lowest decile experiencing a 6.4% decrease in disposable income, while those in the highest income bracket would see a 0.3% increase, and those in bracket 9 would experience the greatest relative increase of 1.6%. +We estimate the Conservatives’ manifesto to be [mostly regressive along income lines](https://legacy.policyengine.org/uk/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=58041®ion=uk&timePeriod=2029&baseline=1), with the lowest decile experiencing a 6.4% decrease in disposable income, while those in the highest income bracket would see a 0.3% increase, and those in bracket 9 would experience the greatest relative increase of 1.6%. ![Impact by income decile](/images/posts/conservative-2024-manifesto/decile_impact.png "image_tooltip") -We also conclude that people in the lowest income deciles are more likely to experience the negative impacts of the proposal, with over 95% of people in the first income decile experiencing a decrease in net income. The majority of people in income deciles above the fifth start to experience net income increases with [overall 46% of the population benefiting](https://policyengine.org/uk/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=58041®ion=uk&timePeriod=2029&baseline=1), in net income terms, and 52% of people experience net income decreases. +We also conclude that people in the lowest income deciles are more likely to experience the negative impacts of the proposal, with over 95% of people in the first income decile experiencing a decrease in net income. The majority of people in income deciles above the fifth start to experience net income increases with [overall 46% of the population benefiting](https://legacy.policyengine.org/uk/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=58041®ion=uk&timePeriod=2029&baseline=1), in net income terms, and 52% of people experience net income decreases. ![Impacts within income deciles](/images/posts/conservative-2024-manifesto/intra_decile_impact.png "image_tooltip") -Regarding poverty rates, PolicyEngine estimates that the proposed policy changes would [increase the overall poverty rate 5.8%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=58041®ion=uk&timePeriod=2029&baseline=1). The percentage of seniors in poverty would increase by 19% to a total of 13.4%, while child and working-age adult poverty rates would increase by 3.5% and 4.6% respectively. +Regarding poverty rates, PolicyEngine estimates that the proposed policy changes would [increase the overall poverty rate 5.8%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=58041®ion=uk&timePeriod=2029&baseline=1). The percentage of seniors in poverty would increase by 19% to a total of 13.4%, while child and working-age adult poverty rates would increase by 3.5% and 4.6% respectively. ![Poverty rate impacts](/images/posts/conservative-2024-manifesto/poverty_impact.png "image_tooltip") @@ -116,13 +116,13 @@ We estimate the following per-year scores for each of the tax provisions of the PolicyEngine estimates of Conservative manifesto tax cuts. | **Provision**| **2025 (£bn)** | **2026 (£bn)**|**2027 (£bn)**|**2028 (£bn)**|**2029 (£bn)**|**Total**| | ------------ | -------------- | -------------- | ----------- | ----------- | ----------- | ------- | -| Halve employee NICs | [5.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2025&baseline=1) | [5.1](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2026&baseline=1) |[10.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2027&baseline=1) |[10.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2028&baseline=1) | [10.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2029&baseline=1) | 41.3 | -| Abolish self-employed NICs | [0.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2025&baseline=1) |[0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2026&baseline=1) |[1.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2027&baseline=1) |[1.8](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2028&baseline=1) |[2.1](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2029&baseline=1) | 6.5 | -| Triple Lock Plus | [0.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2025&baseline=1) |[1.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2026&baseline=1) |[1.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2027&baseline=1) |[1.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2028&baseline=1) |[2.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2029&baseline=1) | 7.3 | -| Reform HICBC single-earner provisions | [0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1&reform=57905) |[2.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2026&baseline=1&reform=57905) |[2.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2027&baseline=1&reform=57905) |[2.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2028&baseline=1&reform=57905) |[2.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2029&baseline=1&reform=57905) |10.2 | -| Abolish stamp duty for first-time buyers | [0.8](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2025&baseline=1) |[0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2026&baseline=1) |[0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2027&baseline=1) |[0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2028&baseline=1) |[0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2029&baseline=1) |4.4 | -| Anti-tax avoidance investment | [-2.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2025&baseline=1) |[-3.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2026&baseline=1) |[-4.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2027&baseline=1) |[-5.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2028&baseline=1) |[-6.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2029&baseline=1) | -20.0 | -| Total | [4.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2025&baseline=1) |[7.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2026&baseline=1) |[12.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2027&baseline=1) |[12.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2028&baseline=1) |[12.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) |49.7| +| Halve employee NICs | [5.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2025&baseline=1) | [5.1](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2026&baseline=1) |[10.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2027&baseline=1) |[10.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2028&baseline=1) | [10.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57887®ion=uk&timePeriod=2029&baseline=1) | 41.3 | +| Abolish self-employed NICs | [0.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2025&baseline=1) |[0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2026&baseline=1) |[1.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2027&baseline=1) |[1.8](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2028&baseline=1) |[2.1](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57894®ion=uk&timePeriod=2029&baseline=1) | 6.5 | +| Triple Lock Plus | [0.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2025&baseline=1) |[1.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2026&baseline=1) |[1.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2027&baseline=1) |[1.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2028&baseline=1) |[2.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=56385®ion=uk&timePeriod=2029&baseline=1) | 7.3 | +| Reform HICBC single-earner provisions | [0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1&reform=57905) |[2.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2026&baseline=1&reform=57905) |[2.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2027&baseline=1&reform=57905) |[2.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2028&baseline=1&reform=57905) |[2.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2029&baseline=1&reform=57905) |10.2 | +| Abolish stamp duty for first-time buyers | [0.8](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2025&baseline=1) |[0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2026&baseline=1) |[0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2027&baseline=1) |[0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2028&baseline=1) |[0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57915®ion=uk&timePeriod=2029&baseline=1) |4.4 | +| Anti-tax avoidance investment | [-2.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2025&baseline=1) |[-3.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2026&baseline=1) |[-4.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2027&baseline=1) |[-5.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2028&baseline=1) |[-6.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58122®ion=uk&timePeriod=2029&baseline=1) | -20.0 | +| Total | [4.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2025&baseline=1) |[7.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2026&baseline=1) |[12.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2027&baseline=1) |[12.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2028&baseline=1) |[12.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58015®ion=uk&timePeriod=2029&baseline=1) |49.7| These compare to the Conservatives’ estimates below. | **Provision**| **2025 (£bn)** | **2026 (£bn)**|**2027 (£bn)**|**2028 (£bn)**|**2029 (£bn)**|**Total**| @@ -141,4 +141,4 @@ Revenue impact, billions of pounds | **Budgetary impact (£bn)**| **2025** | **2026**|**2027**|**2028**|**2029**|**Total**| | ------------ | -------------- | -------------- | ----------- | ----------- | ----------- | ------- | | Conservatives | -1.0 | 2.0 | 0.0 | 0.8 | 0.3 | 2.1 | -| PolicyEngine | [-1.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2025&baseline=1) | [0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2026&baseline=1) | [-2.1](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2027&baseline=1) | [-1.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2028&baseline=1) | [-0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2029&baseline=1) | -5.8 | +| PolicyEngine | [-1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2025&baseline=1) | [0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2026&baseline=1) | [-2.1](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2027&baseline=1) | [-1.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2028&baseline=1) | [-0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=58040®ion=uk&timePeriod=2029&baseline=1) | -5.8 | diff --git a/src/posts/articles/dc-financial-support-for-families-with-children.md b/src/posts/articles/dc-financial-support-for-families-with-children.md index 61254525b..00f5c3fc5 100644 --- a/src/posts/articles/dc-financial-support-for-families-with-children.md +++ b/src/posts/articles/dc-financial-support-for-families-with-children.md @@ -1,6 +1,6 @@ _We thank the [Mother’s Outreach Network](https://mothersoutreachnetwork.org/) for supporting this research. PolicyEngine conducts all research independently of our funders._ -[We recently examined the District Child Tax Credit (DCTC)](https://policyengine.org/us/blog/district-child-tax-credit), a proposed bill from DC Councilmember Zachary Parker. Today, we will examine another proposal from Councilmember Parker called the [Financial Support for Families with Children Amendment Act (FSFC)](https://www.dropbox.com/s/14865nw8firxgo2/CM%20Parker%20Basic%20Income%20Bill%203.21.23_FINAL.pdf?dl=0) and its potential economic impact on Washington, D.C. residents. +[We recently examined the District Child Tax Credit (DCTC)](https://legacy.policyengine.org/us/blog/district-child-tax-credit), a proposed bill from DC Councilmember Zachary Parker. Today, we will examine another proposal from Councilmember Parker called the [Financial Support for Families with Children Amendment Act (FSFC)](https://www.dropbox.com/s/14865nw8firxgo2/CM%20Parker%20Basic%20Income%20Bill%203.21.23_FINAL.pdf?dl=0) and its potential economic impact on Washington, D.C. residents. ## The Financial Support for Families with Children Amendment Act @@ -12,7 +12,7 @@ Consider a married household with two children, ages 10 and 16, and an adjusted For a joint filer with two children, the credit fully phases out if their income reaches $40,000 ($20,000 phase-out threshold + $2,000 credit / 10% phase-out rate = $20,000 + $20,000). -**To see how the FSFC would affect your own household, [enter your information into our personalized calculator](https://policyengine.org/us/household?focus=intro&reform=8007®ion=us&timePeriod=2023&baseline=2).** +**To see how the FSFC would affect your own household, [enter your information into our personalized calculator](https://legacy.policyengine.org/us/household?focus=intro&reform=8007®ion=us&timePeriod=2023&baseline=2).** _Note that our calculator assumes that your household files taxes together, not married filing separately on the same return._ @@ -26,19 +26,19 @@ A filer’s FSFC depends on their marital status, number of children, and income We estimate DC-wide impacts by pairing our 2023 rules engine with the 2021 [Current Population Survey March Supplement](https://www.census.gov/data/datasets/time-series/demo/cps/cps-asec.html) (CPS), which contains 1,135 DC households. As we have not yet modeled DC income taxes, we also assume that filers apply the same filing status as on their federal return, rather than married couples filing separately on the same return, as DC allows. -PolicyEngine estimates that the FSFA would [cost about $27 million](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=8007®ion=dc&timePeriod=2023&baseline=2) in 2023. This equates to [$84 per household](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), or [0.1% of net income](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), disproportionately to households in the second income decile (households in the bottom income decile have fewer children). Overall, the policy would [reduce income inequality by 0.0–0.3%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), depending on the metric. +PolicyEngine estimates that the FSFA would [cost about $27 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=8007®ion=dc&timePeriod=2023&baseline=2) in 2023. This equates to [$84 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), or [0.1% of net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), disproportionately to households in the second income decile (households in the bottom income decile have fewer children). Overall, the policy would [reduce income inequality by 0.0–0.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), depending on the metric. ![](https://cdn-images-1.medium.com/max/2828/0*Zv6RqNmcgMkrlHWa) -[The FSFC would benefit one in ten Washingtonians](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), and one in twelve would see their net income rise by at least five percent. +[The FSFC would benefit one in ten Washingtonians](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), and one in twelve would see their net income rise by at least five percent. ![](https://cdn-images-1.medium.com/max/2820/0*Z3wEluteyWjEyx3R) -14.0% of Washingtonians have resources below their [Supplemental Poverty Measure](https://www.census.gov/topics/income-poverty/supplemental-poverty-measure.html) threshold. We estimate that the FSFC would affect poverty rates [identically to the DCTC](https://policyengine.org/us/blog/district-child-tax-credit): lowering the rate 1.3% to 13.8%, child poverty by 5.2%, larger poverty reductions among men, and no deep poverty impact. In reality, the policies would have different effects, but given the small sample sizes, similar surveyed households fall near the poverty line and would be pushed above it by both the DCTC and FSFC. +14.0% of Washingtonians have resources below their [Supplemental Poverty Measure](https://www.census.gov/topics/income-poverty/supplemental-poverty-measure.html) threshold. We estimate that the FSFC would affect poverty rates [identically to the DCTC](https://legacy.policyengine.org/us/blog/district-child-tax-credit): lowering the rate 1.3% to 13.8%, child poverty by 5.2%, larger poverty reductions among men, and no deep poverty impact. In reality, the policies would have different effects, but given the small sample sizes, similar surveyed households fall near the poverty line and would be pushed above it by both the DCTC and FSFC. ![](https://cdn-images-1.medium.com/max/2848/0*JkBfpEumAbVkTxpM) -According to our data, the FSFC’s poverty reduction would be [entirely felt by Black non-Hispanic Washingtonians](https://policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), reducing their poverty rate from 22.9% to 22.5%. +According to our data, the FSFC’s poverty reduction would be [entirely felt by Black non-Hispanic Washingtonians](https://legacy.policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=8007®ion=dc&timePeriod=2023&baseline=2), reducing their poverty rate from 22.9% to 22.5%. ![](https://cdn-images-1.medium.com/max/2844/0*CDnH3pVVtjeVdm8o) @@ -56,7 +56,7 @@ FSFC provides larger benefits to a lower-income population and phases out faster ![](https://cdn-images-1.medium.com/max/2784/1*cLrx9sthXcVS5AsNduRdIA.png) -PolicyEngine estimates that FSFC has identical impacts to the DCTC on the budget and poverty rates, though [more comprehensive data](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) would likely identify differences. FSFC would reduce inequality about 50% more by targeting transfers to a population about half the size of the DCTC. +PolicyEngine estimates that FSFC has identical impacts to the DCTC on the budget and poverty rates, though [more comprehensive data](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) would likely identify differences. FSFC would reduce inequality about 50% more by targeting transfers to a population about half the size of the DCTC. ![](https://cdn-images-1.medium.com/max/2776/1*7mA6fraWhMVGC2I2c_-Srg.png) @@ -66,7 +66,7 @@ Like the DCTC, the FSFC would be available to families that don’t have to othe The DC Department of Health and Human Services administers DC’s Temporary Assistance for Needy Families (TANF) program, which targets similarly low-income families with children. The federal Department of Health and Human Services reports that [4,288 families](https://www.acf.hhs.gov/sites/default/files/documents/ofa/fy2022_tanf_caseload.pdf) participated in DC’s TANF program in an average month in 2022. -DC residents can claim the Homeowner and Renter Property Tax Credit (HRPTC) on the [Schedule H](https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2020_Schedule_H_0.pdf) tax form. Residents that pay rent or property tax can claim the HRPTC, unless they live in one of the District’s roughly [10,000 public housing units](https://www.dchousing.org/wordpress/about-us/dcha-by-the-numbers/), or exceed the income limits. Roughly [250,000 individuals](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=9008®ion=dc&timePeriod=2023&baseline=2) are in tax filing units with income below the $57,600 main HRPTC income limit (higher-income filers can qualify if they are age 70 or above). +DC residents can claim the Homeowner and Renter Property Tax Credit (HRPTC) on the [Schedule H](https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2020_Schedule_H_0.pdf) tax form. Residents that pay rent or property tax can claim the HRPTC, unless they live in one of the District’s roughly [10,000 public housing units](https://www.dchousing.org/wordpress/about-us/dcha-by-the-numbers/), or exceed the income limits. Roughly [250,000 individuals](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=9008®ion=dc&timePeriod=2023&baseline=2) are in tax filing units with income below the $57,600 main HRPTC income limit (higher-income filers can qualify if they are age 70 or above). FSFC, meanwhile, would be available to about 70,000 individuals. diff --git a/src/posts/articles/district-child-tax-credit.md b/src/posts/articles/district-child-tax-credit.md index 9ab9240f5..b5fe3b651 100644 --- a/src/posts/articles/district-child-tax-credit.md +++ b/src/posts/articles/district-child-tax-credit.md @@ -16,7 +16,7 @@ Consider a household with two children, ages 10 and 16, and an adjusted gross in For a single filer with two children, the credit fully phases out if their income reaches $150,000 ($100,000 phase-out threshold + $1,000 credit / 2% phase-out rate = $100,000 + $50,000). -**To see how the DCTC would affect your own household, [enter your information into our personalized calculator](https://policyengine.org/us/household?focus=intro®ion=dc&timePeriod=2023&baseline=2&reform=6201).** +**To see how the DCTC would affect your own household, [enter your information into our personalized calculator](https://legacy.policyengine.org/us/household?focus=intro®ion=dc&timePeriod=2023&baseline=2&reform=6201).** _Note that our calculator does not reflect the limit of three children or the one-year tenure requirement. It also assumes that your household files taxes together, not married filing separately on the same return._ @@ -28,17 +28,17 @@ A filer’s DCTC depends on their marital status, number of children, and income ## DC-wide impacts -PolicyEngine estimates population-level impacts by pairing its rules engine with representative survey data released by the US Census Bureau. Specifically, it uses the 2021 [Current Population Survey March Supplement](https://www.census.gov/data/datasets/time-series/demo/cps/cps-asec.html) (CPS), the official source of poverty metrics, and pairs this with policy rules for 2023. Of the 59,148 households in the CPS, 1,135 reside in DC. Given this relatively small sample size, [PolicyEngine plans to enhance this dataset in the future](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis), and this will also facilitate farther-out predictions, such as tax year 2026 when the DCTC would take effect. As we have not yet modeled DC income taxes, we also assume that filers apply the same filing status as on their federal return, rather than married couples filing separately on the same return, as DC allows. +PolicyEngine estimates population-level impacts by pairing its rules engine with representative survey data released by the US Census Bureau. Specifically, it uses the 2021 [Current Population Survey March Supplement](https://www.census.gov/data/datasets/time-series/demo/cps/cps-asec.html) (CPS), the official source of poverty metrics, and pairs this with policy rules for 2023. Of the 59,148 households in the CPS, 1,135 reside in DC. Given this relatively small sample size, [PolicyEngine plans to enhance this dataset in the future](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis), and this will also facilitate farther-out predictions, such as tax year 2026 when the DCTC would take effect. As we have not yet modeled DC income taxes, we also assume that filers apply the same filing status as on their federal return, rather than married couples filing separately on the same return, as DC allows. -PolicyEngine estimates that the DCTC would [cost about $27 million](https://policyengine.org/us/policy?focus=policyOutput.netIncome®ion=dc&timePeriod=2023&baseline=2&reform=6201) in 2023. This equates to [$84 per household](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=dc&timePeriod=2023&baseline=2&reform=6201), or [0.1% of net income](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=dc&timePeriod=2023&baseline=2&reform=6201), disproportionately to those in the second through fourth income deciles. Overall, the policy would [reduce income inequality by 0.1–0.2%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), depending on the metric. +PolicyEngine estimates that the DCTC would [cost about $27 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome®ion=dc&timePeriod=2023&baseline=2&reform=6201) in 2023. This equates to [$84 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=dc&timePeriod=2023&baseline=2&reform=6201), or [0.1% of net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=dc&timePeriod=2023&baseline=2&reform=6201), disproportionately to those in the second through fourth income deciles. Overall, the policy would [reduce income inequality by 0.1–0.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), depending on the metric. ![](https://cdn-images-1.medium.com/max/3200/0*clzTvjQqGl8RPfbg) -[One in five Washingtonians would benefit from the DCTC](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), also disproportionately those in the second through fourth income deciles. One in twenty would see their net income rise by at least five percent, including one in five in the second income decile. Those in the bottom decile benefit less because these households have fewer children. +[One in five Washingtonians would benefit from the DCTC](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), also disproportionately those in the second through fourth income deciles. One in twenty would see their net income rise by at least five percent, including one in five in the second income decile. Those in the bottom decile benefit less because these households have fewer children. ![](https://cdn-images-1.medium.com/max/3200/0*ZK8syfSSOghJdTFi) -The DCTC would [reduce the poverty rate by 1.3%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), from 14.0% to 13.8%, as measured by the [Supplemental Poverty Measure](https://www.census.gov/topics/income-poverty/supplemental-poverty-measure.html), which considers taxes, transfers, and local housing costs. Child poverty would fall 5.2%, from 13.8% to 13.0%. PolicyEngine also estimates that the DCTC would [disproportionately reduce poverty among men](https://policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), and that it would [not affect deep poverty](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201) (people with income below half the poverty line), though these likely result from small sample sizes. +The DCTC would [reduce the poverty rate by 1.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), from 14.0% to 13.8%, as measured by the [Supplemental Poverty Measure](https://www.census.gov/topics/income-poverty/supplemental-poverty-measure.html), which considers taxes, transfers, and local housing costs. Child poverty would fall 5.2%, from 13.8% to 13.0%. PolicyEngine also estimates that the DCTC would [disproportionately reduce poverty among men](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201), and that it would [not affect deep poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201) (people with income below half the poverty line), though these likely result from small sample sizes. ![](https://cdn-images-1.medium.com/max/3200/0*GGCE1U95070AYxGC) @@ -56,7 +56,7 @@ As a refundable tax credit, the DCTC would effectively serve as a benefit paid t While PolicyEngine does not yet model these programs for a quantitative comparison, we can describe some ways in which the DCTC diverges from them. -One difference is the phase out structure. The DCTC phases out more slowly and at a higher income than other DC programs: at 2% of income exceeding $100,000 or $145,000. For comparison, the DC EITC for filers with children phases out at 11–15% of income exceeding $21,560.[^1] The Homeowner and Renter Property Credit has a [cliff](https://blog.policyengine.org/how-would-reforms-affect-cliffs-c390fffcfdf7) at $57,600 income, or $78,600 for those age 70 or above. The Keep Childcare Affordable Tax Credit also has a cliff, at $157,200 income ($78,600 for married filing separately). TANF too has a cliff at its income limit, which varies with household size (e.g. $712 per month for a family of three). As a result of the DCTC design, it [avoids contributing to welfare cliffs](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201). +One difference is the phase out structure. The DCTC phases out more slowly and at a higher income than other DC programs: at 2% of income exceeding $100,000 or $145,000. For comparison, the DC EITC for filers with children phases out at 11–15% of income exceeding $21,560.[^1] The Homeowner and Renter Property Credit has a [cliff](https://blog.policyengine.org/how-would-reforms-affect-cliffs-c390fffcfdf7) at $57,600 income, or $78,600 for those age 70 or above. The Keep Childcare Affordable Tax Credit also has a cliff, at $157,200 income ($78,600 for married filing separately). TANF too has a cliff at its income limit, which varies with household size (e.g. $712 per month for a family of three). As a result of the DCTC design, it [avoids contributing to welfare cliffs](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&household=24552®ion=dc&timePeriod=2023&baseline=2&reform=6201). [^1]: The EITC phases out at 15.98% for filers with one child and 21.06% for filers with two or more children. These result in 11–15% when multiplied by DC’s 70% multiplier. diff --git a/src/posts/articles/earth-day-2025.md b/src/posts/articles/earth-day-2025.md index 8a3563bd8..342ef696f 100644 --- a/src/posts/articles/earth-day-2025.md +++ b/src/posts/articles/earth-day-2025.md @@ -10,9 +10,9 @@ As I described (slides available [here](https://docs.google.com/presentation/d/1 Energy policies can affect household budgets in numerous ways. PolicyEngine uses microsimulation modeling to estimate these effects. The platform can analyze: -- **Carbon Pricing:** In the UK, we can model hypothetical policies like a [carbon tax](https://policyengine.org/uk/research/how-policyengine-estimates-the-effects-of-uk-carbon-taxes) paired with a dividend. Our UK model demonstrated the distributional effects of pairing a £100/tonne carbon tax with an £18/week universal dividend, showing potential outcomes across income and wealth levels. +- **Carbon Pricing:** In the UK, we can model hypothetical policies like a [carbon tax](https://legacy.policyengine.org/uk/research/how-policyengine-estimates-the-effects-of-uk-carbon-taxes) paired with a dividend. Our UK model demonstrated the distributional effects of pairing a £100/tonne carbon tax with an £18/week universal dividend, showing potential outcomes across income and wealth levels. - **Energy Assistance Programs:** In some US states, we model programs like the Low Income Home Energy Assistance Program (LIHEAP). For example, we can simulate Michigan's Home Heating Credit to show how benefits change based on income and heating costs, revealing implicit subsidy rates. -- **Energy Price Regulations:** We have modeled policies like the [UK's Energy Price Guarantee](https://policyengine.org/uk/research/projected-impact-of-the-uks-extended-energy-price-guarantee), which capped household energy costs. +- **Energy Price Regulations:** We have modeled policies like the [UK's Energy Price Guarantee](https://legacy.policyengine.org/uk/research/projected-impact-of-the-uks-extended-energy-price-guarantee), which capped household energy costs. - **Clean Energy Incentives:** We analyze individual tax credits, such as the Clean Vehicle Credit from the Inflation Reduction Act (IRA), including eligibility rules and income interactions. You can read my [2022 UBI Center report](https://www.ubicenter.org/ira-ev-credit-cliff) for a demonstration. - **Implicit Subsidies:** We can identify energy-related components in other programs, like the SNAP utility expense deduction. - **State & Local Programs:** We incorporate state-specific policies, such as California's low-income electricity discounts (CARE and FERA). @@ -42,4 +42,4 @@ We are continuously expanding our capabilities. As discussed in the presentation ### Learn More -Understanding the economic and distributional effects of energy policy involves dissecting complex interactions. PolicyEngine provides transparent, accessible tools for this analysis. Explore our platform and contribute to our open-source project. Visit [PolicyEngine US](https://policyengine.org/us) and [PolicyEngine UK](https://policyengine.org/uk) to learn more. +Understanding the economic and distributional effects of energy policy involves dissecting complex interactions. PolicyEngine provides transparent, accessible tools for this analysis. Explore our platform and contribute to our open-source project. Visit [PolicyEngine US](https://legacy.policyengine.org/us) and [PolicyEngine UK](https://legacy.policyengine.org/uk) to learn more. diff --git a/src/posts/articles/electric-vehicle-tax-credits-under-current-law-and-the-inflation-reduction-act.md b/src/posts/articles/electric-vehicle-tax-credits-under-current-law-and-the-inflation-reduction-act.md index 271b68e58..37a4346f4 100644 --- a/src/posts/articles/electric-vehicle-tax-credits-under-current-law-and-the-inflation-reduction-act.md +++ b/src/posts/articles/electric-vehicle-tax-credits-under-current-law-and-the-inflation-reduction-act.md @@ -1,6 +1,6 @@ Today’s tax code provides a credit of up to $7,500 for purchasing a new electric vehicle. The Inflation Reduction Act introduced by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) last week would reform this credit and create a new one for purchasing used electric vehicles (EVs). PolicyEngine US now models all of these provisions for households. -While PolicyEngine lets you adjust a range of policy parameters for the current law and Inflation Reduction Act (IRA), the simplest way to explore the IRA is to turn it on. This video shows how to do that and compute the [IRA’s impact on the buyer of a used EV](https://policyengine.org/us/household?inflation_reduction_act_in_effect=1). +While PolicyEngine lets you adjust a range of policy parameters for the current law and Inflation Reduction Act (IRA), the simplest way to explore the IRA is to turn it on. This video shows how to do that and compute the [IRA’s impact on the buyer of a used EV](https://legacy.policyengine.org/us/household?inflation_reduction_act_in_effect=1).
@@ -10,4 +10,4 @@ Electric vehicle credits are non-refundable, meaning they do not lower a househo The Inflation Reduction Act limits the EV credits by household income, changes the formula for new EV credits, and introduces a used EV credit of up to $4,000. PolicyEngine models the impacts of those policies and current law for individual households; we do not yet compute the population impacts. -To explore electric vehicle tax credits and other customizable policy reforms, [visit PolicyEngine US at policyengine.org/us](http://policyengine.org/us). +To explore electric vehicle tax credits and other customizable policy reforms, [visit PolicyEngine US at policyengine.org/us](http://legacy.policyengine.org/us). diff --git a/src/posts/articles/enhanced-cps-launch.md b/src/posts/articles/enhanced-cps-launch.md index e0e996ef4..26045af65 100644 --- a/src/posts/articles/enhanced-cps-launch.md +++ b/src/posts/articles/enhanced-cps-launch.md @@ -63,7 +63,7 @@ We're developing [`microcalibrate`](https://github.com/PolicyEngine/microcalibra We currently integrate data from the Survey of Consumer Finances (for auto loan interest) and American Community Survey (for housing costs). Future enhancements will expand these integrations: -- **Wealth modeling from SCF**: Comprehensive asset and debt data for modeling asset limits in SNAP, SSI, and other means-tested programs, similar to our [wealth modeling in the UK](https://policyengine.org/uk/research/uk-the-new-policyengine) +- **Wealth modeling from SCF**: Comprehensive asset and debt data for modeling asset limits in SNAP, SSI, and other means-tested programs, similar to our [wealth modeling in the UK](https://legacy.policyengine.org/uk/research/uk-the-new-policyengine) - **Consumer Expenditure Survey**: Consumption patterns for modeling sales taxes, carbon pricing, and other consumption-based policies - **Expanded ACS integration**: Additional geographic and demographic detail for state and local policy analysis @@ -73,7 +73,7 @@ The Enhanced CPS is now the exclusive dataset for nationwide PolicyEngine US ana You can access the Enhanced CPS through: -**Web interface**: The Enhanced CPS powers all nationwide calculations at [policyengine.org/us](https://policyengine.org/us) +**Web interface**: The Enhanced CPS powers all nationwide calculations at [policyengine.org/us](https://legacy.policyengine.org/us) **Python package**: Works by default for our `Microsimulation` calls. diff --git a/src/posts/articles/enhanced-premium-tax-credits-extension.md b/src/posts/articles/enhanced-premium-tax-credits-extension.md index cbfdc37e3..1681f96bb 100644 --- a/src/posts/articles/enhanced-premium-tax-credits-extension.md +++ b/src/posts/articles/enhanced-premium-tax-credits-extension.md @@ -2,7 +2,7 @@ In March 2021, President Joe Biden signed into law the [American Rescue Plan Act In this report, we use the [PolicyEngine ACA microsimulation model](https://github.com/PolicyEngine/policyengine-us/blob/master/docs/gov/hhs/aca.md) to simulate extending the enhanced premium tax credits in 2026, showing their effects on archetypical households' net income and marginal tax rates. -_See how this reform would affect your household [here](https://policyengine.org/us/household?focus=intro®ion=us&timePeriod=2025&baseline=2&reform=83726)_ +_See how this reform would affect your household [here](https://legacy.policyengine.org/us/household?focus=intro®ion=us&timePeriod=2025&baseline=2&reform=83726)_ ## Background diff --git a/src/posts/articles/enhancing-the-current-population-survey-for-policy-analysis.md b/src/posts/articles/enhancing-the-current-population-survey-for-policy-analysis.md index f94f68683..61a35ab01 100644 --- a/src/posts/articles/enhancing-the-current-population-survey-for-policy-analysis.md +++ b/src/posts/articles/enhancing-the-current-population-survey-for-policy-analysis.md @@ -1,4 +1,4 @@ -The [PolicyEngine US app](http://policyengine.org/us) uses a microsimulation model to compute the impact of custom tax and benefit reforms on the Current Population Survey (CPS). While the CPS is widely used for policy analysis, it contains inaccuracies that can impact the accuracy of policy simulations. +The [PolicyEngine US app](http://legacy.policyengine.org/us) uses a microsimulation model to compute the impact of custom tax and benefit reforms on the Current Population Survey (CPS). While the CPS is widely used for policy analysis, it contains inaccuracies that can impact the accuracy of policy simulations. In 2023, we will enhance the CPS by integrating it with IRS tax records and reweighting it to minimize deviations from administrative aggregates. This enhanced dataset will be used in the PolicyEngine microsimulation app and will also be made available as an open resource for other policy research. diff --git a/src/posts/articles/estimating-your-supplemental-security-income-benefits-in-policyengine.md b/src/posts/articles/estimating-your-supplemental-security-income-benefits-in-policyengine.md index ebb78ade5..2e791f8d5 100644 --- a/src/posts/articles/estimating-your-supplemental-security-income-benefits-in-policyengine.md +++ b/src/posts/articles/estimating-your-supplemental-security-income-benefits-in-policyengine.md @@ -1,10 +1,10 @@ Low-income seniors and people with disabilities can claim [Supplemental Security Income](https://www.ssa.gov/ssi/), a monthly cash benefit run by the [Social Security Administration](https://www.ssa.gov/). Last year, [over 7 million people claimed over $50 billion in SSI benefits](https://www.ssa.gov/budget/FY22Files/2022BO.pdf). -In this post, you’ll see how to estimate your own SSI benefits based on your income using the [free PolicyEngine US web app](http://policyengine.org/us). You can also watch it in the below 90-second video. +In this post, you’ll see how to estimate your own SSI benefits based on your income using the [free PolicyEngine US web app](http://legacy.policyengine.org/us). You can also watch it in the below 90-second video.
-To start, visit [\*\*policyengine.org](https://policyengine.org/)** and click **Enter PolicyEngine US\*\*. +To start, visit [\*\*policyengine.org](https://legacy.policyengine.org/)** and click **Enter PolicyEngine US\*\*. Go to the **Your household** tab to enter your household’s info. Let’s say we’re a single parent of one disabled child with $30,000 income. Click **1** in the **Dependents** section. @@ -22,6 +22,6 @@ Now click **Compute your net income.** SSI is in the **Benefits** section of the ![](https://cdn-images-1.medium.com/max/4220/1*07anufgQuSoobtdMU0DUrQ.png) -To estimate your own SSI benefits, as well as other taxes and benefits, visit [**policyengine.org**](https://policyengine.org/). +To estimate your own SSI benefits, as well as other taxes and benefits, visit [**policyengine.org**](https://legacy.policyengine.org/). _PolicyEngine provides estimates only; they do not confer benefit eligibility._ diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index 167d83694..2213b3345 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -34,13 +34,13 @@ The $10,000 SALT deduction cap from the TCJA is scheduled to expire in 2026. The ## Household Impacts of the Family First Act -Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, [household net income increases by $1,835](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. +Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, [household net income increases by $1,835](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. -Figure 1 shows how this household's experience [varies with income](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. +Figure 1 shows how this household's experience [varies with income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. ![Figure 1: FFA effect on net income for a single parent in Utah with two children ages 5 and 10](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) -Figure 2 shows how the reform [alters the household's marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565), particularly if they earn under $50,000, where more programs change such as the Earned Income Tax Credit and dependent exemptions. +Figure 2 shows how the reform [alters the household's marginal tax rates](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565), particularly if they earn under $50,000, where more programs change such as the Earned Income Tax Credit and dependent exemptions. ![Figure 2: FFA effect on marginal tax rates for a single parent in Utah with two children ages 5 and 10](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) @@ -58,7 +58,7 @@ We estimate national impacts using the PolicyEngine US microsimulation model. Se ### Federal Revenue Effects -The FFA raises [$20 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) in net federal revenue in 2026. +The FFA raises [$20 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) in net federal revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) costs $170 billion, other provisions raise $190 billion-—primarily the SALT deduction cap which raises $111 billion. Figure 4 shows the revenue impact of each provision. ![Figure 4: Federal budgetary impacts of Family First Act provisions in 2026](/images/posts/family-first-act/FFA-waterfall.png) @@ -69,23 +69,23 @@ Over the 2025-2034 budget window, the reform raises $505 billion, with federal r ### State Revenue Effects -State revenues rise by [$3.9 billion in 2026](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2), largely from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisiana (5%), and others provide income tax credits that matching the federal EITC amount by varying percentages. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state-specific Child and Dependent Care Income Tax Credits. We consider these state impacts in the following distributional analysis. +State revenues rise by [$3.9 billion in 2026](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2), largely from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisiana (5%), and others provide income tax credits that matching the federal EITC amount by varying percentages. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state-specific Child and Dependent Care Income Tax Credits. We consider these state impacts in the following distributional analysis. ### Changes in Income Distribution -The reform affects household incomes across the income distribution, as shown in Figure 6. [Net income rises for 36% of people and falls for 16%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2). The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). +The reform affects household incomes across the income distribution, as shown in Figure 6. [Net income rises for 36% of people and falls for 16%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2). The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). ![Figure 6: Distribution of gains and losses](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) ### Poverty Reduction -The reform [reduces poverty by 5.9%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 7, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. +The reform [reduces poverty by 5.9%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 7, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. ![Figure 7: Poverty reduction by age group](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) -The reform also reduces income inequality, [lowering the Gini index by 1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2). The share of total income held by the top 1% of households falls by 3.1%. +The reform also reduces income inequality, [lowering the Gini index by 1.4%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2). The share of total income held by the top 1% of households falls by 3.1%. -Finally, the reform increases the [prevalence of cliffs](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) by 0.07% and reduces the severity of cliffs by 0.2%. +Finally, the reform increases the [prevalence of cliffs](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=73854®ion=enhanced_us&timePeriod=2026&baseline=2) by 0.07% and reduces the severity of cliffs by 0.2%. ## Conclusion diff --git a/src/posts/articles/farage-speech-may-2025.ipynb b/src/posts/articles/farage-speech-may-2025.ipynb index fa5d6a3d8..fea6ff05f 100644 --- a/src/posts/articles/farage-speech-may-2025.ipynb +++ b/src/posts/articles/farage-speech-may-2025.ipynb @@ -36,7 +36,7 @@ "\n", "Today Farage confirmed that the party would include these reforms in the next general election manifesto, alongside a fourth commitment to repeal the two-child benefit cap on Universal Credit and Child Tax Credit payments. In the following sections, we summarise how these policies work today and quantify their impact using PolicyEngine's tax-benefit microsimulation model.\n", "\n", - "_[See how these reforms would affect your household here.](https://policyengine.org/uk/household?reform=85289&focus=intro®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false)_\n", + "_[See how these reforms would affect your household here.](https://legacy.policyengine.org/uk/household?reform=85289&focus=intro®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false)_\n", "\n", "## Current policy\n", "\n", @@ -58,7 +58,7 @@ "\n", "## Economic impacts\n", "\n", - "PolicyEngine's model [estimates](https://policyengine.org/uk/policy?reform=85289&focus=policyOutput.budgetaryImpact®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false&simYears=5) that these reforms would cost £75 billion in 2025-26, rising to £78 billion in 2029-30. Over the five-year window from 2025-26 to 2029-30, the total cost of these reforms would be £391 billion. Table 1 below shows the estimated costs of each reform.\n", + "PolicyEngine's model [estimates](https://legacy.policyengine.org/uk/policy?reform=85289&focus=policyOutput.budgetaryImpact®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false&simYears=5) that these reforms would cost £75 billion in 2025-26, rising to £78 billion in 2029-30. Over the five-year window from 2025-26 to 2029-30, the total cost of these reforms would be £391 billion. Table 1 below shows the estimated costs of each reform.\n", "\n", "*Table 1: Estimated revenue impacts of Reform UK's tax-benefit proposals (£ billion)*\n", "| Policy | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2025-30 |\n", @@ -77,7 +77,7 @@ "\n", "```\n", "\n", - "To view more results, visit the [PolicyEngine UK microsimulation model](https://policyengine.org/uk/policy?reform=85289&focus=policyOutput.budgetaryImpact®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false&simYears=5) and our [household calculator](https://policyengine.org/uk/household?reform=85289&focus=intro®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false) for this suite of reforms." + "To view more results, visit the [PolicyEngine UK microsimulation model](https://legacy.policyengine.org/uk/policy?reform=85289&focus=policyOutput.budgetaryImpact®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false&simYears=5) and our [household calculator](https://legacy.policyengine.org/uk/household?reform=85289&focus=intro®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=false) for this suite of reforms." ] }, { diff --git a/src/posts/articles/federal-tax-inflation-adjustments-2025.md b/src/posts/articles/federal-tax-inflation-adjustments-2025.md index a44d96714..314d23c87 100644 --- a/src/posts/articles/federal-tax-inflation-adjustments-2025.md +++ b/src/posts/articles/federal-tax-inflation-adjustments-2025.md @@ -2,13 +2,13 @@ ## How does the IRS update tax parameters? -Federal tax law requires inflation adjustments for certain tax parameters using the Consumer Price Index (CPI). The [U.S. Bureau of Labor Statistics](https://www.bls.gov/cpi/) defines CPI as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” As prices grow over time, CPI increases accordingly. The Bureau maintains multiple versions of CPI including the Consumer Price Index for All Urban Workers (CPI-U), the Consumer Price Index for Urban Wage Earners (CPI-W), and the Chained Consumer Price Index (C-CPI). Before 2018, legislation required the use of CPI-U for indexed tax provisions; however, the [Tax Cuts and Jobs Act](https://policyengine.org/us/research/tcja-extension) mandated a switch to Chained CPI, which accounts for consumer substitution behavior and by construction results in smaller inflation adjustments. +Federal tax law requires inflation adjustments for certain tax parameters using the Consumer Price Index (CPI). The [U.S. Bureau of Labor Statistics](https://www.bls.gov/cpi/) defines CPI as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” As prices grow over time, CPI increases accordingly. The Bureau maintains multiple versions of CPI including the Consumer Price Index for All Urban Workers (CPI-U), the Consumer Price Index for Urban Wage Earners (CPI-W), and the Chained Consumer Price Index (C-CPI). Before 2018, legislation required the use of CPI-U for indexed tax provisions; however, the [Tax Cuts and Jobs Act](https://legacy.policyengine.org/us/research/tcja-extension) mandated a switch to Chained CPI, which accounts for consumer substitution behavior and by construction results in smaller inflation adjustments. ## What was updated? PolicyEngine has modeled most federal income tax provisions since 2022. Additionally, we use [inflation projections](https://www.cbo.gov/data/budget-economic-data#10) from the Congressional Budget Office (CBO) and statutory rounding rules to estimate the values of these provisions for future years. This allows accurate calculations of future tax benefits and proper analysis of policy proposals for tax year 2025 and beyond. -The IRS updates generally increased the inflation adjustment by about 10% beyond our CBO-based projections. For example, CBO projected that the standard deduction for single people would rise $350 from $14,600 in 2024 to $14,950 in 2025, while the IRS updated the value to $15,000. That $400 increase exceeded the $350 projection by 14%. Table 1 displays these [standard deduction](https://policyengine.org/us/policy?focus=gov.irs.deductions.standard.amount.HEAD_OF_HOUSEHOLD) values for all filing statuses. +The IRS updates generally increased the inflation adjustment by about 10% beyond our CBO-based projections. For example, CBO projected that the standard deduction for single people would rise $350 from $14,600 in 2024 to $14,950 in 2025, while the IRS updated the value to $15,000. That $400 increase exceeded the $350 projection by 14%. Table 1 displays these [standard deduction](https://legacy.policyengine.org/us/policy?focus=gov.irs.deductions.standard.amount.HEAD_OF_HOUSEHOLD) values for all filing statuses. **Table 1: IRS Updates for the Standard Deduction in Tax Year 2025** @@ -16,36 +16,36 @@ The IRS updates generally increased the inflation adjustment by about 10% beyond In addition to updating the standard deduction values, we also modified the values for the following provisions. -- [Aged/blind standard deduction amount](https://policyengine.org/us/policy?focus=gov.irs.deductions.standard.aged_or_blind.amount.HEAD_OF_HOUSEHOLD) +- [Aged/blind standard deduction amount](https://legacy.policyengine.org/us/policy?focus=gov.irs.deductions.standard.aged_or_blind.amount.HEAD_OF_HOUSEHOLD) -- [Dependent standard deduction amount](https://policyengine.org/us/policy?focus=gov.irs.deductions.standard.dependent.amount) +- [Dependent standard deduction amount](https://legacy.policyengine.org/us/policy?focus=gov.irs.deductions.standard.dependent.amount) -- [Additional earned income amount for the dependent standard deduction](https://policyengine.org/us/policy?focus=gov.irs.deductions.standard.dependent.additional_earned_income) +- [Additional earned income amount for the dependent standard deduction](https://legacy.policyengine.org/us/policy?focus=gov.irs.deductions.standard.dependent.additional_earned_income) -- [Income tax bracket thresholds](https://policyengine.org/us/policy?focus=gov.irs.income.bracket.thresholds.1.HEAD_OF_HOUSEHOLD) +- [Income tax bracket thresholds](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.bracket.thresholds.1.HEAD_OF_HOUSEHOLD) -- [Capital gains bracket thresholds](https://policyengine.org/us/policy?focus=gov.irs.capital_gains.brackets.thresholds.1.HEAD_OF_HOUSEHOLD) +- [Capital gains bracket thresholds](https://legacy.policyengine.org/us/policy?focus=gov.irs.capital_gains.brackets.thresholds.1.HEAD_OF_HOUSEHOLD) -- [EITC maximum values](https://policyengine.org/us/policy?focus=gov.irs.credits.eitc.max%5B0%5D.amount) +- [EITC maximum values](https://legacy.policyengine.org/us/policy?focus=gov.irs.credits.eitc.max%5B0%5D.amount) -- [EITC joint bonus](https://policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.joint_bonus%5B0%5D.amount) (difference between phase-out for single and joint filers) +- [EITC joint bonus](https://legacy.policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.joint_bonus%5B0%5D.amount) (difference between phase-out for single and joint filers) -- [EITC maximum investment income amount](https://policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.max_investment_income) +- [EITC maximum investment income amount](https://legacy.policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.max_investment_income) -- [EITC phase-out start](https://policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.start%5B0%5D.amount) +- [EITC phase-out start](https://legacy.policyengine.org/us/policy?focus=gov.irs.credits.eitc.phase_out.start%5B0%5D.amount) -- [Estate tax exemption](https://policyengine.org/us/policy?focus=gov.irs.credits.estate.base) +- [Estate tax exemption](https://legacy.policyengine.org/us/policy?focus=gov.irs.credits.estate.base) -- [Qualified business income deduction phase-out start](https://policyengine.org/us/policy?focus=gov.irs.deductions.qbi.phase_out.start.HEAD_OF_HOUSEHOLD) +- [Qualified business income deduction phase-out start](https://legacy.policyengine.org/us/policy?focus=gov.irs.deductions.qbi.phase_out.start.HEAD_OF_HOUSEHOLD) -- [Alternative minimum tax (AMT) threshold](https://policyengine.org/us/policy?focus=gov.irs.income.amt.brackets%5B1%5D.threshold) +- [Alternative minimum tax (AMT) threshold](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.amt.brackets%5B1%5D.threshold) -- [AMT exemption amount](https://policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.amount.HEAD_OF_HOUSEHOLD) +- [AMT exemption amount](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.amount.HEAD_OF_HOUSEHOLD) -- [AMT child exemption amount](https://policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.child.amount) +- [AMT child exemption amount](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.child.amount) -- [AMT phase-out start](https://policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.phase_out.start.HEAD_OF_HOUSEHOLD) +- [AMT phase-out start](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.phase_out.start.HEAD_OF_HOUSEHOLD) -- [AMT separate limit](https://policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.separate_limit) +- [AMT separate limit](https://legacy.policyengine.org/us/policy?focus=gov.irs.income.amt.exemption.separate_limit) -We invite you to view all of the listed provisions above in our model and [compute your own policy reforms](https://policyengine.org/us/policy?focus=gov) using the updated parameters. +We invite you to view all of the listed provisions above in our model and [compute your own policy reforms](https://legacy.policyengine.org/us/policy?focus=gov) using the updated parameters. diff --git a/src/posts/articles/final-2025-reconciliation-tax.md b/src/posts/articles/final-2025-reconciliation-tax.md index b912a4d8f..12e4c46c0 100644 --- a/src/posts/articles/final-2025-reconciliation-tax.md +++ b/src/posts/articles/final-2025-reconciliation-tax.md @@ -48,7 +48,7 @@ In 2026, when most provisions are active, households would experience a change i ### Elderly couple in Texas -An elderly couple with $80,000 in employment income from Texas would see their [net income rise by $2,835](https://policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54569). While they would benefit from the TCJA extension compared to current law, this couple would also qualify for the additional senior deduction of $12,000 ($6,000 for each elderly member). This paired with the existing additional deduction for senior couples ($3,200) and the extension of the TCJA standard deduction ($32,600 in 2026) prevents this couple from paying any income tax on their first $47,800 of earnings compared to $30,400 under current law. +An elderly couple with $80,000 in employment income from Texas would see their [net income rise by $2,835](https://legacy.policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54569). While they would benefit from the TCJA extension compared to current law, this couple would also qualify for the additional senior deduction of $12,000 ($6,000 for each elderly member). This paired with the existing additional deduction for senior couples ($3,200) and the extension of the TCJA standard deduction ($32,600 in 2026) prevents this couple from paying any income tax on their first $47,800 of earnings compared to $30,400 under current law. Figure 1 shows this household’s change in net income over household earnings. Once earnings exceed $30,400, the household begins to see an increase in their net income before plateauing at $47,800. When annual income surpasses $54,500, net income begins to rise again. @@ -58,7 +58,7 @@ Figure 1 shows this household’s change in net income over household earnings. ### Single undocumented parent in New York -A single parent in New York with two children and $40,000 of earnings would be in line to benefit from the increased CTC compared to current law. However, due to the new SSN requirement for parents under the Senate bill, if they did not have a valid SSN, their net income would [fall by $2,335](https://policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54580) as they would become ineligible for the CTC valued at $1,000 per child under current law. The additional loss of $335 stems from their combined personal exemptions and standard deduction under current law exceeding OBBB’s standard deduction by $3,550. As this makes them face the 10% income bracket, their tax liability increases by $355. +A single parent in New York with two children and $40,000 of earnings would be in line to benefit from the increased CTC compared to current law. However, due to the new SSN requirement for parents under the Senate bill, if they did not have a valid SSN, their net income would [fall by $2,335](https://legacy.policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54580) as they would become ineligible for the CTC valued at $1,000 per child under current law. The additional loss of $335 stems from their combined personal exemptions and standard deduction under current law exceeding OBBB’s standard deduction by $3,550. As this makes them face the 10% income bracket, their tax liability increases by $355. Figure 2 shows that their net income falls at any earnings level between $3,000 and $100,000, and the maximum loss occurs at $45,500 earnings. @@ -68,7 +68,7 @@ Figure 2 shows that their net income falls at any earnings level between $3,000 ### Single adult in Montana with tip income -A single adult from Montana with $50,000 of salaries including $4,000 from tips would [gain $1,903](https://policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54621) from the Senate tax provisions. As the filer’s income falls below the tip income exemption cap, they can fully deduct their $4,000 of tipped income from their federal tax return. In addition to also benefitting from the TCJA extensions, Montana ties its standard deduction to the federal amount by statute, resulting in a lower state tax liability of $731 (included in the total benefit). +A single adult from Montana with $50,000 of salaries including $4,000 from tips would [gain $1,903](https://legacy.policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54621) from the Senate tax provisions. As the filer’s income falls below the tip income exemption cap, they can fully deduct their $4,000 of tipped income from their federal tax return. In addition to also benefitting from the TCJA extensions, Montana ties its standard deduction to the federal amount by statute, resulting in a lower state tax liability of $731 (included in the total benefit). Figure 3 shows that the filer’s benefit increases with earnings, for earnings above $8,000. @@ -78,7 +78,7 @@ Figure 3 shows that the filer’s benefit increases with earnings, for earnings ### High-income couple with two children in California -For a joint filer with two children in California with $1 million of annual income and $60,000 of itemized deductions across several sources, household net income would [drop by $9,627](https://policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) compared to current law. While this filer would benefit from the extensions of the reduced income tax rates, floor exclusion of charitable contributions, and the $40,000 SALT cap all reduce the tax savings the household would be eligible under current law. +For a joint filer with two children in California with $1 million of annual income and $60,000 of itemized deductions across several sources, household net income would [drop by $9,627](https://legacy.policyengine.org/us/household?reform=87626&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) compared to current law. While this filer would benefit from the extensions of the reduced income tax rates, floor exclusion of charitable contributions, and the $40,000 SALT cap all reduce the tax savings the household would be eligible under current law. In Figure 4, the filer from California benefits from the OBBB seeing its highest increase in net income near $505,000 of earnings. However, at higher earnings levels, the bill limits their itemized deductions, resulting in increasing net losses at earnings levels above $885,000 (including those beyond the $2 million viewable area in Figure 4). @@ -101,7 +101,7 @@ Table 1 below summarizes each filer’s characteristics and their change in net ### Budgetary impact -Using PolicyEngine’s static microsimulation model, we project that the Senate tax provisions of the One Big Beautiful Big Act would cost $3.8 trillion from 2026 to 2035. Additionally, because several proposed changes go into effect this tax year, it would [reduce federal revenues by $63.8 billion](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps&household=54592) in 2025. +Using PolicyEngine’s static microsimulation model, we project that the Senate tax provisions of the One Big Beautiful Big Act would cost $3.8 trillion from 2026 to 2035. Additionally, because several proposed changes go into effect this tax year, it would [reduce federal revenues by $63.8 billion](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2025&baseline=2&dataset=enhanced_cps&household=54592) in 2025. **Table 2: Annual Federal Revenue Impact of the Income Tax Provisions in the OBBB.** @@ -123,31 +123,31 @@ Using PolicyEngine’s static microsimulation model, we project that the Senate Our distributional analysis includes the OBBB’s effect on federal taxes, as well as state and local taxes resulting from statutory references to the federal code (e.g., Montana applying the federal standard deduction). -The bill would increase the net income of [76% of U.S. residents](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) in 2026. The percentage of U.S. residents would vary by income decile, as the highest income decile would have the highest percentage of residents benefiting at 93.5%, while the lowest would have 33.1% of residents see an increase in their net income. Additionally, 7.7% of the U.S. population would be worse off under the tax provisions in 2026. The reduction of net income for residents can be attributed to the SSN requirements for parents to claim the CTC (mostly affecting lower to middle-income households) and limitations on itemized deductions (mostly affecting higher-income tax units). +The bill would increase the net income of [76% of U.S. residents](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) in 2026. The percentage of U.S. residents would vary by income decile, as the highest income decile would have the highest percentage of residents benefiting at 93.5%, while the lowest would have 33.1% of residents see an increase in their net income. Additionally, 7.7% of the U.S. population would be worse off under the tax provisions in 2026. The reduction of net income for residents can be attributed to the SSN requirements for parents to claim the CTC (mostly affecting lower to middle-income households) and limitations on itemized deductions (mostly affecting higher-income tax units). **Figure 5: Winners and Losers of the Income Tax Provisions in the OBBB (2026)** ![](https://cdn-images-1.medium.com/max/2000/0*mh1vTI7opHP-XQsL) -In 2026, households in the bottom deciles would gain an average of [$342](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592), while those in the top decile would gain an average of $13,231. +In 2026, households in the bottom deciles would gain an average of [$342](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592), while those in the top decile would gain an average of $13,231. **Figure 6: Average Household Impact of the Income Tax Provisions in the OBBB (2026)** ![](https://cdn-images-1.medium.com/max/2000/0*19Jo603gE9K6iCTs) -The bill would increase the net income of the top decile by [3.1%](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.distributionalImpact.incomeDecile.relative®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) on average, the largest gain across deciles. +The bill would increase the net income of the top decile by [3.1%](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.distributionalImpact.incomeDecile.relative®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) on average, the largest gain across deciles. **Figure 7: Average Relative Household Impact of the Income Tax Provisions in the OBBB (2026)** ![](https://cdn-images-1.medium.com/max/3200/0*wz-eg22GXsF1OdlO) -The OBBB tax provisions would reduce [poverty](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) and [deep poverty](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.povertyImpact.deep.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) by 5.5% and 6.1%, respectively. The age group with the largest reduction in poverty would be seniors at 10%, while child poverty would fall by 6.6%, mainly attributable to the increased CTC. +The OBBB tax provisions would reduce [poverty](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=54592) and [deep poverty](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.povertyImpact.deep.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) by 5.5% and 6.1%, respectively. The age group with the largest reduction in poverty would be seniors at 10%, while child poverty would fall by 6.6%, mainly attributable to the increased CTC. **Figure 8: Poverty Impact of the Income Tax Provisions in the OBBB (2026)** ![](https://cdn-images-1.medium.com/max/2000/0*cp2U8KbQ9fdfftJB) -In terms of [income inequality](https://policyengine.org/us/policy?reform=87626&focus=policyOutput.inequalityImpact®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps), the income tax provisions would increase the Gini index by 0.4% in 2026. Furthermore, the bill increases the top 1%’s net income by 1.9%, less than the overall 2.6%, reducing their share of net income would fall by 0.2%. +In terms of [income inequality](https://legacy.policyengine.org/us/policy?reform=87626&focus=policyOutput.inequalityImpact®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps), the income tax provisions would increase the Gini index by 0.4% in 2026. Furthermore, the bill increases the top 1%’s net income by 1.9%, less than the overall 2.6%, reducing their share of net income would fall by 0.2%. **Figure 9: Inequality Impact of the Senate Tax Provisions in the OBBB (2026)** @@ -159,7 +159,7 @@ The individual income tax reforms as part of HR 1 would cost $3.8 trillion over As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix 1: Summary of Provisions diff --git a/src/posts/articles/fisc-act.md b/src/posts/articles/fisc-act.md index f4845d716..1bad1d0bf 100644 --- a/src/posts/articles/fisc-act.md +++ b/src/posts/articles/fisc-act.md @@ -24,9 +24,9 @@ This new credit’s cost is partially offset by the repeal of the existing Child ## Household Impacts -Considering a married couple in Virginia with $40,000 of earnings and two children aged 3 and 10. Under the FISC Act, [household net income increases](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51530) by $7,360. This household will receive a family income supplement credit of $9,360, receiving a base credit of $7,800 with a 20% marriage bonus. Simultaneously this household would lose their Child Tax Credit of $2,000, where $1,780 is refundable and $220 is non-refundable (the maximum per-child CTC falls from $2,000 in 2025 to $1,000 in 2026 under current law). +Considering a married couple in Virginia with $40,000 of earnings and two children aged 3 and 10. Under the FISC Act, [household net income increases](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51530) by $7,360. This household will receive a family income supplement credit of $9,360, receiving a base credit of $7,800 with a 20% marriage bonus. Simultaneously this household would lose their Child Tax Credit of $2,000, where $1,780 is refundable and $220 is non-refundable (the maximum per-child CTC falls from $2,000 in 2025 to $1,000 in 2026 under current law). -Figure 1 shows how this household’s experience [varies with net income](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51530). The family income supplement credit phases in at a steeper rate than the current CTC, reaching the maximum amount at earnings of $9,400 while the CTC is fully phased-in at earnings levels of $17,000. Furthermore, the CTC fully phases out at earnings of $110,000 while the family income supplement credit does not start to phase out until $250,000 for joint filers. +Figure 1 shows how this household’s experience [varies with net income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51530). The family income supplement credit phases in at a steeper rate than the current CTC, reaching the maximum amount at earnings of $9,400 while the CTC is fully phased-in at earnings levels of $17,000. Furthermore, the CTC fully phases out at earnings of $110,000 while the family income supplement credit does not start to phase out until $250,000 for joint filers. **Figure 1: Household Net Income Impact of the FISC Act by Household Earnings** ![](https://cdn-images-1.medium.com/max/3200/0*9REG5tMXk4KVwCO9) @@ -45,7 +45,7 @@ The new credit amount varies with children’s ages while adding an additional p Using PolicyEngine’s microsimulation capabilities, and assuming no behavioral responses, we estimate the national impacts of the FISC Act in the 2026 fiscal year. -The FISC Act would reduce federal revenues by [$193.1 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531) in 2026, or $1,293 per household. On average, households in the ninth income decile gain the most ($2,489), while those in the bottom decile gain the least ($390). +The FISC Act would reduce federal revenues by [$193.1 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531) in 2026, or $1,293 per household. On average, households in the ninth income decile gain the most ($2,489), while those in the bottom decile gain the least ($390). **Figure 4: Average Change in Net Income by Income Decile in 2026** ![](https://cdn-images-1.medium.com/max/3200/0*C1SnOSqPhLBgE1BZ) @@ -72,13 +72,13 @@ The FISC Act would reduce federal revenues by [$193.1 billion](https://policyeng ## Poverty Impact -The FISC Act would lower the nation’s Supplemental Poverty Measure by [9.2%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531) and child poverty by 17.7%. PolicyEngine projects the legislation would reduce deep poverty by [11.7%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=76672&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531). +The FISC Act would lower the nation’s Supplemental Poverty Measure by [9.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531) and child poverty by 17.7%. PolicyEngine projects the legislation would reduce deep poverty by [11.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=76672&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531). **Figure 6: Poverty Impact of the FISC Act in 2026** ![](https://cdn-images-1.medium.com/max/3200/0*iLhr0pdmo70LGE1t) ## Conclusion -Representative Golden’s FISC Act would replace the Child Tax Credit with a larger credit that varies with child age and marital status, and introduce a pregnancy credit. It would cost $193 billion in 2026, providing larger benefits to households in the middle of the income distribution than those in the top or bottom deciles. Without considering behavioral responses, it would reduce poverty and [income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531). +Representative Golden’s FISC Act would replace the Child Tax Credit with a larger credit that varies with child age and marital status, and introduce a pregnancy credit. It would cost $193 billion in 2026, providing larger benefits to households in the middle of the income distribution than those in the top or bottom deciles. Without considering behavioral responses, it would reduce poverty and [income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=76612&baseline=2&timePeriod=2026®ion=us&dataset=enhanced_cps&household=51531). -To explore how this policy would affect your household or to design your own reform, visit [PolicyEngine’s interactive tools](https://policyengine.org/us) and discover our broader collection of [policy analyses](https://policyengine.org/us/research). +To explore how this policy would affect your household or to design your own reform, visit [PolicyEngine’s interactive tools](https://legacy.policyengine.org/us) and discover our broader collection of [policy analyses](https://legacy.policyengine.org/us/research). diff --git a/src/posts/articles/fiscalsim.md b/src/posts/articles/fiscalsim.md index 3ac135271..2346d900c 100644 --- a/src/posts/articles/fiscalsim.md +++ b/src/posts/articles/fiscalsim.md @@ -1,4 +1,4 @@ -PolicyEngine, a nonprofit organization, has been dedicated to providing free, open-source software that computes the impact of public policy. Our mission has been to democratize the policy process by making it accessible for everyone, from experts to everyday citizens. To achieve this, we are committed to open-sourcing our models, apps, and reports, allowing anyone to freely use and scrutinize them. [PolicyEngine US](http://policyengine.org/us), our microsimulation model, is a collaborative project with contributions from over 40 volunteer developers. +PolicyEngine, a nonprofit organization, has been dedicated to providing free, open-source software that computes the impact of public policy. Our mission has been to democratize the policy process by making it accessible for everyone, from experts to everyday citizens. To achieve this, we are committed to open-sourcing our models, apps, and reports, allowing anyone to freely use and scrutinize them. [PolicyEngine US](http://legacy.policyengine.org/us), our microsimulation model, is a collaborative project with contributions from over 40 volunteer developers. Recently, we noticed the launch of [FiscalSim](http://fiscalsim.thecgo.org) by the [Center for Growth and Opportunity at Utah State University (CGO)](http://thecgo.org). In this post, we reflect on its development, our contributions to the project, and our past collaboration with CGO. @@ -20,9 +20,9 @@ We have always made PolicyEngine’s code entirely open source. ## FiscalSim interface -The CGO based FiscalSim’s interface largely on PolicyEngine’s original design, which we used from [March 2022](https://policyengine.org/us/blog/2022-03-31-policyengine-comes-stateside) to [January 2023](https://policyengine.org/us/blog/the-new-policyengine). Unlike our open source interface, FiscalSim is closed-source, so we cannot determine how much code traces to our work. But the visual similarities are evident. +The CGO based FiscalSim’s interface largely on PolicyEngine’s original design, which we used from [March 2022](https://legacy.policyengine.org/us/blog/2022-03-31-policyengine-comes-stateside) to [January 2023](https://legacy.policyengine.org/us/blog/the-new-policyengine). Unlike our open source interface, FiscalSim is closed-source, so we cannot determine how much code traces to our work. But the visual similarities are evident. -Consider these screenshots from our [Washington state launch](https://policyengine.org/us/blog/2022-08-10-policyengine-launches-in-washington-state), covering the four core screens of the app: household definition, policy reform, household impact, and population impact. +Consider these screenshots from our [Washington state launch](https://legacy.policyengine.org/us/blog/2022-08-10-policyengine-launches-in-washington-state), covering the four core screens of the app: household definition, policy reform, household impact, and population impact. The household screen resembles our original app, with sections of inputs on the left, inputs in the center, page navigation at the top (though they move some navigation to the far left), and reforms on the right. Because the content and organization of the variables follows from the model, those also match. @@ -46,11 +46,11 @@ Each of the four main sections of the FiscalSim app — household definition, po About a year ago, the CGO funded PolicyEngine’s development of state income taxes in three states: Maryland, Massachusetts, and Washington. We sought to support their research through continued development, but they opted to build a separate app instead. -We have credited the CGO’s financial contribution on [GitHub](http://github.com/policyengine/policyengine-us) and [our blog](https://policyengine.org/us/blog/2022-08-10-policyengine-launches-in-washington-state), and we would do the same if we incorporate CGO code (like the Utah income tax) into PolicyEngine. But that contribution now represents a small part of our software, which also includes seven other state income tax models, all federal taxes and major benefit programs, microdata processing, the policyengine-core framework, impact summaries, and the front-end, all of which is the product of over 40 (mostly volunteer) contributors. +We have credited the CGO’s financial contribution on [GitHub](http://github.com/policyengine/policyengine-us) and [our blog](https://legacy.policyengine.org/us/blog/2022-08-10-policyengine-launches-in-washington-state), and we would do the same if we incorporate CGO code (like the Utah income tax) into PolicyEngine. But that contribution now represents a small part of our software, which also includes seven other state income tax models, all federal taxes and major benefit programs, microdata processing, the policyengine-core framework, impact summaries, and the front-end, all of which is the product of over 40 (mostly volunteer) contributors. ## Acknowledging collaborative efforts -We understand that the development of software often involves collaboration and building upon existing frameworks. In the spirit of open-source development, we encourage the sharing and improvement of tools that contribute to better policy outcomes. However, we believe it’s essential to give credit where it’s due and acknowledge the collaborative efforts that have led to the creation of such tools. For instance, we credited the [Policy Simulation Library](http://pslmodels.org) and [SNAP Screener](https://www.snapscreener.com/?p=table) for their helpful transparency in [our US launch](https://policyengine.org/us/blog/2022-03-31-policyengine-comes-stateside), and [OpenFisca](http://openfisca.org) when we [forked it](https://policyengine.org/us/blog/2022-11-10-from-openfisca-to-policyengine) into our own microsimulation framework. +We understand that the development of software often involves collaboration and building upon existing frameworks. In the spirit of open-source development, we encourage the sharing and improvement of tools that contribute to better policy outcomes. However, we believe it’s essential to give credit where it’s due and acknowledge the collaborative efforts that have led to the creation of such tools. For instance, we credited the [Policy Simulation Library](http://pslmodels.org) and [SNAP Screener](https://www.snapscreener.com/?p=table) for their helpful transparency in [our US launch](https://legacy.policyengine.org/us/blog/2022-03-31-policyengine-comes-stateside), and [OpenFisca](http://openfisca.org) when we [forked it](https://legacy.policyengine.org/us/blog/2022-11-10-from-openfisca-to-policyengine) into our own microsimulation framework. ## Moving forward diff --git a/src/posts/articles/givecalc.md b/src/posts/articles/givecalc.md index 724381bef..6ac9c44d2 100644 --- a/src/posts/articles/givecalc.md +++ b/src/posts/articles/givecalc.md @@ -1,4 +1,4 @@ -This Giving Tuesday, we’re launching [**GiveCalc**](https://policyengine.org/us/givecalc), a free tool that calculates how charitable giving affects your US taxes and net income[^eagx] When you make a tax-deductible donation, you reduce your tax liability — but quantifying that reduction requires modeling complex interactions across federal and state tax systems. +This Giving Tuesday, we’re launching [**GiveCalc**](https://legacy.policyengine.org/us/givecalc), a free tool that calculates how charitable giving affects your US taxes and net income[^eagx] When you make a tax-deductible donation, you reduce your tax liability — but quantifying that reduction requires modeling complex interactions across federal and state tax systems. [^eagx]: The concept originated at a hackathon at EAGxBerkeley in December 2022. Rather than rush to release, we prioritized accuracy and comprehensiveness, developing and validating our model of income taxes at the federal level and across all 50 states, DC, and NYC. We are grateful to the collaborators from that session, who regrettably remain unnamed as we lost track of them. @@ -66,12 +66,12 @@ We’ve [open sourced GiveCalc on GitHub](https://github.com/PolicyEngine/giveca ## Try it yourself -Visit [policyengine.org/us/givecalc](https://policyengine.org/us/givecalc) to calculate your own giving impacts. You can also: +Visit [policyengine.org/us/givecalc](https://legacy.policyengine.org/us/givecalc) to calculate your own giving impacts. You can also: - [View the source code](https://github.com/PolicyEngine/givecalc) - [Report issues or contribute](https://github.com/PolicyEngine/givecalc/issues) -- [Support PolicyEngine](https://policyengine.org/us/donate) with a tax-deductible donation — and use GiveCalc to estimate its impact +- [Support PolicyEngine](https://legacy.policyengine.org/us/donate) with a tax-deductible donation — and use GiveCalc to estimate its impact Share your feedback and feature requests in the comments below or [open an issue](https://github.com/PolicyEngine/givecalc/issues) on GitHub. diff --git a/src/posts/articles/gpt-analysis.md b/src/posts/articles/gpt-analysis.md index 125c796f5..6a433a55b 100644 --- a/src/posts/articles/gpt-analysis.md +++ b/src/posts/articles/gpt-analysis.md @@ -1,4 +1,4 @@ -Just two weeks ago, we [unveiled our ChatGPT integration](https://policyengine.org/us/blog/2023-03-17-automate-policy-analysis-with-policy-engines-new-chatgpt-integration), which allowed users to generate policy analysis by adjusting parameters in PolicyEngine and interacting with [OpenAI’s chatbot](http://chat.openai.com). Shortly after, OpenAI granted us access to the [GPT-4 API](https://openai.com/product/gpt-4), and we’ve been hard at work finding the best ways to harness its power to enhance PolicyEngine’s capabilities. +Just two weeks ago, we [unveiled our ChatGPT integration](https://legacy.policyengine.org/us/blog/2023-03-17-automate-policy-analysis-with-policy-engines-new-chatgpt-integration), which allowed users to generate policy analysis by adjusting parameters in PolicyEngine and interacting with [OpenAI’s chatbot](http://chat.openai.com). Shortly after, OpenAI granted us access to the [GPT-4 API](https://openai.com/product/gpt-4), and we’ve been hard at work finding the best ways to harness its power to enhance PolicyEngine’s capabilities. Today, we’re excited to launch our revamped **Analysis** product. Now, when you design or retrieve a policy reform in PolicyEngine, you can choose from three levels of policy knowledge and generate a comprehensive report that combines AI-generated computational content with interactive charts. Our goal is to provide a more engaging, personalized experience for our users. Here’s a look at how it works and what you can expect. @@ -26,7 +26,7 @@ Once you’ve chosen a mode, you can generate a report. GPT-4 weaves a narrative In our mission to make public policy more personal and accessible, PolicyEngine now offers three audience modes for our built-in GPT-4 integration: ELI5, Normal, and Wonk. These modes cater to varying degrees of familiarity with policy analysis, giving users an instant, customized policy analysis experience. -To better illustrate the differences between the modes, here are some quotes from each, applied to [President Biden’s proposal to restore the American Rescue Plan Act’s Earned Income Tax Credit expansion](https://policyengine.org/us/blog/2023-03-27-restoring-arpa-eitc): +To better illustrate the differences between the modes, here are some quotes from each, applied to [President Biden’s proposal to restore the American Rescue Plan Act’s Earned Income Tax Credit expansion](https://legacy.policyengine.org/us/blog/2023-03-27-restoring-arpa-eitc): **ELI5:** “The ‘Restoring the ARPA EITC’ policy helps people with lower incomes get more money from the government. It makes it easier for younger and older people to get this help and gives them more money. This change costs the government about $9.8 billion and helps reduce poverty a little bit.” @@ -46,7 +46,7 @@ PolicyEngine’s integrated GPT-4 capabilities and new audience modes offer inst ## Examples -Each applies to the reform to [restore the ARPA EITC](https://policyengine.org/us/blog/2023-03-27-restoring-arpa-eitc). +Each applies to the reform to [restore the ARPA EITC](https://legacy.policyengine.org/us/blog/2023-03-27-restoring-arpa-eitc). ## ELI5 diff --git a/src/posts/articles/harris-ctc.md b/src/posts/articles/harris-ctc.md index e30edf03f..c423fccd6 100644 --- a/src/posts/articles/harris-ctc.md +++ b/src/posts/articles/harris-ctc.md @@ -12,13 +12,13 @@ Using the PolicyEngine model, we estimate that this Child Tax Credit expansion w While these effects assume no behavioral responses, the projected cost rises about five percent when applying elasticities from the Congressional Budget Office. -[_See how Kamala Harris’ Child Tax Credit proposal would affect you._](https://policyengine.org/us/household?focus=intro&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) _(Make sure to select **2025**.)_ +[_See how Kamala Harris’ Child Tax Credit proposal would affect you._](https://legacy.policyengine.org/us/household?focus=intro&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) _(Make sure to select **2025**.)_ ## The Child Tax Credit The Child Tax Credit (CTC) currently provides up to $2,000 per child, with a partially refundable structure; that is, filers without tax liability can claim only part of the credit — currently, $1,700. Low-income parents who don’t benefit from the full non-refundable credit can receive the Additional Child Tax Credit, which phases in with earnings above $2,500. The credit begins to phase out at incomes of $200,000 for single parents (head of household filers) and $400,000 for joint filers. -In 2021, the American Rescue Plan Act (ARPA) temporarily expanded the CTC, increasing the maximum credit to $3,600 for children under 6 and $3,000 for older children, making it fully refundable, and introducing an additional phase-out for higher-income households. We’ve previously analyzed the impacts of the [current CTC](https://policyengine.org/us/research/the-child-tax-credit-in-2023), [restoring the ARPA expansion](https://policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit), and the [Biden-Harris 2025 budget proposal](https://policyengine.org/us/research/biden-budget-2025), which also included restoring this expanded CTC. +In 2021, the American Rescue Plan Act (ARPA) temporarily expanded the CTC, increasing the maximum credit to $3,600 for children under 6 and $3,000 for older children, making it fully refundable, and introducing an additional phase-out for higher-income households. We’ve previously analyzed the impacts of the [current CTC](https://legacy.policyengine.org/us/research/the-child-tax-credit-in-2023), [restoring the ARPA expansion](https://legacy.policyengine.org/us/research/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit), and the [Biden-Harris 2025 budget proposal](https://legacy.policyengine.org/us/research/biden-budget-2025), which also included restoring this expanded CTC. ## The Harris Plan @@ -42,26 +42,26 @@ The maximum benefit varies with the child’s age: $6,000 for newborns, $3,600 f ## Microsimulation Results -Using PolicyEngine’s US microsimulation model version 1.54.3 and Enhanced Current Population Survey data, we estimate that Harris’ Child Tax Credit expansion would cost [$117.4 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) in 2025, assuming no behavioral responses. We project that the baby bonus contributes [$6.4 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63710&baseline=2&timePeriod=2025®ion=enhanced_us) to its cost. +Using PolicyEngine’s US microsimulation model version 1.54.3 and Enhanced Current Population Survey data, we estimate that Harris’ Child Tax Credit expansion would cost [$117.4 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) in 2025, assuming no behavioral responses. We project that the baby bonus contributes [$6.4 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63710&baseline=2&timePeriod=2025®ion=enhanced_us) to its cost. -The reform would [benefit 44% of Americans](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us), including 26% who would gain at least 5% of their net income. Those in the eighth income decile are most likely to benefit, while those in the fourth decile are most likely to gain at least 5%. +The reform would [benefit 44% of Americans](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us), including 26% who would gain at least 5% of their net income. Those in the eighth income decile are most likely to benefit, while those in the fourth decile are most likely to gain at least 5%. **Harris Child Tax Credit Impact by Income Decile** ![](https://cdn-images-1.medium.com/max/3200/0*MOotvlk1g6GWT9sF) -Assuming full take-up, the proposal would reduce the Supplemental Poverty Measure 9.1% overall, with disproportionate impact for children (30.5%), Black and Hispanic Americans (10.6% and 11.4%), and women (9.7%). It would also reduce deep poverty 9.9%, including 36.3% among children. Finally, Harris’ CTC would reduce [income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) by between 0.6% (top 1% share) and 1.4% (Gini index), depending on the measure. +Assuming full take-up, the proposal would reduce the Supplemental Poverty Measure 9.1% overall, with disproportionate impact for children (30.5%), Black and Hispanic Americans (10.6% and 11.4%), and women (9.7%). It would also reduce deep poverty 9.9%, including 36.3% among children. Finally, Harris’ CTC would reduce [income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us) by between 0.6% (top 1% share) and 1.4% (Gini index), depending on the measure. ## Labor Supply Effects Incorporating labor supply responses based on Congressional Budget Office elasticities modifies these projections: -- Hours worked would fall by [0.25%](https://policyengine.org/us/policy?reform=63523&focus=policyOutput.laborSupplyImpact.hours®ion=enhanced_us&timePeriod=2025&baseline=2&household=46590) +- Hours worked would fall by [0.25%](https://legacy.policyengine.org/us/policy?reform=63523&focus=policyOutput.laborSupplyImpact.hours®ion=enhanced_us&timePeriod=2025&baseline=2&household=46590) -- Earnings would fall by [0.14%](https://policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.earnings.overall.relative&reform=63719&baseline=2&timePeriod=2025®ion=enhanced_us) +- Earnings would fall by [0.14%](https://legacy.policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.earnings.overall.relative&reform=63719&baseline=2&timePeriod=2025®ion=enhanced_us) -- The total federal cost would increase 4.8% to [$122.9 billion](https://policyengine.org/us/policy?reform=63523&focus=policyOutput.budgetaryImpact.overall®ion=enhanced_us&timePeriod=2025&baseline=2&household=46590) (state and local income tax revenue would also fall $0.9 billion) +- The total federal cost would increase 4.8% to [$122.9 billion](https://legacy.policyengine.org/us/policy?reform=63523&focus=policyOutput.budgetaryImpact.overall®ion=enhanced_us&timePeriod=2025&baseline=2&household=46590) (state and local income tax revenue would also fall $0.9 billion) -- The child poverty impact would fall 6% (1.7pp) to [28.8%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=63719&baseline=2&timePeriod=2025®ion=enhanced_us) +- The child poverty impact would fall 6% (1.7pp) to [28.8%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=63719&baseline=2&timePeriod=2025®ion=enhanced_us) About one-third of these changes reflect the “income effect” (people working less because they have more money), while two-thirds reflect “substitution effects” (changes in work incentives due to altered marginal tax rates). @@ -69,4 +69,4 @@ About one-third of these changes reflect the “income effect” (people working Based on the PolicyEngine model analysis, the proposed Child Tax Credit expansion by Kamala Harris is projected to cost $117.4 billion while reducing child poverty 31% without assuming behavioral responses, which would raise the cost 5% and lower the child poverty impact 6%. These projections are based on current economic conditions and assume full implementation and take-up of the proposed policy. Actual outcomes may vary based on economic fluctuations, implementation details, and other policy interactions. -We invite you to use our tools to explore the reform in more detail at the [US-wide level](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us), to view how it affects your own state (for example, [here’s California](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=ca)), and to see how it would affect [your own household](https://policyengine.org/us/household?focus=intro&reform=63712&baseline=2&timePeriod=2025). +We invite you to use our tools to explore the reform in more detail at the [US-wide level](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=enhanced_us), to view how it affects your own state (for example, [here’s California](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63712&baseline=2&timePeriod=2025®ion=ca)), and to see how it would affect [your own household](https://legacy.policyengine.org/us/household?focus=intro&reform=63712&baseline=2&timePeriod=2025). diff --git a/src/posts/articles/harris-eitc.md b/src/posts/articles/harris-eitc.md index be651684c..7501da42a 100644 --- a/src/posts/articles/harris-eitc.md +++ b/src/posts/articles/harris-eitc.md @@ -1,6 +1,6 @@ Vice President Harris proposes expanding the Earned Income Tax Credit (EITC) for filers without qualifying dependents. This analysis examines the proposal’s key aspects, potential impacts, and provides economic projections from PolicyEngine’s microsimulation model. -[**See the full impact in PolicyEngine**](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) +[**See the full impact in PolicyEngine**](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) ## The proposal @@ -35,11 +35,11 @@ Single filers with earnings between $8,000 and $37,000 would see their net incom ![](https://cdn-images-1.medium.com/max/3044/0*rozC7JqH_bOzaUD_) -For more examples of the policy’s household impacts, see our [2023 article](https://policyengine.org/us/research/restoring-arpa-eitc) on the ARPA EITC expansion. That article’s estimates preceded our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta) launch. +For more examples of the policy’s household impacts, see our [2023 article](https://legacy.policyengine.org/us/research/restoring-arpa-eitc) on the ARPA EITC expansion. That article’s estimates preceded our [Enhanced Current Population Survey](https://legacy.policyengine.org/us/research/enhanced-cps-beta) launch. ## Nationwide impacts -Based on [static microsimulation modeling](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) with PolicyEngine US (version 1.103.0), we project the following economic impacts for 2025. +Based on [static microsimulation modeling](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) with PolicyEngine US (version 1.103.0), we project the following economic impacts for 2025. ### Cost @@ -67,7 +67,7 @@ Over the [ten-year budget window](https://colab.research.google.com/drive/1uf-gm #### Dynamic -Incorporating elasticities of labor supply used by the Congressional Budget Office increases the reform's cost. [In 2025](https://policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.hours&reform=67706®ion=enhanced_us&timePeriod=2025&baseline=2): +Incorporating elasticities of labor supply used by the Congressional Budget Office increases the reform's cost. [In 2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.hours&reform=67706®ion=enhanced_us&timePeriod=2025&baseline=2): - Hours worked falls by 0.27%, or 411,000 full-time equivalent jobs @@ -113,7 +113,7 @@ The PolicyEngine microsimulation model supports distributional analysis by decil ### By decile -The average household [sees](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=67064®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) an increase in net income of $109, between federal, state, and local EITCs, while households in the bottom two deciles gain the most on a relative basis. +The average household [sees](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=67064®ion=enhanced_us&timePeriod=2025&baseline=2&household=47732) an increase in net income of $109, between federal, state, and local EITCs, while households in the bottom two deciles gain the most on a relative basis. ![](https://cdn-images-1.medium.com/max/3152/0*r6VvrLKiMIAkn9jx) @@ -123,11 +123,11 @@ The average household [sees](https://policyengine.org/us/policy?focus=policyOutp ### Poverty -We [estimate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2) that the expanded EITC would reduce the poverty rate by 1.3% (0.4 percentage points), or about 1 million people. Child poverty falls less than 0.1% because some children live in households with workers who file separately to them. +We [estimate](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2) that the expanded EITC would reduce the poverty rate by 1.3% (0.4 percentage points), or about 1 million people. Child poverty falls less than 0.1% because some children live in households with workers who file separately to them. ### Inequality -The Gini index of income inequality also [falls](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2) by 0.2%, and the top-10 and top-1 percent shares of income fall by around 0.1%. +The Gini index of income inequality also [falls](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=67696®ion=enhanced_us&timePeriod=2025&baseline=2) by 0.2%, and the top-10 and top-1 percent shares of income fall by around 0.1%. ![](https://cdn-images-1.medium.com/max/3196/0*AeI48oVouiLsbEg-) diff --git a/src/posts/articles/how-developers-can-explore-the-policyengine-api.md b/src/posts/articles/how-developers-can-explore-the-policyengine-api.md index 5ca8ddf8c..94a43b6de 100644 --- a/src/posts/articles/how-developers-can-explore-the-policyengine-api.md +++ b/src/posts/articles/how-developers-can-explore-the-policyengine-api.md @@ -1,29 +1,29 @@ -Most of our users interact with PolicyEngine via our [UK](http://policyengine.org/uk) and [US](http://policyengine.org/us) web apps, where they enter household information and policy reforms to compute the impact of customisable tax and benefit policy. We’ve also made this information available to developers through our [Python](http://openfisca.us) [packages](http://openfisca.uk) and [web API](https://docs.google.com/document/u/1/d/1y-kRDOssYyRwEVTsntqGxoBtvFS4HKMQD-U0Ga9YzJE/preview). Today, we’re launching companion tools in the [UK](http://policyengine.org/uk/api-explorer) and [US](http://policyengine.org/us/api-explorer) to explore core components of our API: variables and policy parameters. +Most of our users interact with PolicyEngine via our [UK](http://legacy.policyengine.org/uk) and [US](http://legacy.policyengine.org/us) web apps, where they enter household information and policy reforms to compute the impact of customisable tax and benefit policy. We’ve also made this information available to developers through our [Python](http://openfisca.us) [packages](http://openfisca.uk) and [web API](https://docs.google.com/document/u/1/d/1y-kRDOssYyRwEVTsntqGxoBtvFS4HKMQD-U0Ga9YzJE/preview). Today, we’re launching companion tools in the [UK](http://legacy.policyengine.org/uk/api-explorer) and [US](http://legacy.policyengine.org/us/api-explorer) to explore core components of our API: variables and policy parameters. ## What the PolicyEngine API does Anything you can do with the PolicyEngine app, you can do with our API. Here are some examples: -1. Get parameters in our tax-benefit model, along with details about their current value, their data type and their descriptions ([policyengine.org/uk/parameters](https://policyengine.org/uk/parameters)) +1. Get parameters in our tax-benefit model, along with details about their current value, their data type and their descriptions ([policyengine.org/uk/parameters](https://legacy.policyengine.org/uk/parameters)) -1. Get variables in our tax-benefit model, along with details about their current value, their data type and their descriptions ([policyengine.org/uk/parameters](https://policyengine.org/uk/parameters)) +1. Get variables in our tax-benefit model, along with details about their current value, their data type and their descriptions ([policyengine.org/uk/parameters](https://legacy.policyengine.org/uk/parameters)) -1. Calculate tax-benefit variables for a given household ([policyengine.org/us/calculate](https://policyengine.org/uk/calculate)) +1. Calculate tax-benefit variables for a given household ([policyengine.org/us/calculate](https://legacy.policyengine.org/uk/calculate)) ![*A [Google Colab notebook](https://colab.research.google.com/drive/1dvmYfLKwDWLnn3gJyqmQmVTw3VQ7Qx-a?usp=sharing) showing how to use PolicyEngine’s /us/calculate endpoint to calculate a household’s Supplemental Nutrition Assistance Program benefit based on their employment income.*](https://cdn-images-1.medium.com/max/2000/0*gtH3HDNHXxtFKrlN)A [Google Colab notebook](https://colab.research.google.com/drive/1dvmYfLKwDWLnn3gJyqmQmVTw3VQ7Qx-a?usp=sharing) showing how to use PolicyEngine’s /us/calculate endpoint to calculate a household’s Supplemental Nutrition Assistance Program benefit based on their employment income. -Using this requires knowing the variables and parameters available, and what they represent. Until now, API users had to extract all of them, or consult our [openfisca-us](http://github.com/policyengine/openfisca-us) or [openfisca-uk](http://github.com/policyengine/openfisca-uk) repos. Now, it’s as simple as searching in [policyengine.org/uk/api-explorer](https://policyengine.org/uk/api-explorer) or [policyengine.org/us/api-explorer](https://policyengine.org/us/api-explorer). +Using this requires knowing the variables and parameters available, and what they represent. Until now, API users had to extract all of them, or consult our [openfisca-us](http://github.com/policyengine/openfisca-us) or [openfisca-uk](http://github.com/policyengine/openfisca-uk) repos. Now, it’s as simple as searching in [policyengine.org/uk/api-explorer](https://legacy.policyengine.org/uk/api-explorer) or [policyengine.org/us/api-explorer](https://legacy.policyengine.org/us/api-explorer). ## The API explorer -Inspired by other OpenFisca country models (for example, [OpenFisca-France’s legislation explorer](https://legislation.fr.openfisca.org/)), [policyengine.org/uk/api-explorer](https://policyengine.org/uk/api-explorer) and [policyengine.org/us/api-explorer](https://policyengine.org/us/api-explorer) display metadata for any variable or policy parameter. +Inspired by other OpenFisca country models (for example, [OpenFisca-France’s legislation explorer](https://legislation.fr.openfisca.org/)), [policyengine.org/uk/api-explorer](https://legacy.policyengine.org/uk/api-explorer) and [policyengine.org/us/api-explorer](https://legacy.policyengine.org/us/api-explorer) display metadata for any variable or policy parameter. The API explorer includes a search interface, which lists variables and parameters with similar names. Selecting one provides detail about it on the right, such as the entity, period, and default value for variables. -![*PolicyEngine’s [US API explorer](https://policyengine.org/us/api-explorer/snap) after searching for “snap” and selecting the snap variable.*](https://cdn-images-1.medium.com/max/3200/0*Z4p3pNn8Lt08PIXd)PolicyEngine’s [US API explorer](https://policyengine.org/us/api-explorer/snap) after searching for “snap” and selecting the snap variable. +![*PolicyEngine’s [US API explorer](https://legacy.policyengine.org/us/api-explorer/snap) after searching for “snap” and selecting the snap variable.*](https://cdn-images-1.medium.com/max/3200/0*Z4p3pNn8Lt08PIXd)PolicyEngine’s [US API explorer](https://legacy.policyengine.org/us/api-explorer/snap) after searching for “snap” and selecting the snap variable. For parameters, the API explorer shows the description, the location in the Python package’s parameter tree, and the current value. -![*PolicyEngine’s [UK API explorer](https://policyengine.org/uk/api-explorer/personal_allowance) after searching for “personal allowance” and selecting the personal_allowance parameter.*](https://cdn-images-1.medium.com/max/3200/0*K1vybVl3GOAxJrva)PolicyEngine’s [UK API explorer](https://policyengine.org/uk/api-explorer/personal_allowance) after searching for “personal allowance” and selecting the personal_allowance parameter. +![*PolicyEngine’s [UK API explorer](https://legacy.policyengine.org/uk/api-explorer/personal_allowance) after searching for “personal allowance” and selecting the personal_allowance parameter.*](https://cdn-images-1.medium.com/max/3200/0*K1vybVl3GOAxJrva)PolicyEngine’s [UK API explorer](https://legacy.policyengine.org/uk/api-explorer/personal_allowance) after searching for “personal allowance” and selecting the personal_allowance parameter. If you’d like to use the PolicyEngine API, please [get in touch](mailto:hello@policyengine.org). We’re excited to see what new products developers build using our open-source tax-benefit models! diff --git a/src/posts/articles/how-machine-learning-tools-make-policyengine-more-accurate.md b/src/posts/articles/how-machine-learning-tools-make-policyengine-more-accurate.md index cd2870906..da728a168 100644 --- a/src/posts/articles/how-machine-learning-tools-make-policyengine-more-accurate.md +++ b/src/posts/articles/how-machine-learning-tools-make-policyengine-more-accurate.md @@ -94,7 +94,7 @@ Our relative errors are highest for the smallest benefit programs (those with le ## Where we go from here -We’ve published [our weights on GitHub](https://github.com/PolicyEngine/openfisca-uk/tree/master/data/weights) for other analysts and microsimulation modellers to use, [documented our approach with interactive visualisations](https://policyengine.github.io/openfisca-uk//model/reweighting.html), and effective today, updated [PolicyEngine UK](https://policyengine.org/uk) to use the new weights. In the future, we’ll refine and extend our weights with more targets, mid-year adjustments, and multi-year extrapolations. +We’ve published [our weights on GitHub](https://github.com/PolicyEngine/openfisca-uk/tree/master/data/weights) for other analysts and microsimulation modellers to use, [documented our approach with interactive visualisations](https://policyengine.github.io/openfisca-uk//model/reweighting.html), and effective today, updated [PolicyEngine UK](https://legacy.policyengine.org/uk) to use the new weights. In the future, we’ll refine and extend our weights with more targets, mid-year adjustments, and multi-year extrapolations. We will also continue to develop other ways of enhancing PolicyEngine with state-of-the-art data science. For example, we are continuing to invest in our [machine learning-based synthimpute technology](http://blog.pslmodels.org/demo-day-22-synthimpute) to fuse variables from other surveys, such as wealth from the Wealth and Assets Survey and consumption from the Living Costs and Food Survey, to model a broader range of policy reforms. diff --git a/src/posts/articles/how-to-simulate-basic-and-guaranteed-income-policies-in-policyengine-us.md b/src/posts/articles/how-to-simulate-basic-and-guaranteed-income-policies-in-policyengine-us.md index 028b40080..28488efb5 100644 --- a/src/posts/articles/how-to-simulate-basic-and-guaranteed-income-policies-in-policyengine-us.md +++ b/src/posts/articles/how-to-simulate-basic-and-guaranteed-income-policies-in-policyengine-us.md @@ -2,7 +2,7 @@ _The [UBI Center](http://ubicenter.org) contributed basic income policy paramete With PolicyEngine US, you can adjust hundreds of parameters defining federal and state tax and benefit programs, and then compute how adjusting those programs would affect society and households. But did you know you can also model policies that don’t currently exist, like basic income? -To define policies that don’t exist, scroll past the _Simulation, US government_, and _State government_ parameter menus in our [_Policy_ page](http://policyengine.org/us/policy) and select _Third party_. Here you’ll find third-party-contributed policy parameters. Currently that includes _Congress_, which shows parameters that characterize the End Child Poverty Act (more on that below), and _UBI Center_,¹ which shows parameters that characterize basic or guaranteed income policies (we use the term _basic income_). Before it was signed into law, we characterized policies in the Inflation Reduction Act in the _Third party > Congress_ menu, too. +To define policies that don’t exist, scroll past the _Simulation, US government_, and _State government_ parameter menus in our [_Policy_ page](http://legacy.policyengine.org/us/policy) and select _Third party_. Here you’ll find third-party-contributed policy parameters. Currently that includes _Congress_, which shows parameters that characterize the End Child Poverty Act (more on that below), and _UBI Center_,¹ which shows parameters that characterize basic or guaranteed income policies (we use the term _basic income_). Before it was signed into law, we characterized policies in the Inflation Reduction Act in the _Third party > Congress_ menu, too. ![Part of PolicyEngine’s basic income parameter menu from a mobile device.](https://cdn-images-1.medium.com/max/2000/1*-OToQxH1XvFoz4nqT73DXA.png)_Part of PolicyEngine’s basic income parameter menu from a mobile device._ @@ -30,7 +30,7 @@ To simulate that policy nationwide, enter 1114 in the top _Basic income_ paramet ![](https://cdn-images-1.medium.com/max/3200/0*eqOCDQgqARfOKWf2) -[See the impact of a $1,114 per person payment in PolicyEngine here.](https://policyengine.org/us/population-impact?bi_amount=1114) +[See the impact of a $1,114 per person payment in PolicyEngine here.](https://legacy.policyengine.org/us/population-impact?bi_amount=1114) ## Age-dependent basic income @@ -66,7 +66,7 @@ To model the basic income for children, skip the first basic income amount and e You can use the _Third party > Congress > House > Rep Tlaib_ parameter menus to specify provisions 2 and 3, and the _US government > IRS > Credits > {Child, Earned income} tax credit > General_ parameter menus to specify provision 4. -[See the End Child Poverty Act in PolicyEngine here.](https://policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720) +[See the End Child Poverty Act in PolicyEngine here.](https://legacy.policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720) [This blog post](https://blog.policyengine.org/the-new-policyengine-us-population-impact-page-de68cb4ba71a) describes population-level results of the End Child Poverty Act in PolicyEngine. Numbers differ slightly as we’ve since updated from 2020 to 2021 data. @@ -86,7 +86,7 @@ Then enter 50 in the _Basic income phase-out rate_ box in the _Phase-out_ menu. ![](https://cdn-images-1.medium.com/max/5880/1*aCzYTQ5LzMtutKHHQePGBg.png) -[See the above-described version of the Seed Money Act in PolicyEngine here.³](https://policyengine.org/us/population-impact?bi_fpg_percent=100&bi_phase_out_rate=50) +[See the above-described version of the Seed Money Act in PolicyEngine here.³](https://legacy.policyengine.org/us/population-impact?bi_fpg_percent=100&bi_phase_out_rate=50) ## Phasing out basic income over an income range @@ -120,7 +120,7 @@ Your screen should look like this once this step is complete: Then define the basic income amounts ($4,500 for the two child categories and $12,500 for the three adult categories) and repeal the EITC using the steps from the End Child Poverty Act section of this post. -[See Guaranteed Income for the 21st Century in PolicyEngine here.](https://policyengine.org/us/population-impact?young_child_bi=4500&older_child_bi=4500&young_adult_bi=12500&older_adult_bi=12500&senior_bi=12500&bi_phase_out_threshold_HEAD_OF_HOUSEHOLD=10000&bi_phase_out_threshold_JOINT=15000&bi_phase_out_threshold_SEPARATE=10000&bi_phase_out_threshold_SINGLE=10000&bi_phase_out_threshold_WIDOW=10000&bi_phase_out_by_rate=0&bi_phase_out_end_HEAD_OF_HOUSEHOLD=50000&bi_phase_out_end_JOINT=70000&bi_phase_out_end_SEPARATE=50000&bi_phase_out_end_SINGLE=50000&bi_phase_out_end_WIDOW=50000&abolish_eitc=1&older_adult_bi_amount=12500&older_child_bi_amount=4500&senior_bi_amount=12500&young_adult_bi_amount=12500&young_child_bi_amount=4500) +[See Guaranteed Income for the 21st Century in PolicyEngine here.](https://legacy.policyengine.org/us/population-impact?young_child_bi=4500&older_child_bi=4500&young_adult_bi=12500&older_adult_bi=12500&senior_bi=12500&bi_phase_out_threshold_HEAD_OF_HOUSEHOLD=10000&bi_phase_out_threshold_JOINT=15000&bi_phase_out_threshold_SEPARATE=10000&bi_phase_out_threshold_SINGLE=10000&bi_phase_out_threshold_WIDOW=10000&bi_phase_out_by_rate=0&bi_phase_out_end_HEAD_OF_HOUSEHOLD=50000&bi_phase_out_end_JOINT=70000&bi_phase_out_end_SEPARATE=50000&bi_phase_out_end_SINGLE=50000&bi_phase_out_end_WIDOW=50000&abolish_eitc=1&older_adult_bi_amount=12500&older_child_bi_amount=4500&senior_bi_amount=12500&young_adult_bi_amount=12500&young_child_bi_amount=4500) Through these four policies, we’ve shown how to use PolicyEngine to compute the impact of basic income policies that vary in their amounts, age distribution, and phase-out. PolicyEngine has more controls we haven’t covered, like setting hard income limits (with no phase-out) and making the payments taxable. diff --git a/src/posts/articles/how-would-reforms-affect-cliffs.md b/src/posts/articles/how-would-reforms-affect-cliffs.md index b63f13ff3..5388ffbba 100644 --- a/src/posts/articles/how-would-reforms-affect-cliffs.md +++ b/src/posts/articles/how-would-reforms-affect-cliffs.md @@ -6,23 +6,23 @@ The _cliff_ (a.k.a. _benefit cliff_ or _welfare cliff_) is a phenomenon that occ PolicyEngine now shows how policy reforms can avoid these cliffs. Our free and open source web app uses a comprehensive microsimulation model to compute the effects of customizable tax and benefit reforms on society and individual households. -With the [launch of the new PolicyEngine interface](https://policyengine.org/us/blog/the-new-policyengine), we have added two new measures that can be used to assess the prevalence and severity of cliffs under a given policy regime. These measures allow analysts to easily summarize the effects of custom reforms on cliffs across society. +With the [launch of the new PolicyEngine interface](https://legacy.policyengine.org/us/blog/the-new-policyengine), we have added two new measures that can be used to assess the prevalence and severity of cliffs under a given policy regime. These measures allow analysts to easily summarize the effects of custom reforms on cliffs across society. This post examines the impact of current policy on the creation of cliffs at the household and population levels. The post also discusses how we measure the prevalence and severity of cliffs and presents a series of three policy experiments designed to reduce their occurrence. These experiments can provide valuable insights into the effectiveness of different reform measures and help the policy community develop more effective strategies for addressing cliffs. ## How current law creates cliffs -Users can enter their household information at [policyengine.org/us/household](http://policyengine.org/us/household) to compute their net income after taxes and benefits under current law. For example, below (left) is the result for a [single parent of a blind child in New York with $20,000 wages](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=1411) (users can expand or collapse elements). +Users can enter their household information at [policyengine.org/us/household](http://legacy.policyengine.org/us/household) to compute their net income after taxes and benefits under current law. For example, below (left) is the result for a [single parent of a blind child in New York with $20,000 wages](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=1411) (users can expand or collapse elements). ![](https://cdn-images-1.medium.com/max/3200/0*ea-iCNObVVa3blyM) -Users can also view a chart of their [net income](https://policyengine.org/us/household?focus=householdOutput.earnings&household=1411) (after taxes and benefits) with respect to their earnings (above, center). We shade the earnings region where they would be worse off due to cliffs: we informally call this the “earnings dead zone”. +Users can also view a chart of their [net income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=1411) (after taxes and benefits) with respect to their earnings (above, center). We shade the earnings region where they would be worse off due to cliffs: we informally call this the “earnings dead zone”. -We also express cliffs as spikes in the [marginal tax rate chart](https://policyengine.org/us/household?focus=householdOutput.mtr&household=1411) (above, right). +We also express cliffs as spikes in the [marginal tax rate chart](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&household=1411) (above, right). ## How reforms affect cliffs for individual households -PolicyEngine US lets users adjust hundreds of policy parameters governing federal and state tax and benefit programs. For example, [this page](https://policyengine.org/us/policy?reform=12&focus=gov.ssa.ssi.income.exclusions.earned_share®ion=us&timePeriod=2022&baseline=2) shows a policy experiment we consider in more detail below. +PolicyEngine US lets users adjust hundreds of policy parameters governing federal and state tax and benefit programs. For example, [this page](https://legacy.policyengine.org/us/policy?reform=12&focus=gov.ssa.ssi.income.exclusions.earned_share®ion=us&timePeriod=2022&baseline=2) shows a policy experiment we consider in more detail below. ![](https://cdn-images-1.medium.com/max/3200/0*xRJCp7bnW-lab73G) @@ -52,7 +52,7 @@ We use the _cliff_ nomenclature because both tax and benefit programs can create Currently, we estimate that 0.5% of households face a cliff in 2023, producing a total cliff gap of $5.0 billion. In 2022, 1.7% of households faced a cliff, producing a cliff gap of $18.5 billion. The repeal of SNAP emergency allotments, scheduled for March 2023, reduces the prevalence of cliffs in 2023, as we discuss more below. -## Experiment 1: [Increase the SSI earned income exclusion](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&household=1411®ion=us&timePeriod=2023&baseline=2&reform=3183) +## Experiment 1: [Increase the SSI earned income exclusion](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&household=1411®ion=us&timePeriod=2023&baseline=2&reform=3183) We can now answer the question we previously posed: given our SSI reform creates some cliffs and removes others, how does it affect total cliffs? @@ -64,11 +64,11 @@ Increasing the earned income exclusion to 75% effectively reduces SSI’s MTR to See Appendix B for caveats around PolicyEngine’s SSI microsimulation model. -## Experiment 2: [Repeal SNAP emergency allotments](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3335®ion=us&timePeriod=2023&baseline=2) +## Experiment 2: [Repeal SNAP emergency allotments](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3335®ion=us&timePeriod=2023&baseline=2) Throughout the pandemic, several states have expanded the Supplemental Nutritional Assistance Program (SNAP) to provide the maximum benefit to eligible households, or an increase of at least $95 per month. While SNAP normally has a cliff due to a minimum allotment ($23 per month in 2023), the emergency allotments significantly expanded the cliff by effectively increasing the minimum allotment to the maximum allotment. -The Consolidated Appropriations Act of 2023 repealed the SNAP emergency allotments, effective March 2023. We have modeled that ([see our process here](https://policyengine.org/us/blog/2022-12-23-updating-policyengine-to-reflect-snap-reform-in-the-omnibus-bill)), making the annual emergency allotments only a sixth as generous as they were in 2022, in the 34 states and DC where they remain in place. +The Consolidated Appropriations Act of 2023 repealed the SNAP emergency allotments, effective March 2023. We have modeled that ([see our process here](https://legacy.policyengine.org/us/blog/2022-12-23-updating-policyengine-to-reflect-snap-reform-in-the-omnibus-bill)), making the annual emergency allotments only a sixth as generous as they were in 2022, in the 34 states and DC where they remain in place. Repealing the SNAP emergency allotments for January and February 2023 would cut the cliff rate by 34%, from 0.5% to 0.3%, and reduce the cliff gap 14.9%, from $5.0 billion to $4.3 billion. @@ -78,7 +78,7 @@ In 2022, when states provided SNAP emergency allotments throughout the year, the ![](https://cdn-images-1.medium.com/max/3200/0*BWzaOy8sULhqP-X3) -## Experiment 3: [Start phasing out Washington’s Working Families Tax Credit at a lower income](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3337®ion=wa&timePeriod=2023&baseline=2) +## Experiment 3: [Start phasing out Washington’s Working Families Tax Credit at a lower income](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3337®ion=wa&timePeriod=2023&baseline=2) Washington’s provides a refundable Working Families Tax Credit, with the amount and structure depending on household size. It starts phasing out at an amount below the end of the federal Earned Income Tax Credit: $2,500 below for families with one child, and $5,000 below for those with multiple children. This creates [marginal tax rates ranging from 12% to 24%](https://policyengine.github.io/policyengine-us//gov/states/wa/tax/income/credits/working-families-tax-credit.html). @@ -92,7 +92,7 @@ Government agencies and nonprofits have expanded their research into cliffs in r ![Impacts of selected reforms on cliffs and other outcomes](https://cdn-images-1.medium.com/max/2756/1*sphHryjtjLOBIRJcX30xvg.png)_Impacts of selected reforms on cliffs and other outcomes_ -However, our cliff measures are only as complete as our microsimulation model. Since we do not yet capture all tax and benefit programs (for example, childcare subsidies, housing subsidies, and state income taxes in most states), we under-report cliffs. Our [data enhancement plan](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) will also improve cliff modeling, especially at the state level where we rely on a small sample of households potentially subject to cliffs. As we improve our model, PolicyEngine will identify more cliffs — and more opportunities to address them. +However, our cliff measures are only as complete as our microsimulation model. Since we do not yet capture all tax and benefit programs (for example, childcare subsidies, housing subsidies, and state income taxes in most states), we under-report cliffs. Our [data enhancement plan](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) will also improve cliff modeling, especially at the state level where we rely on a small sample of households potentially subject to cliffs. As we improve our model, PolicyEngine will identify more cliffs — and more opportunities to address them. Our policy experiments show that cliffs can be averted by making programs either more generous (increasing the SSI earned income exclusion) or less generous (repealing SNAP emergency allotments and phasing out Washington’s Working Families Tax Credit at lower incomes). In these instances, though, reforming programs with explicit cliffs had a much larger impact on cliff prevalence than reforming marginal tax rates. diff --git a/src/posts/articles/idaho-2025-tax-change.ipynb b/src/posts/articles/idaho-2025-tax-change.ipynb index 8e6fd3230..cab95c5fa 100644 --- a/src/posts/articles/idaho-2025-tax-change.ipynb +++ b/src/posts/articles/idaho-2025-tax-change.ipynb @@ -16,7 +16,7 @@ "* Has no effect on the Supplemental Poverty Measure \n", "* Increase the Gini index of inequality by 0.01%\n", "\n", - "*Use PolicyEngine to view the [full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=id&timePeriod=2025&baseline=80392) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=2®ion=id&timePeriod=2025&baseline=80392).*\n", + "*Use PolicyEngine to view the [full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=id&timePeriod=2025&baseline=80392) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=2®ion=id&timePeriod=2025&baseline=80392).*\n", "\n", "[^1]: House Bill 40 also lowered the corporate tax rate to 5.3%, expanded the exemption for military pensions and removed capital gains on precious metals. We did not include these provisions in our analysis.\n", "\n", @@ -132,11 +132,11 @@ "\n", "The two examined income tax changes have different effects on households based on their composition and earnings. Here, we consider some examples, as displayed in Table 2.\n", "\n", - "A childless adult with no earnings [will be unaffected by either tax provision](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52245). Since single filers in Idaho can take a standard deduction of $14,600 and the top marginal tax rate does not go into effect until they have $4,673 of taxable income, a childless adult must earn $19,273 before their net income would be affected by the rate change. Additionally, since a childless adult with no earnings, but who meets [SNAP’s work requirements](https://www.fns.usda.gov/snap/work-requirements) (ex., is participating in a work program at least 80 hours per month), is eligible for SNAP benefits, the increase in grocery tax credit does not change their net income either. They would have to earn over $20,000 to no longer qualify for SNAP and therefore be eligible for the grocery tax credit. \n", + "A childless adult with no earnings [will be unaffected by either tax provision](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52245). Since single filers in Idaho can take a standard deduction of $14,600 and the top marginal tax rate does not go into effect until they have $4,673 of taxable income, a childless adult must earn $19,273 before their net income would be affected by the rate change. Additionally, since a childless adult with no earnings, but who meets [SNAP’s work requirements](https://www.fns.usda.gov/snap/work-requirements) (ex., is participating in a work program at least 80 hours per month), is eligible for SNAP benefits, the increase in grocery tax credit does not change their net income either. They would have to earn over $20,000 to no longer qualify for SNAP and therefore be eligible for the grocery tax credit. \n", "\n", - "A single parent with two kids earning $50,000 annually [will gain $176](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52247). As their income excludes them from SNAP benefits, the household qualifies for the grocery tax credit, which increases by $35 per household member for a total of $105. Since the household's taxable income is subject to the reduced top marginal tax rate, their tax liability is reduced by $71.\n", + "A single parent with two kids earning $50,000 annually [will gain $176](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52247). As their income excludes them from SNAP benefits, the household qualifies for the grocery tax credit, which increases by $35 per household member for a total of $105. Since the household's taxable income is subject to the reduced top marginal tax rate, their tax liability is reduced by $71.\n", "\n", - "Finally, an elderly couple with no children and $200,000 of annual earnings will see their [net income increase by $214](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). Since each spouse was scheduled to receive $140 in grocery credits ($120 plus the $20 aged amount) and will now receive $155 each, their total allotment increases by $30. Additionally, the top marginal rate cut lowers their state income tax liability by $184. " + "Finally, an elderly couple with no children and $200,000 of annual earnings will see their [net income increase by $214](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). Since each spouse was scheduled to receive $140 in grocery credits ($120 plus the $20 aged amount) and will now receive $155 each, their total allotment increases by $30. Additionally, the top marginal rate cut lowers their state income tax liability by $184. " ] }, { @@ -945,9 +945,9 @@ "source": [ "## Statewide Impacts\n", "\n", - "Using PolicyEngine static modeling, lowering Idaho’s top marginal tax rate will reduce state revenues by [$170.4 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=id&timePeriod=2025&baseline=80396) for tax year 2025. Raising the value of the Idaho grocery tax credit will cost [$54.5 million](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=id&timePeriod=2025&baseline=80387). With both policies, the combined state budgetary impact is [$224.9 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252).\n", + "Using PolicyEngine static modeling, lowering Idaho’s top marginal tax rate will reduce state revenues by [$170.4 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=id&timePeriod=2025&baseline=80396) for tax year 2025. Raising the value of the Idaho grocery tax credit will cost [$54.5 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=id&timePeriod=2025&baseline=80387). With both policies, the combined state budgetary impact is [$224.9 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252).\n", "\n", - "87% of residents in Idaho will see [an increase in their net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). The range of residents being net beneficiaries varies based on their income decile. 46% of residents in the lowest income decile will see their net income increase, while 100% in the highest two deciles will see a gain. " + "87% of residents in Idaho will see [an increase in their net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). The range of residents being net beneficiaries varies based on their income decile. 46% of residents in the lowest income decile will see their net income increase, while 100% in the highest two deciles will see a gain. " ] }, { @@ -1303,7 +1303,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "The tax package will provide an [average benefit of $292 per household](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252), ranging from $25 in the bottom income decile to $1,193 in the top decile (as defined by the nationwide income distribution)." + "The tax package will provide an [average benefit of $292 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252), ranging from $25 in the bottom income decile to $1,193 in the top decile (as defined by the nationwide income distribution)." ] }, { @@ -1406,7 +1406,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "The tax changes are projected to have [no effect on poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) or deep poverty while increasing the state’s Gini index of inequality [by 0.01%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). " + "The tax changes are projected to have [no effect on poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) or deep poverty while increasing the state’s Gini index of inequality [by 0.01%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252). " ] }, { @@ -1415,11 +1415,11 @@ "source": [ "## Conclusion\n", "\n", - "The analyzed individual income tax changes from Idaho’s 2025 legislative session will lower state revenues by $224.9 million in 2025, or $292 per household. Households in higher income deciles will benefit more than those in lower income deciles on an [absolute](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) and [relative](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) basis. The bill will not affect the state’s supplemental poverty measure and increase the Gini index of income inequality by 0.01%. \n", + "The analyzed individual income tax changes from Idaho’s 2025 legislative session will lower state revenues by $224.9 million in 2025, or $292 per household. Households in higher income deciles will benefit more than those in lower income deciles on an [absolute](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) and [relative](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=id&timePeriod=2025&baseline=80392&household=52252) basis. The bill will not affect the state’s supplemental poverty measure and increase the Gini index of income inequality by 0.01%. \n", "\n", "As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy.\n", "\n", - "We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms." + "We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms." ] } ], diff --git a/src/posts/articles/impact-of-tax-changes-2025-2026.md b/src/posts/articles/impact-of-tax-changes-2025-2026.md index faf4614d3..7b54a1d93 100644 --- a/src/posts/articles/impact-of-tax-changes-2025-2026.md +++ b/src/posts/articles/impact-of-tax-changes-2025-2026.md @@ -10,21 +10,21 @@ From a combination of temporary reforms expiring and new tax reforms taking effe - The Government has [allowed](https://www.legislation.gov.uk/ukpga/2023/2/section/1) **Stamp Duty Land Tax** nil-rate thresholds to expire to £300,000 (from £425,000) for first-time buyers and £125,000 (from £250,000) for subsequent purchases. These thresholds determine the property value at which SDLT begins to apply. First-time buyers maintain a higher threshold than subsequent purchasers under this reform. This reform is the result of an expiry of a Stamp Duty Land Tax cut announced by then-Chancellor Jeremy Hunt in the Autumn Budget 2023 (expiring 31 March 2025). - The Government [set](https://bills.parliament.uk/bills/3888) the **Employer's National Insurance** rate to 15% with the secondary threshold set to £96.14 (from £175) per week. We assume that the employer NI changes is passed on to employees at 40% in 2025, 50% in 2026, 60% in 2027, and 70% in 2028-2029, with the remainder split between business owners and prices. This reform was announced in the Autumn Budget 2024 and takes effect in April 2025. -- The Government had [set](https://www.legislation.gov.uk/ukpga/2025/8/section/7/enacted) **Capital Gains Tax** rates to [change](https://policyengine.org/uk/research/cgt-autumn-budget) to 18% (from 10%) for basic rate taxpayers and 24% (from 20%) for both higher and additional rate taxpayers. CGT applies to profits from the sale of assets that have increased in value, with various exemptions including primary residences. This reform was in effect from the time of the Autumn Budget, but 2025/26 is the first full tax year of its implementation. +- The Government had [set](https://www.legislation.gov.uk/ukpga/2025/8/section/7/enacted) **Capital Gains Tax** rates to [change](https://legacy.policyengine.org/uk/research/cgt-autumn-budget) to 18% (from 10%) for basic rate taxpayers and 24% (from 20%) for both higher and additional rate taxpayers. CGT applies to profits from the sale of assets that have increased in value, with various exemptions including primary residences. This reform was in effect from the time of the Autumn Budget, but 2025/26 is the first full tax year of its implementation. - Local authorities have [increased](https://www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2025-to-2026/council-tax-levels-set-by-local-authorities-in-england-2025-to-2026#average-council-tax-per-dwelling) **Council Tax** by 6.1% on average from 2024\. This is set by local authorities. These reforms have been announced by councils over the last year. ## Economic impacts We estimate the following revenue impacts for these reforms in 2025/26 (Table 1). For each tax, we include its _static_ revenue impact. This assumes that individuals do not adjust their behaviour in response, representing simply the impact of the change in policy on existing households. -| Reform | 2025 static revenue (£ million) | Average per household (£) | -| :----------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------------------------------------------------------------------------- | :------------------------ | -| Stamp duty: lower first home nil-rate threshold from 425,000 to 300,000 | [150](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=80444&timePeriod=2025®ion=uk) | 5 | -| Stamp duty: lower primary residence nil-rate threshold from 250,000 to 125,000 | [1,200](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=80446&timePeriod=2025®ion=uk) | 43 | -| Capital Gains Tax: raise rates to 18% and 24% | [4,200](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69732®ion=uk&timePeriod=2025&baseline=1) | 150 | -| Council tax: raise by 5% | 3,300 | 117 | -| National Insurance: raise employer rate from 13.8% to 15% and lower threshold | [22,900](https://policyengine.org/uk/policy?reform=69728&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=true) | 818 | -| Total | 31,750 | 1,133 | +| Reform | 2025 static revenue (£ million) | Average per household (£) | +| :----------------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------------------------------------------------------------------- | :------------------------ | +| Stamp duty: lower first home nil-rate threshold from 425,000 to 300,000 | [150](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=80444&timePeriod=2025®ion=uk) | 5 | +| Stamp duty: lower primary residence nil-rate threshold from 250,000 to 125,000 | [1,200](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=80446&timePeriod=2025®ion=uk) | 43 | +| Capital Gains Tax: raise rates to 18% and 24% | [4,200](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=69732®ion=uk&timePeriod=2025&baseline=1) | 150 | +| Council tax: raise by 5% | 3,300 | 117 | +| National Insurance: raise employer rate from 13.8% to 15% and lower threshold | [22,900](https://legacy.policyengine.org/uk/policy?reform=69728&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1&uk_local_areas_beta=true) | 818 | +| Total | 31,750 | 1,133 | Table 1 diff --git a/src/posts/articles/impact-of-the-chancellors-cost-of-living-support-package.md b/src/posts/articles/impact-of-the-chancellors-cost-of-living-support-package.md index 3daa9f11f..00b369ad5 100644 --- a/src/posts/articles/impact-of-the-chancellors-cost-of-living-support-package.md +++ b/src/posts/articles/impact-of-the-chancellors-cost-of-living-support-package.md @@ -14,7 +14,7 @@ Alongside a six-month extension of the Household Support Fund, HM Treasury estim _Skip this section to see the results._ -To accommodate this package, we’ve added a new section to the Benefit menu in the [Policy page](https://policyengine.org/uk/policy), for the _Cost-of-living support payment_. This includes payments to each of the three new household categories: those receiving means tested benefits, those with pensioners (the qualification for receiving Winter Fuel Payment), and those receiving non-means-tested disability benefits. These are set to £0 until they become legislation. +To accommodate this package, we’ve added a new section to the Benefit menu in the [Policy page](https://legacy.policyengine.org/uk/policy), for the _Cost-of-living support payment_. This includes payments to each of the three new household categories: those receiving means tested benefits, those with pensioners (the qualification for receiving Winter Fuel Payment), and those receiving non-means-tested disability benefits. These are set to £0 until they become legislation. ![](https://cdn-images-1.medium.com/max/3200/0*fKtwMJpHA8ua9nti) @@ -30,7 +30,7 @@ This, however, will compare the full £400 against £0. To focus on the addition ![](https://cdn-images-1.medium.com/max/3200/0*ZC3T6NytGLf7n9SM) -If you made it this far, congratulations, you’ve modelled the newly announced Cost of Living Support package! Your URL should look like this: [https://policyengine.org/uk/policy?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200](https://policyengine.org/uk/policy?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200). +If you made it this far, congratulations, you’ve modelled the newly announced Cost of Living Support package! Your URL should look like this: [https://legacy.policyengine.org/uk/policy?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200](https://legacy.policyengine.org/uk/policy?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200). ## Budgetary impact @@ -44,7 +44,7 @@ HM Treasury released an [“Illustrative analysis of the impact of the Cost of L ![](https://cdn-images-1.medium.com/max/3200/0*kNAJvbiWYIkVklP6) -To replicate these results, select England from the Geography menu in the Policy page. Doing so yields [this impact page](https://policyengine.org/uk/population-impact?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200&baseline_country_specific=ENGLAND). +To replicate these results, select England from the Geography menu in the Policy page. Doing so yields [this impact page](https://legacy.policyengine.org/uk/population-impact?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200&baseline_country_specific=ENGLAND). ![](https://cdn-images-1.medium.com/max/3052/0*SIcutajl_eFEU4Mn) @@ -90,4 +90,4 @@ The placement and size of this “earnings dead zone” (the shaded rectangle) d PolicyEngine UK now supports payments to households receiving means-tested benefits, non-means-tested disability benefits, and Winter Fuel Payment. You can set these values to mirror the Chancellor’s announcement, or define your own household payment scheme. Our estimates generally fall within 10% of HM Treasury’s, and we’ve also produced the first poverty and inequality analyses of the package, as well as personalised estimates that reveal welfare cliffs. -To explore the package in more detail, [see our full analysis in PolicyEngine UK](https://policyengine.org/uk/population-impact?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200). +To explore the package in more detail, [see our full analysis in PolicyEngine UK](https://legacy.policyengine.org/uk/population-impact?col_benefit_payment_amount=650&col_disability_payment_amount=150&col_pensioner_payment_amount=300&ebr_energy_bills_credit=400&baseline_ebr_energy_bills_credit=200). diff --git a/src/posts/articles/income-tax-cuts-rishi-sunak-is-reportedly-considering.md b/src/posts/articles/income-tax-cuts-rishi-sunak-is-reportedly-considering.md index c846dfb3d..c569d4603 100644 --- a/src/posts/articles/income-tax-cuts-rishi-sunak-is-reportedly-considering.md +++ b/src/posts/articles/income-tax-cuts-rishi-sunak-is-reportedly-considering.md @@ -10,7 +10,7 @@ Yesterday, [The Times reported](https://www.thetimes.co.uk/article/rishi-sunaks- - Raising the threshold for inheritance tax, currently £325,000 -PolicyEngine shows that the [combined Income Tax reforms](http://policyengine.org/uk/population-impact?add_rate=40&basic_rate=18) — lowering the basic rate to 18% and scrapping the additional rate — would cost £10.1bn per year, reduce poverty by 0.3%, benefit 71% of the public, and disproportionately increase the income of higher-income households.¹ +PolicyEngine shows that the [combined Income Tax reforms](http://legacy.policyengine.org/uk/population-impact?add_rate=40&basic_rate=18) — lowering the basic rate to 18% and scrapping the additional rate — would cost £10.1bn per year, reduce poverty by 0.3%, benefit 71% of the public, and disproportionately increase the income of higher-income households.¹ ## How Income Tax works @@ -26,15 +26,15 @@ National Insurance and means-tested benefits significantly increase marginal tax ## PolicyEngine results -Navigating to [policyengine.org](https://policyengine.org) shows a *Policy *screen, and the left panel shows _Income tax_ and *Labour income *within that. This presents the tax rates that Sunak is reportedly considering changing. The basic rate can be adjusted at the top, and the additional rate can be repealed by setting the rate to 40% to match the higher rate. +Navigating to [policyengine.org](https://legacy.policyengine.org) shows a *Policy *screen, and the left panel shows _Income tax_ and *Labour income *within that. This presents the tax rates that Sunak is reportedly considering changing. The basic rate can be adjusted at the top, and the additional rate can be repealed by setting the rate to 40% to match the higher rate. ![PolicyEngine](https://cdn-images-1.medium.com/max/3200/0*oG71EhArn_TrWtGP)_PolicyEngine_ -PolicyEngine can show the impact of [lowering the basic rate to 19%](http://policyengine.org/uk/population-impact?basic_rate=19),³ [lowering the basic rate to 18%](http://policyengine.org/uk/population-impact?basic_rate=18), or [repealing the additional rate](http://policyengine.org/uk/population-impact?add_rate=40). It can also model combinations of repealing the additional rate and [also lowering the basic rate to 19%](http://policyengine.org/uk/population-impact?add_rate=40&basic_rate=19) or [also lowering the basic rate to 18%](http://policyengine.org/uk/population-impact?add_rate=40&basic_rate=18). The table below summarizes these five policy reforms. +PolicyEngine can show the impact of [lowering the basic rate to 19%](http://legacy.policyengine.org/uk/population-impact?basic_rate=19),³ [lowering the basic rate to 18%](http://legacy.policyengine.org/uk/population-impact?basic_rate=18), or [repealing the additional rate](http://legacy.policyengine.org/uk/population-impact?add_rate=40). It can also model combinations of repealing the additional rate and [also lowering the basic rate to 19%](http://legacy.policyengine.org/uk/population-impact?add_rate=40&basic_rate=19) or [also lowering the basic rate to 18%](http://legacy.policyengine.org/uk/population-impact?add_rate=40&basic_rate=18). The table below summarizes these five policy reforms. -The full combined policy — [lowering the basic rate to 18% and repealing the additional rate](http://policyengine.org/uk/population-impact?add_rate=40&basic_rate=18) — would be regressive, in that it would increase the net income more for higher earners than for lower earners, as a share of income. +The full combined policy — [lowering the basic rate to 18% and repealing the additional rate](http://legacy.policyengine.org/uk/population-impact?add_rate=40&basic_rate=18) — would be regressive, in that it would increase the net income more for higher earners than for lower earners, as a share of income. ![PolicyEngine](https://cdn-images-1.medium.com/max/3200/0*qU6Vy-7GSFaZkB6x)_PolicyEngine_ @@ -50,6 +50,6 @@ For more results such as intra-decile charts, poverty rates by age, and net inco [2] To produce an Income Tax-only marginal tax rate chart in PolicyEngine, toggle all *Would claim [benefit] *switches off, and set the person’s age to 70 to exempt them from National Insurance. -[3] The Times estimated that a “1p cut in the basic rate of tax would cost about £6 billion a year”. This may refer to [HMRC’s estimate](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2021) that adjusting the basic rate by 1p would change revenues by 5.75bn in 2023–2024 and in 2024–2025. It may also, erroneously, trace to the [Liberal Democrats’ 2017 Manifesto](https://d3n8a8pro7vhmx.cloudfront.net/libdems/pages/1811/attachments/original/1515517284/2017_Manifesto.pdf?1515517284#page=19), which calls for a “1p rise on the basic, higher and additional rates of Income Tax to raise £6 billion”. PolicyEngine estimates that [raising each rate by 1p](http://policyengine.org/uk/population-impact?add_rate=46&basic_rate=21&higher_rate=41) would raise 5.9bn. But, in line with our 4.4bn estimate for raising only the basic rate, [HMRC estimates](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2021) that adjusting the basic rate by 1p would change revenues by 4.7bn in 2022–2023 (HMRC also does not adjust Scottish taxes in this analysis, and unlike PolicyEngine, they also do not adjust Welsh taxes). +[3] The Times estimated that a “1p cut in the basic rate of tax would cost about £6 billion a year”. This may refer to [HMRC’s estimate](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2021) that adjusting the basic rate by 1p would change revenues by 5.75bn in 2023–2024 and in 2024–2025. It may also, erroneously, trace to the [Liberal Democrats’ 2017 Manifesto](https://d3n8a8pro7vhmx.cloudfront.net/libdems/pages/1811/attachments/original/1515517284/2017_Manifesto.pdf?1515517284#page=19), which calls for a “1p rise on the basic, higher and additional rates of Income Tax to raise £6 billion”. PolicyEngine estimates that [raising each rate by 1p](http://legacy.policyengine.org/uk/population-impact?add_rate=46&basic_rate=21&higher_rate=41) would raise 5.9bn. But, in line with our 4.4bn estimate for raising only the basic rate, [HMRC estimates](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2021) that adjusting the basic rate by 1p would change revenues by 4.7bn in 2022–2023 (HMRC also does not adjust Scottish taxes in this analysis, and unlike PolicyEngine, they also do not adjust Welsh taxes). _Updated 2021–12–06 to incorporate Autumn Budget Universal Credit reforms to the baseline policy._ diff --git a/src/posts/articles/income-tax-freeze.md b/src/posts/articles/income-tax-freeze.md index 4860aa0cf..830089d18 100644 --- a/src/posts/articles/income-tax-freeze.md +++ b/src/posts/articles/income-tax-freeze.md @@ -1,6 +1,6 @@ _Credit: HM Treasury_ -[See the full impacts on PolicyEngine here in 2028](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=68997®ion=uk&timePeriod=2028&baseline=1) and [2029](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=68997®ion=uk&timePeriod=2029&baseline=1). +[See the full impacts on PolicyEngine here in 2028](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=68997®ion=uk&timePeriod=2028&baseline=1) and [2029](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=68997®ion=uk&timePeriod=2029&baseline=1). The Resolution Foundation on Monday 17th March [proposed](https://www.resolutionfoundation.org/press-releases/chancellor-needs-take-action-to-balance-the-books/) extending the freeze on the income tax personal allowance and higher rate threshold for an additional two years. This policy would raise over £12 billion in tax revenue and would affect taxpayers across all income groups. diff --git a/src/posts/articles/introducing-2024-election-calculator.md b/src/posts/articles/introducing-2024-election-calculator.md index 8f68af3ed..24b05d62b 100644 --- a/src/posts/articles/introducing-2024-election-calculator.md +++ b/src/posts/articles/introducing-2024-election-calculator.md @@ -1,4 +1,4 @@ -Try our [**2024 election calculator**](https://policyengine.org/us/2024-election-calculator) to see how Harris and Trump’s proposed policies would affect your household’s finances. Enter your family details, income sources, and spending patterns to get personalized estimates. +Try our [**2024 election calculator**](https://legacy.policyengine.org/us/2024-election-calculator) to see how Harris and Trump’s proposed policies would affect your household’s finances. Enter your family details, income sources, and spending patterns to get personalized estimates. Read on for a few examples of our new tool in action. @@ -76,6 +76,6 @@ The examples demonstrate impacts ranging from changes of a few hundred dollars t ## Calculate your household’s results -Try our [2024 election calculator](https://policyengine.org/us/2024-election-calculator) to see how these proposals would affect your household finances. Enter your details to get a personalized breakdown of policy impacts. +Try our [2024 election calculator](https://legacy.policyengine.org/us/2024-election-calculator) to see how these proposals would affect your household finances. Enter your details to get a personalized breakdown of policy impacts. _Note: All calculations use projected 2025 tax parameters and currently available policy proposals. The calculator uses the PolicyEngine US microsimulation model and updates as new policy details emerge. Actual impacts could vary based on final policy design, implementation timeline, and behavioral responses (such as changes in import spending patterns in response to tariffs)._ diff --git a/src/posts/articles/introducing-obbba-household-explorer.md b/src/posts/articles/introducing-obbba-household-explorer.md index 596cb24cc..74e5994e7 100644 --- a/src/posts/articles/introducing-obbba-household-explorer.md +++ b/src/posts/articles/introducing-obbba-household-explorer.md @@ -4,7 +4,7 @@ Following the Senate's July 1st passage of the One Big Beautiful Bill Act (OBBBA ## What the tool does -The OBBBA Household Explorer allows users to explore the bill’s impacts on over 40,000 representative households from PolicyEngine’s [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta) (CPS) dataset. This dataset integrates and calibrates multiple data sources using machine learning techniques — the same foundation that powers PolicyEngine’s simulations of policy effects on poverty, inequality, and government budgets, when paired with our comprehensive model of federal, state, and local income tax and benefit programs. +The OBBBA Household Explorer allows users to explore the bill’s impacts on over 40,000 representative households from PolicyEngine’s [Enhanced Current Population Survey](https://legacy.policyengine.org/us/research/enhanced-cps-beta) (CPS) dataset. This dataset integrates and calibrates multiple data sources using machine learning techniques — the same foundation that powers PolicyEngine’s simulations of policy effects on poverty, inequality, and government budgets, when paired with our comprehensive model of federal, state, and local income tax and benefit programs. The OBBBA extends provisions of the 2017 Tax Cuts and Jobs Act set to expire at the end of 2025, while introducing new elements including: diff --git a/src/posts/articles/introducing-salternative.md b/src/posts/articles/introducing-salternative.md index 97411cd84..2441921b6 100644 --- a/src/posts/articles/introducing-salternative.md +++ b/src/posts/articles/introducing-salternative.md @@ -6,7 +6,7 @@ Today we’re excited to launch **SALTernative**, a free web app that lets anyon - **Individual households’ net income**, effective SALT caps, and property‑tax subsidy rates -You can start exploring right now at [**policyengine.org/us/salternative**](https://policyengine.org/us/salternative). +You can start exploring right now at [**policyengine.org/us/salternative**](https://legacy.policyengine.org/us/salternative). ## Why a SALT + AMT model, and why now? @@ -46,7 +46,7 @@ We’ll walk through live demos, answer technical questions, and discuss how ana ## Get started -1. Head to [**policyengine.org/us/salternative**](https://policyengine.org/us/salternative). +1. Head to [**policyengine.org/us/salternative**](https://legacy.policyengine.org/us/salternative). 1. Choose a baseline, adjust SALT and AMT settings, and watch the charts update. diff --git a/src/posts/articles/introducing-utah-state-income-tax-analysis-on-policyengine.md b/src/posts/articles/introducing-utah-state-income-tax-analysis-on-policyengine.md index 4a53159f0..8957e1ae3 100644 --- a/src/posts/articles/introducing-utah-state-income-tax-analysis-on-policyengine.md +++ b/src/posts/articles/introducing-utah-state-income-tax-analysis-on-policyengine.md @@ -82,7 +82,7 @@ Parents of children under 12 months can claim the at-home parent credit if: - The adjusted gross income of the tax unit is less than $50,000 -The value of the credit is $100 per qualifying child. The income cutoffs create a small [cliff effect](https://policyengine.org/us/blog/how-would-reforms-affect-cliffs)- any rise in income over either income limit imposes an instant $100 tax increase, regardless of the size of the rise in income. +The value of the credit is $100 per qualifying child. The income cutoffs create a small [cliff effect](https://legacy.policyengine.org/us/blog/how-would-reforms-affect-cliffs)- any rise in income over either income limit imposes an instant $100 tax increase, regardless of the size of the rise in income. ## Marginal tax rates @@ -98,17 +98,17 @@ The integration of the Utah State income tax code into PolicyEngine allows users Utah’s headline tax rate is currently 4.85%, but has seen reforms over recent years. Using PolicyEngine’s economic impact calculator, we can estimate the revenue impacts of small and large changes to the tax rate, shown below. -| **Tax rate** | **Tax rate change** | **Revenue impact** | **Average gain per household** | **PolicyEngine link** | -| ------------ | ------------------- | ------------------ | ------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------- | -| 3.85% | -1pp | -$1.1bn | $1,036 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10724®ion=ut&timePeriod=2023&baseline=2) | -| 4.35% | -0.5pp | -$573m | $518 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10723®ion=ut&timePeriod=2023&baseline=2) | -| 4.75% | -0.1pp | -$115m | $104 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10722®ion=ut&timePeriod=2023&baseline=2) | -| **4.85%** | **No change** | **No change** | **No change** | **Current law** | -| 4.95% | +0.1pp | +$115m | -$104 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10613®ion=ut&timePeriod=2023&baseline=2) | -| 5.35% | +0.5pp | +$572m | $518 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10720®ion=ut&timePeriod=2023&baseline=2) | -| 5.85% | +1pp | +$1.1bn | $1,035 | [See on PolicyEngine](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10721®ion=ut&timePeriod=2023&baseline=2) | - -Because PolicyEngine uses a household survey, its revenue impacts are around a third lower than official estimates which use administrative tax datasets (which are less likely to miss out high-income filers). Our [planned data enhancement process](https://policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) will improve accuracy up to the level of administrative datasets later this year. +| **Tax rate** | **Tax rate change** | **Revenue impact** | **Average gain per household** | **PolicyEngine link** | +| ------------ | ------------------- | ------------------ | ------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------- | +| 3.85% | -1pp | -$1.1bn | $1,036 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10724®ion=ut&timePeriod=2023&baseline=2) | +| 4.35% | -0.5pp | -$573m | $518 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10723®ion=ut&timePeriod=2023&baseline=2) | +| 4.75% | -0.1pp | -$115m | $104 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10722®ion=ut&timePeriod=2023&baseline=2) | +| **4.85%** | **No change** | **No change** | **No change** | **Current law** | +| 4.95% | +0.1pp | +$115m | -$104 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10613®ion=ut&timePeriod=2023&baseline=2) | +| 5.35% | +0.5pp | +$572m | $518 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10720®ion=ut&timePeriod=2023&baseline=2) | +| 5.85% | +1pp | +$1.1bn | $1,035 | [See on PolicyEngine](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=10721®ion=ut&timePeriod=2023&baseline=2) | + +Because PolicyEngine uses a household survey, its revenue impacts are around a third lower than official estimates which use administrative tax datasets (which are less likely to miss out high-income filers). Our [planned data enhancement process](https://legacy.policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) will improve accuracy up to the level of administrative datasets later this year. ## Try it out diff --git a/src/posts/articles/kansas-flat-income-tax-sb-169.md b/src/posts/articles/kansas-flat-income-tax-sb-169.md index 887204293..24db50d3f 100644 --- a/src/posts/articles/kansas-flat-income-tax-sb-169.md +++ b/src/posts/articles/kansas-flat-income-tax-sb-169.md @@ -1,8 +1,8 @@ Following the [Kansas state house passing](https://fastdemocracy.com/bill-search/ks/2023-2024/bills/KSB00009649/) [Senate Bill 169](http://www.kslegislature.org/li/b2023_24/measures/documents/sb169_02_0000.pdf) last week, Governor Laura Kelly today [vetoed](https://www.kcur.org/news/2023-04-24/kansas-governor-vetoes-huge-a-tax-relief-plan-saying-its-flat-tax-favors-the-rich) the tax reform legislation. SB169 would have replaced its three-bracket income tax to a single 5.25% rate, making it the sixth state to enact legislation [converting to a flat income tax structure](https://taxfoundation.org/flat-tax-state-income-tax-reform/). The bill also has provisions that affect corporate, sales, property, and bank taxes, as well as several exemptions, deductions, and credits. -This post examines the details of these reforms and [PolicyEngine’s forecasted impacts](https://policyengine.org/us/policy?focus=policyOutput.netIncome®ion=ks&timePeriod=2023&baseline=2&reform=8918) of implementing SB 169 in the current tax year. +This post examines the details of these reforms and [PolicyEngine’s forecasted impacts](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome®ion=ks&timePeriod=2023&baseline=2&reform=8918) of implementing SB 169 in the current tax year. -[See how SB 169 would affect your household with PolicyEngine’s personalized calculator.](https://policyengine.org/us/household?focus=intro®ion=ks&timePeriod=2023&baseline=2&reform=8918) +[See how SB 169 would affect your household with PolicyEngine’s personalized calculator.](https://legacy.policyengine.org/us/household?focus=intro®ion=ks&timePeriod=2023&baseline=2&reform=8918) ## How would SB169 change Kansas’s tax system, and how much does PolicyEngine model? @@ -31,17 +31,17 @@ SB169 would enact nine changes to the tax system. Below we list them, and also n 1. **Reduce the tax rate on banks.** _Not modeled._ -PolicyEngine’s limitations may result in our understating the net income benefits to Kansans and the state revenue losses from implementing SB169. Beyond the policies we do not model, our reliance on the Current Population Survey creates inaccuracies that we [intend to remedy later this year](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis). +PolicyEngine’s limitations may result in our understating the net income benefits to Kansans and the state revenue losses from implementing SB169. Beyond the policies we do not model, our reliance on the Current Population Survey creates inaccuracies that we [intend to remedy later this year](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis). ## How would SB169 affect individual households? To explore the effect of SB169 on individuals, we will examine three different sample households: a single 55-year-old, a family of four, and a 70-year-old who receives Social Security. -For an able-bodied single 55-year-old with no dependents, the bill would [increase their net income](https://policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) if they earn less than $16,500 annually or greater than $30,000 annually. Between these two earnings levels, SB169 causes losses of up to $100 of net income due to the bill eliminating the [food sales tax credit](https://www.kansas.gov/kdor/webfile/help/modal-food-sales-credit-details.html#:~:text=The%20amount%20of%20credit%20is,exemption%20for%20Head%20of%20Household).) (FSTC) that currently applies to those with an adjusted gross income (AGI) below $30,615. +For an able-bodied single 55-year-old with no dependents, the bill would [increase their net income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) if they earn less than $16,500 annually or greater than $30,000 annually. Between these two earnings levels, SB169 causes losses of up to $100 of net income due to the bill eliminating the [food sales tax credit](https://www.kansas.gov/kdor/webfile/help/modal-food-sales-credit-details.html#:~:text=The%20amount%20of%20credit%20is,exemption%20for%20Head%20of%20Household).) (FSTC) that currently applies to those with an adjusted gross income (AGI) below $30,615. We must reiterate that our model does not include eliminating the food sales tax, which may counteract some of these losses. A single individual with no dependents earning more than $17,676 annually is [not eligible for SNAP](https://content.dcf.ks.gov/EES/KEESM/Appendix/F-2_FA_Standards.pdf) in Kansas, so their expenditures on unprepared food are [currently taxed](https://www.ksrevenue.gov/pub1223.html) at 4%. SB169 would eliminate this tax, so our model may overstate the net income losses for such individuals earning between $17,676-$30,615 of AGI. -With that in mind, the chart below shows our projected [change in net income](https://policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) for a Kansan with these characteristics at different earning levels. +With that in mind, the chart below shows our projected [change in net income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) for a Kansan with these characteristics at different earning levels. ![](https://cdn-images-1.medium.com/max/2000/1*zs4irO8pZV0D55TycVH9Qw.png) @@ -51,11 +51,11 @@ Currently, a 55-year-old with no dependents between $18,500-$19,500 of AGI faces ![](https://cdn-images-1.medium.com/max/2000/1*qd_RP_kweLSuNuyKTCEoDw.png) -The following chart shows the [percentage point change in marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) for these individuals at different income levels. The difference stabilizes above $36,000 of AGI, reflecting the tax decrease for higher earners who experience no changes to their state benefits. +The following chart shows the [percentage point change in marginal tax rates](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30049) for these individuals at different income levels. The difference stabilizes above $36,000 of AGI, reflecting the tax decrease for higher earners who experience no changes to their state benefits. ![](https://cdn-images-1.medium.com/max/2000/1*gNvnldVmUxMrndZqNToFag.png) -Next, we will consider the impacts of SB169 on a 40-year-old married individual with two children. As shown by the next chart, the bill would [increase or cause no change](https://policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30065) to their net income at all earnings levels. Up to $20,000 of AGI, the bill would have no effect, and if they earn more, they would benefit. (The flat value between $47,000-$77,000 is slightly positive, though close to 0). +Next, we will consider the impacts of SB169 on a 40-year-old married individual with two children. As shown by the next chart, the bill would [increase or cause no change](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30065) to their net income at all earnings levels. Up to $20,000 of AGI, the bill would have no effect, and if they earn more, they would benefit. (The flat value between $47,000-$77,000 is slightly positive, though close to 0). ![](https://cdn-images-1.medium.com/max/2000/1*sqd7AEEDFippG852CY5UWA.png) @@ -63,29 +63,29 @@ However, SB169 would slightly extend a cliff between $39,00-$47,500 for families ![](https://cdn-images-1.medium.com/max/2000/1*4ur6n5R3osxEQzMQEvX7Gw.png) -Next, we will consider the [projected changes in net income](https://policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30070) for a single 70-year-old with no dependents. These effects are almost identical in shape and magnitude to those for a single 55-year-old, as shown by the chart below. This is because we do not model SB169’s expansion of the income tax exemption for Social Security benefits, which would benefit seniors between $75,000-$100,000 of AGI. +Next, we will consider the [projected changes in net income](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings®ion=ks&timePeriod=2023&baseline=2&reform=8918&household=30070) for a single 70-year-old with no dependents. These effects are almost identical in shape and magnitude to those for a single 55-year-old, as shown by the chart below. This is because we do not model SB169’s expansion of the income tax exemption for Social Security benefits, which would benefit seniors between $75,000-$100,000 of AGI. ![](https://cdn-images-1.medium.com/max/2000/1*FCRNnAdNG9MScT9JbFl8wQ.png) ## How would SB169 affect Kansas as a whole? -To simulate the state-wide impacts of SB169 in 2023, navigate to ‘compute the impact of policy reforms’ from PolicyEngine’s homepage, click on ‘find an existing policy,’ select ‘[Kansas SB169 2023](https://policyengine.org/us/policy?focus=gov®ion=ks&timePeriod=2023&baseline=2&reform=8918)’ from the dropdown box, and choose Kansas from the list of states. According to this model, the reform would cost the state [approximately $240 million in lost tax revenue](https://policyengine.org/us/policy?focus=policyOutput.netIncome®ion=ks&timePeriod=2023&baseline=2&reform=8918) and increase the average household’s [net income by $201](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918). +To simulate the state-wide impacts of SB169 in 2023, navigate to ‘compute the impact of policy reforms’ from PolicyEngine’s homepage, click on ‘find an existing policy,’ select ‘[Kansas SB169 2023](https://legacy.policyengine.org/us/policy?focus=gov®ion=ks&timePeriod=2023&baseline=2&reform=8918)’ from the dropdown box, and choose Kansas from the list of states. According to this model, the reform would cost the state [approximately $240 million in lost tax revenue](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome®ion=ks&timePeriod=2023&baseline=2&reform=8918) and increase the average household’s [net income by $201](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918). ![](https://cdn-images-1.medium.com/max/2000/1*QztrXJyJb8iTD3FFKs2-dQ.png) -[In percentage terms](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918), the average change in disposable income also increases for higher earners, ranging from +0.1% for the lowest income decile to +0.5% for the highest income decile. +[In percentage terms](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918), the average change in disposable income also increases for higher earners, ranging from +0.1% for the lowest income decile to +0.5% for the highest income decile. ![](https://cdn-images-1.medium.com/max/2000/1*NzJrJ3JSoAOpWG0kKQ5Gqw.png) -Those benefits would [accrue to households comprising 67%](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) of Kansas’s population. Yet, 0.6% of Kansans would lose out due to SB169, all in the bottom three income deciles. This is likely because the bill eliminates the FSTC. (Again, keep in that our model does not include eliminating the food sales tax itself, which, depending on SNAP eligibility, may counteract some of these losses). +Those benefits would [accrue to households comprising 67%](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) of Kansas’s population. Yet, 0.6% of Kansans would lose out due to SB169, all in the bottom three income deciles. This is likely because the bill eliminates the FSTC. (Again, keep in that our model does not include eliminating the food sales tax itself, which, depending on SNAP eligibility, may counteract some of these losses). ![](https://cdn-images-1.medium.com/max/2000/1*kfhRjwqmheqozjEzJXtwbg.png) -Despite causing gains in net income for many individuals, the bill would not affect [the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) or [deep poverty rate](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) in Kansas. Additionally, although the share of income earned by the top 10% and 1% of earners [will increase due to SB169](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=8918®ion=ks&timePeriod=2023&baseline=2), the Gini index — a measure of income inequality — will remain unchanged. +Despite causing gains in net income for many individuals, the bill would not affect [the poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) or [deep poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact®ion=ks&timePeriod=2023&baseline=2&reform=8918) in Kansas. Additionally, although the share of income earned by the top 10% and 1% of earners [will increase due to SB169](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=8918®ion=ks&timePeriod=2023&baseline=2), the Gini index — a measure of income inequality — will remain unchanged. ![](https://cdn-images-1.medium.com/max/2000/1*d5H7vilV23Ha9r3I-0Yk-w.png) -Lastly, the bill would make cliffs [more prevalent](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=8918®ion=ks&timePeriod=2023&baseline=2). The cliff rate — the share of households whose net income would fall if each adult earned an additional $2,000 — would rise 15.8% from 1.7% to 2%. And the cliff gap — the sum of losses incurred by households on a cliff — would increase by 3.6% from $50.5 million to $52.3 million. +Lastly, the bill would make cliffs [more prevalent](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=8918®ion=ks&timePeriod=2023&baseline=2). The cliff rate — the share of households whose net income would fall if each adult earned an additional $2,000 — would rise 15.8% from 1.7% to 2%. And the cliff gap — the sum of losses incurred by households on a cliff — would increase by 3.6% from $50.5 million to $52.3 million. ![](https://cdn-images-1.medium.com/max/2000/1*ECyeIZGQEBxzqkylYLWxGQ.png) diff --git a/src/posts/articles/kansas-income-tax.md b/src/posts/articles/kansas-income-tax.md index 44d8fd1cd..0196471ed 100644 --- a/src/posts/articles/kansas-income-tax.md +++ b/src/posts/articles/kansas-income-tax.md @@ -1,4 +1,4 @@ -We are excited to announce the addition of the Kansas income tax code to [PolicyEngine US](http://policyengine.org/us)! This update allows users to analyze and understand the tax policies in Kansas, including tax rates, deductions, exemptions, and credits available to Kansas residents. +We are excited to announce the addition of the Kansas income tax code to [PolicyEngine US](http://legacy.policyengine.org/us)! This update allows users to analyze and understand the tax policies in Kansas, including tax rates, deductions, exemptions, and credits available to Kansas residents. ## How Kansas income taxes work diff --git a/src/posts/articles/kentucky-cuts-income-tax-rate.md b/src/posts/articles/kentucky-cuts-income-tax-rate.md index da505dd65..831ba1229 100644 --- a/src/posts/articles/kentucky-cuts-income-tax-rate.md +++ b/src/posts/articles/kentucky-cuts-income-tax-rate.md @@ -12,7 +12,7 @@ Key results for 2026: - Increases the Gini index of income inequality by 0.14% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=ky&timePeriod=2026&baseline=76143) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=2®ion=ky&timePeriod=2026&baseline=76143)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=ky&timePeriod=2026&baseline=76143) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=2®ion=ky&timePeriod=2026&baseline=76143)._ ## Household Impacts @@ -20,11 +20,11 @@ To understand the extent of this reform, it is important to note that higher-inc **Table 1: Change in Net Income by Household Income for a Single Adult** -| Household Earnings | Change in Net Income | -| :----------------: | :-------------------------------------------------------------------------------------------------------------------------------------------------: | -| $20,000 | [\+$58](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51467) | -| $100,000 | [\+$483](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51470) | -| $500,000 | [\+$1,664](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51468) | +| Household Earnings | Change in Net Income | +| :----------------: | :--------------------------------------------------------------------------------------------------------------------------------------------------------: | +| $20,000 | [\+$58](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51467) | +| $100,000 | [\+$483](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51470) | +| $500,000 | [\+$1,664](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ky&timePeriod=2026&baseline=76143&household=51468) | Below, Figure 1 displays the reduction in Kentucky income tax for a childless adult between $0 and $500,000 of household earnings. Since Kentucky's Family Size Credit fully offsets state tax liability for those below the federal poverty line, childless adults with income below $16,040 in 2026 will not benefit from the tax cut.[^1] @@ -34,32 +34,32 @@ Below, Figure 1 displays the reduction in Kentucky income tax for a childless ad ## Statewide Impacts -Using PolicyEngine static modeling, the individual income tax rate reduction enacted in Kentucky will [cost the state $684 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=ky&timePeriod=2026&baseline=76143) for tax year 2026. The measure would also increase federal revenues by $48 million, as residents would have less state income tax to take as an itemized deduction. On net, the tax cut would increase residents' net income by $636 million, without considering behavioral responses. +Using PolicyEngine static modeling, the individual income tax rate reduction enacted in Kentucky will [cost the state $684 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=ky&timePeriod=2026&baseline=76143) for tax year 2026. The measure would also increase federal revenues by $48 million, as residents would have less state income tax to take as an itemized deduction. On net, the tax cut would increase residents' net income by $636 million, without considering behavioral responses. **Figure 2: Budgetary Impact of Kentucky's Income Tax Cut** ![](https://cdn-images-1.medium.com/max/2000/0*K9gfVVMZgO36y7L_) -73% of Kentuckians will see an [increase in their net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=ky&timePeriod=2026&baseline=76143), including 99% of those in the top income decile and 6% of those in the bottom decile. +73% of Kentuckians will see an [increase in their net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=ky&timePeriod=2026&baseline=76143), including 99% of those in the top income decile and 6% of those in the bottom decile. **Figure 3: Winners of Kentucky's Income Tax Cut by Decile** ![](https://cdn-images-1.medium.com/max/2000/0*c3r5UopZtVsyE3CZ) -The tax cut will provide an [average benefit of $335](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ky&timePeriod=2026&baseline=76143) per household, ranging from $5 in the bottom income decile to $1,470 in the top decile. +The tax cut will provide an [average benefit of $335](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ky&timePeriod=2026&baseline=76143) per household, ranging from $5 in the bottom income decile to $1,470 in the top decile. **Figure 4: Income Distribution of Kentucky's Income Tax Cut by Decile** ![](https://cdn-images-1.medium.com/max/2000/0*thDpBTm7YsAjCpGU) -The tax changes are projected to [reduce Kentucky's poverty rate by 1.3%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=ky&timePeriod=2026&baseline=76143), applying the Supplemental Poverty Measure, while leaving deep poverty unchanged. The income tax reduction will also increase the state's Gini index of income inequality [by 0.14%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=ky&timePeriod=2026&baseline=76143). +The tax changes are projected to [reduce Kentucky's poverty rate by 1.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=ky&timePeriod=2026&baseline=76143), applying the Supplemental Poverty Measure, while leaving deep poverty unchanged. The income tax reduction will also increase the state's Gini index of income inequality [by 0.14%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=ky&timePeriod=2026&baseline=76143). ## Conclusion -The 0.5pp rate reduction of Kentucky's income tax will lower state revenues by $684 million in 2026, while reducing poverty by 1.3% and increasing income inequality by 0.14%. The reform reduces tax liability for households across all income deciles, with higher-income households receiving larger benefits on both an [absolute](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ky&timePeriod=2026&baseline=76143) and [relative](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=ky&timePeriod=2026&baseline=76143) basis. +The 0.5pp rate reduction of Kentucky's income tax will lower state revenues by $684 million in 2026, while reducing poverty by 1.3% and increasing income inequality by 0.14%. The reform reduces tax liability for households across all income deciles, with higher-income households receiving larger benefits on both an [absolute](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ky&timePeriod=2026&baseline=76143) and [relative](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=ky&timePeriod=2026&baseline=76143) basis. As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. [^1]: Estimate of the one-person federal poverty line for 2026. diff --git a/src/posts/articles/labour-2024-manifesto.md b/src/posts/articles/labour-2024-manifesto.md index 98b26edb5..fb939fc16 100644 --- a/src/posts/articles/labour-2024-manifesto.md +++ b/src/posts/articles/labour-2024-manifesto.md @@ -1,4 +1,4 @@ -_Distributional impact of the Labour 2024 Manifesto. See the full impact score [here](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60777®ion=uk&timePeriod=2028&baseline=1)._ +_Distributional impact of the Labour 2024 Manifesto. See the full impact score [here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60777®ion=uk&timePeriod=2028&baseline=1)._ ## Key findings @@ -32,12 +32,12 @@ Labour proposes a net spending increase of £4.8bn in 2028-29. The bulk of this None of these involve changes to benefits modelled by PolicyEngine, so we assume their cost estimates and use the ONS’ estimates of the distributional impact of public service spending categories. -| Provision | Labour (£bn) | PolicyEngine (£bn) | -| ------------------------------------- | ------------ | ------------------------------------------------------------------------------------------------------------------------------ | -| Increase education spending £1.3bn | 1.3 | [1.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60023®ion=uk&timePeriod=2028&baseline=1) | -| Increase NHS funding £2.0bn | 2.0 | [2.0](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60024®ion=uk&timePeriod=2028&baseline=1) | -| Increase other public spending £0.9bn | 0.9 | [0.9](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60025®ion=uk&timePeriod=2028&baseline=1) | -| Total spending changes | 4.2 | [4.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60027®ion=uk&timePeriod=2028&baseline=1) | +| Provision | Labour (£bn) | PolicyEngine (£bn) | +| ------------------------------------- | ------------ | ------------------------------------------------------------------------------------------------------------------------------------- | +| Increase education spending £1.3bn | 1.3 | [1.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60023®ion=uk&timePeriod=2028&baseline=1) | +| Increase NHS funding £2.0bn | 2.0 | [2.0](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60024®ion=uk&timePeriod=2028&baseline=1) | +| Increase other public spending £0.9bn | 0.9 | [0.9](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60025®ion=uk&timePeriod=2028&baseline=1) | +| Total spending changes | 4.2 | [4.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60027®ion=uk&timePeriod=2028&baseline=1) | ## Revenue @@ -48,13 +48,13 @@ Labour’s manifesto also proposes a £7.4 billion increase in tax revenues, fun - Application of standard income tax rates to carried interest - An increase of 1% to the residential property stamp duty for non-UK residents -| Provision | Labour (£bn) | PolicyEngine (£bn) | -| ---------------------------------------------------------------------------------- | ------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------- | -| Remove non-dom tax incentive and reduce tax avoidance | 5.2 | [5.2](https://policyengine.org/uk/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=60770®ion=uk&timePeriod=2028&baseline=1) | -| Apply VAT and business rates to private schools | 1.5 | [1.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2028&baseline=1&reform=60760) | -| Close carried interest tax provision | 0.6 | [0.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60028®ion=uk&timePeriod=2024&baseline=1) | -| Increase stamp duty on purchases of residential property by non-UK residents by 1% | 0.04 | 0.0 | -| Total tax changes | 7.3 | [7.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60773®ion=uk&timePeriod=2028&baseline=1) | +| Provision | Labour (£bn) | PolicyEngine (£bn) | +| ---------------------------------------------------------------------------------- | ------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | +| Remove non-dom tax incentive and reduce tax avoidance | 5.2 | [5.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=60770®ion=uk&timePeriod=2028&baseline=1) | +| Apply VAT and business rates to private schools | 1.5 | [1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2028&baseline=1&reform=60760) | +| Close carried interest tax provision | 0.6 | [0.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60028®ion=uk&timePeriod=2024&baseline=1) | +| Increase stamp duty on purchases of residential property by non-UK residents by 1% | 0.04 | 0.0 | +| Total tax changes | 7.3 | [7.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60773®ion=uk&timePeriod=2028&baseline=1) | PolicyEngine models the impact of levying VAT on private schools, largely following the evidence base contributed by [the IFS](https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending) and [UCL](https://www.tandfonline.com/doi/full/10.1080/09645292.2021.1874878).[^2] Using patterns of income and private school attendance, our model estimates distributional and inequality impacts of the reform. diff --git a/src/posts/articles/lib-dem-2024-manifesto.md b/src/posts/articles/lib-dem-2024-manifesto.md index 8bb69e426..a52a67a15 100644 --- a/src/posts/articles/lib-dem-2024-manifesto.md +++ b/src/posts/articles/lib-dem-2024-manifesto.md @@ -1,4 +1,4 @@ -_Distributional impact of the Liberal Democrat 2024 Manifesto. See the full impact score [here](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57826®ion=uk&timePeriod=2028&baseline=1)._ +_Distributional impact of the Liberal Democrat 2024 Manifesto. See the full impact score [here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57826®ion=uk&timePeriod=2028&baseline=1)._ ## Key findings @@ -38,16 +38,16 @@ We estimate that ending the two-child limit and the benefit cap would cost £3.4 Combined with increases to education, healthcare and other public service budgets, we reach the same £26.8bn cost estimate as the party’s manifesto costings. -| **Provision** | **Liberal Democrats (£bn)** | **PolicyEngine (£bn)** | -| ------------------------------------- | --------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | -| Carer's Allowance increase | 1.4 | [0.1](https://policyengine.org/uk/policy?reform=57787&focus=policyOutput.policyBreakdown&timePeriod=2028®ion=uk&baseline=1) | -| Removing the two-child limit | - | [3.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=54700®ion=uk&timePeriod=2028&baseline=1) | -| Removing the benefit cap | - | [0.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57793®ion=uk&timePeriod=2028&baseline=1) | -| Total welfare reforms | 5.5 | [5.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57795®ion=uk&timePeriod=2028&baseline=1) | -| Increase education spending £6.6bn | 6.6 | [6.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57797®ion=uk&timePeriod=2028&baseline=1) | -| Increase NHS spending £8.4bn | 8.4 | [8.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57798®ion=uk&timePeriod=2028&baseline=1) | -| Increase other public spending £6.3bn | 6.3 | [6.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57799®ion=uk&timePeriod=2028&baseline=1) | -| Total spending changes | 26.8 | [26.8](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57824®ion=uk&timePeriod=2028&baseline=1) | +| **Provision** | **Liberal Democrats (£bn)** | **PolicyEngine (£bn)** | +| ------------------------------------- | --------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | +| Carer's Allowance increase | 1.4 | [0.1](https://legacy.policyengine.org/uk/policy?reform=57787&focus=policyOutput.policyBreakdown&timePeriod=2028®ion=uk&baseline=1) | +| Removing the two-child limit | - | [3.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=54700®ion=uk&timePeriod=2028&baseline=1) | +| Removing the benefit cap | - | [0.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57793®ion=uk&timePeriod=2028&baseline=1) | +| Total welfare reforms | 5.5 | [5.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57795®ion=uk&timePeriod=2028&baseline=1) | +| Increase education spending £6.6bn | 6.6 | [6.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57797®ion=uk&timePeriod=2028&baseline=1) | +| Increase NHS spending £8.4bn | 8.4 | [8.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57798®ion=uk&timePeriod=2028&baseline=1) | +| Increase other public spending £6.3bn | 6.3 | [6.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57799®ion=uk&timePeriod=2028&baseline=1) | +| Total spending changes | 26.8 | [26.8](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57824®ion=uk&timePeriod=2028&baseline=1) | ## Taxes @@ -57,14 +57,14 @@ The Liberal Democrats propose reforms to Capital Gains Tax, including raising th We estimate that of the remaining £21.3bn in tax rises, £17.7bn would be largely incident on owners of capital and £3.6bn would fall on consumers. When combined with the Capital Gains Tax reforms, we reach a very slightly (£400m) lower revenue estimate of £26.5bn to the party’s £26.9bn. -| Provision | Liberal Democrats | PolicyEngine | -| ------------------------------------ | ----------------- | ------------------------------------------------------------------------------------------------------------------------------- | -| Raise AEA to £5,000 | - | [0.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57808®ion=uk&timePeriod=2028&baseline=1) | -| Effectively increase rates by 5p | - | [5.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57817®ion=uk&timePeriod=2028&baseline=1) | -| Total Capital Gains Tax reforms | 5.2 | [5.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57813®ion=uk&timePeriod=2028&baseline=1) | -| Increase taxes on capital £17.7bn | 17.7 | [17.7](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57818®ion=uk&timePeriod=2028&baseline=1) | -| Increase taxes on consumption £3.6bn | 3.6 | [3.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57820®ion=uk&timePeriod=2028&baseline=1) | -| Total tax reforms | 26.9 | [26.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57823®ion=uk&timePeriod=2028&baseline=1) | +| Provision | Liberal Democrats | PolicyEngine | +| ------------------------------------ | ----------------- | -------------------------------------------------------------------------------------------------------------------------------------- | +| Raise AEA to £5,000 | - | [0.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57808®ion=uk&timePeriod=2028&baseline=1) | +| Effectively increase rates by 5p | - | [5.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57817®ion=uk&timePeriod=2028&baseline=1) | +| Total Capital Gains Tax reforms | 5.2 | [5.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57813®ion=uk&timePeriod=2028&baseline=1) | +| Increase taxes on capital £17.7bn | 17.7 | [17.7](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57818®ion=uk&timePeriod=2028&baseline=1) | +| Increase taxes on consumption £3.6bn | 3.6 | [3.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57820®ion=uk&timePeriod=2028&baseline=1) | +| Total tax reforms | 26.9 | [26.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=57823®ion=uk&timePeriod=2028&baseline=1) | ## Economic impact diff --git a/src/posts/articles/lift-act.md b/src/posts/articles/lift-act.md index 696da3abb..aa193c6af 100644 --- a/src/posts/articles/lift-act.md +++ b/src/posts/articles/lift-act.md @@ -12,13 +12,13 @@ The LIFT Act's Middle Class Tax Credit phases in with 100% of earnings up to a m | Head of household | $3,600 | $71,600 | $95,450 | | Joint | $7,200 | $71,600 | $119,350 | -This structure is depicted below. You can also calculate how the LIFT Act would affect your own household with **[this calculator](https://policyengine.org/us/household?reform=61627&focus=intro®ion=enhanced_us&timePeriod=2024&baseline=2)**. +This structure is depicted below. You can also calculate how the LIFT Act would affect your own household with **[this calculator](https://legacy.policyengine.org/us/household?reform=61627&focus=intro®ion=enhanced_us&timePeriod=2024&baseline=2)**. ![Figure 1: LIFT Act Middle Class Tax Credit by filing status and earnings level (2024)](/images/posts/lift-act/trapezoids.png) # Static US Impact -[PolicyEngine estimates](https://policyengine.org/us/policy?reform=61632&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) that the MCTC would, in 2024: +[PolicyEngine estimates](https://legacy.policyengine.org/us/policy?reform=61632&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2024&baseline=2) that the MCTC would, in 2024: - Cost $411 billion - Lower poverty by 25.4%, with larger reductions for children, Blacks, Hispanics, and men @@ -33,7 +33,7 @@ While the earnings requirement reduces the share of individuals in the bottom de PolicyEngine now supports behavioral responses: users can enter their own income and substitution elasticities, which govern how people work less when they have more income and are paid less on the margin, respectively. The MCTC would be expected to reduce work through the income effect, and both increase and reduce work through the substitution effect, as it reduces marginal tax rates by 100 percentage points in the phase-in and increases them by 15 percentage points in the phase-out. -Applying elasticities from the Congressional Budget Office, we project that the MCTC would [reduce hours worked by 1.1%](https://policyengine.org/us/policy?reform=61633&focus=policyOutput.laborSupplyImpact.hours®ion=enhanced_us&timePeriod=2024&baseline=2) and [earnings by 0.9%](https://policyengine.org/us/policy?reform=61633&focus=policyOutput.laborSupplyImpact.earnings.overall.relative®ion=enhanced_us&timePeriod=2024&baseline=2). Substitution effects (the phase-out) explain most of these reductions. As a result, the tax credit's cost would rise by 10% to [$450 billion](https://policyengine.org/us/policy?reform=61633&focus=policyOutput.budgetaryImpact.overall®ion=enhanced_us&timePeriod=2024&baseline=2), though the poverty impact would remain essentially unchanged at 25%. +Applying elasticities from the Congressional Budget Office, we project that the MCTC would [reduce hours worked by 1.1%](https://legacy.policyengine.org/us/policy?reform=61633&focus=policyOutput.laborSupplyImpact.hours®ion=enhanced_us&timePeriod=2024&baseline=2) and [earnings by 0.9%](https://legacy.policyengine.org/us/policy?reform=61633&focus=policyOutput.laborSupplyImpact.earnings.overall.relative®ion=enhanced_us&timePeriod=2024&baseline=2). Substitution effects (the phase-out) explain most of these reductions. As a result, the tax credit's cost would rise by 10% to [$450 billion](https://legacy.policyengine.org/us/policy?reform=61633&focus=policyOutput.budgetaryImpact.overall®ion=enhanced_us&timePeriod=2024&baseline=2), though the poverty impact would remain essentially unchanged at 25%. # Conclusion @@ -54,4 +54,4 @@ The LIFT Act proposed by then-Senator Kamala Harris includes a Middle Class Tax Incorporating behavioral responses adds about 10% to the cost, due to about 1% less labor supply. This results from income effects and substitution effects for those in the phase-out range, though some low-income earners would be projected to work more due to substitution effects. -As Vice President Harris pursues her 2024 presidential campaign, she may balance her prior proposals like the LIFT Act with newer policies in [President Biden's budget](https://policyengine.org/us/research/biden-budget-2025). PolicyEngine stands ready to support evidence-based evaluation of potential reforms like these and those from across the political spectrum. +As Vice President Harris pursues her 2024 presidential campaign, she may balance her prior proposals like the LIFT Act with newer policies in [President Biden's budget](https://legacy.policyengine.org/us/research/biden-budget-2025). PolicyEngine stands ready to support evidence-based evaluation of potential reforms like these and those from across the political spectrum. diff --git a/src/posts/articles/louisiana-flat-tax.md b/src/posts/articles/louisiana-flat-tax.md index 574c00698..0375c0ad1 100644 --- a/src/posts/articles/louisiana-flat-tax.md +++ b/src/posts/articles/louisiana-flat-tax.md @@ -22,7 +22,7 @@ Key results for 2025: - Increases the Gini index of income inequality by 0.3% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) or [calculate the effect on your household](https://policyengine.org/us/household?focus=input.household.taxYear&reform=2®ion=la&timePeriod=2025&baseline=71680)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) or [calculate the effect on your household](https://legacy.policyengine.org/us/household?focus=input.household.taxYear&reform=2®ion=la&timePeriod=2025&baseline=71680)._ ## Household Impacts 2025 @@ -30,12 +30,12 @@ To see how families in Louisiana would be affected by the discussed tax changes, **Table 1: Change in Net Income Based on Household Composition** -| Household Composition | Change in Net Income | -| ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | -| Single, No Children, No Earnings | [$0](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49781) | -| Single, One Child, LA Minimum Wage | [$137](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49783) | -| Married, Two Children, Median Household Income | [$423](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) | -| Married, Three Children, $500,000 Income | [$5,616](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49788) | +| Household Composition | Change in Net Income | +| ---------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | +| Single, No Children, No Earnings | [$0](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49781) | +| Single, One Child, LA Minimum Wage | [$137](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49783) | +| Married, Two Children, Median Household Income | [$423](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) | +| Married, Three Children, $500,000 Income | [$5,616](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49788) | The changes in the tax code benefit all the households above, except for a single adult with no earnings as they had no previous tax liability. A single parent with one child earning $15,080 (Louisiana’s full-time [minimum wage](https://www.ncsl.org/labor-and-employment/state-minimum-wages) equivalent) would see their tax bill drop by $137. A married couple with two kids with earnings at the state’s [median household income](https://www.census.gov/quickfacts/fact/table/LA/POP060210) would gain $423 from the individual income tax changes. However, a family making $500,000 would see the largest increase in their net income by far, paying $5,616 less in taxes in 2025. Below is a graph displaying the change in net income for the third example based on household income. @@ -45,13 +45,13 @@ The changes in the tax code benefit all the households above, except for a singl ## Statewide Impact 2025 -Using PolicyEngine static modeling, the individual income tax provisions enacted in Louisiana’s special legislative session will cost the state [$1.3 billion for tax year 2025](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786), aligning with [Gov. Landry’s cost projection](https://apnews.com/article/tax-bill-louisiana-landry-ec1a84124c751f32b9dcee6174dc9af2). [82% of Louisiana residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) would see an increase in their net income: 99% of those in the upper half of the income distribution and 65% of those in the bottom half. While the bottom tax rate rises from 1.85% to 3%, the higher standard deduction prevents filers from having a higher income tax liability. +Using PolicyEngine static modeling, the individual income tax provisions enacted in Louisiana’s special legislative session will cost the state [$1.3 billion for tax year 2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786), aligning with [Gov. Landry’s cost projection](https://apnews.com/article/tax-bill-louisiana-landry-ec1a84124c751f32b9dcee6174dc9af2). [82% of Louisiana residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786) would see an increase in their net income: 99% of those in the upper half of the income distribution and 65% of those in the bottom half. While the bottom tax rate rises from 1.85% to 3%, the higher standard deduction prevents filers from having a higher income tax liability. **Figure 2: Winners and Losers of Louisiana Individual Income Tax Changes** ![](https://cdn-images-1.medium.com/max/2000/0*FUDVEC4_M1YfLgDT) -The reform cuts taxes by an average of [$709 per household](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786), with the average amount rising at each income decile. +The reform cuts taxes by an average of [$709 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=la&timePeriod=2025&baseline=71680&household=49786), with the average amount rising at each income decile. **Figure 4: Average Benefit of Louisiana Individual Income Tax Changes by Decile** @@ -65,4 +65,4 @@ The individual income tax changes signed into law by Gov. Jeff Landry will reduc As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. diff --git a/src/posts/articles/make-everyone-a-policymaker.md b/src/posts/articles/make-everyone-a-policymaker.md index 1375c2b42..2733f014f 100644 --- a/src/posts/articles/make-everyone-a-policymaker.md +++ b/src/posts/articles/make-everyone-a-policymaker.md @@ -8,7 +8,7 @@ We envision a more inclusive, evidence-based future for tax and benefit policy. Further, we envision that inclusive, evidence-based future for _policymaking._ A future where policymakers, academics, think tanks, candidates, and the public can share a common conversation around policy reforms. Where a country’s top elected official evaluates their policy idea with the same tools as the high school student learning about tax and benefit systems for the first time. Where everyone can see the impact of policy proposals on both their country and themselves. We envision a more participatory, democratic future where anyone can explore anyone else’s policy ideas with the rigor currently reserved for exclusive policy analysis shops. -**Today, we’re taking a step towards that future by launching PolicyEngine.** PolicyEngine is the world’s first product that allows anyone to reform the tax and benefit system and see how it would affect society and their own household. We’re currently live in the UK at [**policyengine.org**](http://policyengine.org) and we’re working on bringing it to other countries, especially the US. Here’s a video of how it works: +**Today, we’re taking a step towards that future by launching PolicyEngine.** PolicyEngine is the world’s first product that allows anyone to reform the tax and benefit system and see how it would affect society and their own household. We’re currently live in the UK at [**policyengine.org**](http://legacy.policyengine.org) and we’re working on bringing it to other countries, especially the US. Here’s a video of how it works:
@@ -49,6 +49,6 @@ If you’d like to financially support our work, you can [make a donation throug Thank you for joining us on our journey toward better public policy. Max Ghenis and Nikhil Woodruff -[PolicyEngine](http://policyengine.org) co-founders +[PolicyEngine](http://legacy.policyengine.org) co-founders ![](https://cdn-images-1.medium.com/max/2000/1*sKPTtD2QzO5FZQNdyRP-YQ.png) diff --git a/src/posts/articles/malliotakis-steel-working-families-tax-cut-act.md b/src/posts/articles/malliotakis-steel-working-families-tax-cut-act.md index 9cea90d77..5c9730150 100644 --- a/src/posts/articles/malliotakis-steel-working-families-tax-cut-act.md +++ b/src/posts/articles/malliotakis-steel-working-families-tax-cut-act.md @@ -12,15 +12,15 @@ The bill reduces this additional standard deduction by 5% of adjusted gross inco - $400,000 for married and widowed filers -[**See how the Working Families Tax Credit Act would affect you.**](https://policyengine.org/us/household?focus=intro&reform=14512®ion=us&timePeriod=2023&baseline=2) +[**See how the Working Families Tax Credit Act would affect you.**](https://legacy.policyengine.org/us/household?focus=intro&reform=14512®ion=us&timePeriod=2023&baseline=2) ## Household impacts -Consider a [single filer in New York](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31355) with no itemized deductions other than state income tax. The WFTCA would provide [benefits](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31356) if they earn between $13,851 ($1 above the current standard deduction) and $240,000, with the maximum dollar benefit of $640 at around $200,000 earnings. +Consider a [single filer in New York](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31355) with no itemized deductions other than state income tax. The WFTCA would provide [benefits](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31356) if they earn between $13,851 ($1 above the current standard deduction) and $240,000, with the maximum dollar benefit of $640 at around $200,000 earnings. ![](https://cdn-images-1.medium.com/max/3200/0*dv92M9FKwiIP5zCY) -The WFTCA would reduce the filer’s marginal tax rates by up to -10% in specific earnings ranges, around $15,000 and $60,000. The phase-out then raises [marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31356) by about 1.7% when earning between $200,000 and $240,000. +The WFTCA would reduce the filer’s marginal tax rates by up to -10% in specific earnings ranges, around $15,000 and $60,000. The phase-out then raises [marginal tax rates](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=14512®ion=ny&timePeriod=2023&baseline=2&household=31356) by about 1.7% when earning between $200,000 and $240,000. ![](https://cdn-images-1.medium.com/max/3200/0*C_DfomXSDdHQWOct) @@ -28,32 +28,32 @@ The WFTCA would affect other filers differently, depending on the marital status ## Budgetary impact -We project that the WFTCA would cost [$50 billion in 2023](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=us&timePeriod=2023&baseline=2). As comparison, the Urban-Brookings Tax Policy Center estimated that the bill would cost [$95 billion for 2024/25](https://twitter.com/jbuhl35/status/1666924708967727112), or an average of $47.5 billion in each year (they also provided [distributional analysis](https://www.taxpolicycenter.org/model-estimates/working-families-tax-cut-act-june-2023/t23-0061-proposal-increase-standard-deduction)). The American Enterprise Institute, using the open-source [Tax-Calculator microsimulation model](https://taxcalc.pslmodels.org/), estimates that the bill would cost [$43 billion in 2024](https://www.aei.org/economics/flawed-approach-the-working-families-tax-cut-act-as-a-response-to-inflation/). +We project that the WFTCA would cost [$50 billion in 2023](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=us&timePeriod=2023&baseline=2). As comparison, the Urban-Brookings Tax Policy Center estimated that the bill would cost [$95 billion for 2024/25](https://twitter.com/jbuhl35/status/1666924708967727112), or an average of $47.5 billion in each year (they also provided [distributional analysis](https://www.taxpolicycenter.org/model-estimates/working-families-tax-cut-act-june-2023/t23-0061-proposal-increase-standard-deduction)). The American Enterprise Institute, using the open-source [Tax-Calculator microsimulation model](https://taxcalc.pslmodels.org/), estimates that the bill would cost [$43 billion in 2024](https://www.aei.org/economics/flawed-approach-the-working-families-tax-cut-act-as-a-response-to-inflation/). -Both TPC and AEI use the IRS public use file (PUF) rather than the Current Population Survey March Supplement (CPS), as PolicyEngine does. They also project the microdata into future years, while we use the 2021 CPS as-is, overwriting taxes and benefits with 2023 policy rules. We will [integrate the PUF into the CPS and project it to future years](https://policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) in the coming months. +Both TPC and AEI use the IRS public use file (PUF) rather than the Current Population Survey March Supplement (CPS), as PolicyEngine does. They also project the microdata into future years, while we use the 2021 CPS as-is, overwriting taxes and benefits with 2023 policy rules. We will [integrate the PUF into the CPS and project it to future years](https://legacy.policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) in the coming months. -In New York and California, the states the authors represent, the bill would reduce tax liabilities by [$3 billion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=ny&timePeriod=2023&baseline=2) and [$6 billion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=ca&timePeriod=2023&baseline=2), respectively. +In New York and California, the states the authors represent, the bill would reduce tax liabilities by [$3 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=ny&timePeriod=2023&baseline=2) and [$6 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=14512®ion=ca&timePeriod=2023&baseline=2), respectively. ## Distributional impact -On average, the proposal would raise net incomes by [$382 per household](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=14512®ion=us&timePeriod=2023&baseline=2); this increases with income, except for the 10th decile due to the phase-out. +On average, the proposal would raise net incomes by [$382 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=14512®ion=us&timePeriod=2023&baseline=2); this increases with income, except for the 10th decile due to the phase-out. ![](https://cdn-images-1.medium.com/max/2884/0*gheY-rtEMwYZBSAt) -On a [relative basis](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), the bill would raise incomes a similar amount for deciles four through nine. +On a [relative basis](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), the bill would raise incomes a similar amount for deciles four through nine. ![](https://cdn-images-1.medium.com/max/2732/0*HuuthcudLSRD2551) -We estimate that the WFTCA would benefit [75% of the population](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), disproportionately those in deciles five through nine. As context, Representative Steel claimed in her announcement that the bill would benefit [82% of tax filers in her district](https://waysandmeans.house.gov/malliotakis-steel-lead-legislation-to-provide-tax-relief-to-working-families/). +We estimate that the WFTCA would benefit [75% of the population](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), disproportionately those in deciles five through nine. As context, Representative Steel claimed in her announcement that the bill would benefit [82% of tax filers in her district](https://waysandmeans.house.gov/malliotakis-steel-lead-legislation-to-provide-tax-relief-to-working-families/). ![](https://cdn-images-1.medium.com/max/2712/0*uK_cr-x6857z88-F) -The WFTCA would [lower poverty by 0.4%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), disproportionately for working-age adults and [Hispanics](https://policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=14512®ion=us&timePeriod=2023&baseline=2). +The WFTCA would [lower poverty by 0.4%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), disproportionately for working-age adults and [Hispanics](https://legacy.policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=14512®ion=us&timePeriod=2023&baseline=2). -The proposal would [lower income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=14512®ion=us&timePeriod=2023&baseline=2) according to the three measures we estimate. It reduces the broadest measure, the Gini index, the least, and the narrowest, the share held by the top 1%, the most. +The proposal would [lower income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=14512®ion=us&timePeriod=2023&baseline=2) according to the three measures we estimate. It reduces the broadest measure, the Gini index, the least, and the narrowest, the share held by the top 1%, the most. ![](https://cdn-images-1.medium.com/max/2756/0*B_gr7YmtNKBXJshQ) -As a result of lowering marginal tax rates for low-income households, the WFTCA would [make cliffs about 1 percent less prevalent](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=14512®ion=us&timePeriod=2023&baseline=2). +As a result of lowering marginal tax rates for low-income households, the WFTCA would [make cliffs about 1 percent less prevalent](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=14512®ion=us&timePeriod=2023&baseline=2). -[**See more details on the Working Families Tax Credit**](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), including in your state or for [your household](https://policyengine.org/us/household?focus=intro&reform=14512®ion=us&timePeriod=2023&baseline=2), at PolicyEngine. +[**See more details on the Working Families Tax Credit**](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=14512®ion=us&timePeriod=2023&baseline=2), including in your state or for [your household](https://legacy.policyengine.org/us/household?focus=intro&reform=14512®ion=us&timePeriod=2023&baseline=2), at PolicyEngine. diff --git a/src/posts/articles/managers-amendment-to-hr1.md b/src/posts/articles/managers-amendment-to-hr1.md index d4927362e..85569c754 100644 --- a/src/posts/articles/managers-amendment-to-hr1.md +++ b/src/posts/articles/managers-amendment-to-hr1.md @@ -18,7 +18,7 @@ In this report, we demonstrate the impact of the manager's amendment through hyp - Lower the Gini index of income inequality by 0.15% -_View the impact of the Manager's Amendment on [the economy](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) and [your household](https://policyengine.org/us/household?focus=intro&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps)._ +_View the impact of the Manager's Amendment on [the economy](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) and [your household](https://legacy.policyengine.org/us/household?focus=intro&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps)._ ## Manager's Amendment Provisions @@ -40,7 +40,7 @@ The manager's amendment further revised these policies, while also revising othe In sum, the manager's amendment: -1. **Expanded the SALT deduction** between the [Ways and Means SALT cap](https://policyengine.org/us/research/ways-and-means-salt-cap) and the [SALT Caucus's proposed SALT cap](https://policyengine.org/us/research/salt-caucus-62k-cap) +1. **Expanded the SALT deduction** between the [Ways and Means SALT cap](https://legacy.policyengine.org/us/research/ways-and-means-salt-cap) and the [SALT Caucus's proposed SALT cap](https://legacy.policyengine.org/us/research/salt-caucus-62k-cap) 1. **Reduced the AMT exemption amount and exemption phase-out start** by changing the base year from 2017 to 2025 for inflation indexing @@ -58,11 +58,11 @@ Under the new compromise, households could claim up to $40,000 in SALT ($20,000 ![](https://cdn-images-1.medium.com/max/3200/0*WWW4GvxooQQxEr1-) -In addition to these changes, the manager's amendment increased the overall limitation on itemized deductions to 5/37 of the lesser of a household's total SALT deduction or the difference between their taxable income and the top income bracket's threshold. The 2/37 limitation remains for all other itemized deductions. Furthermore, the manager's amendment sets 2025 as the base year for alternative minimum tax inflation adjustments, lowering the AMT exemption amount and phase-out start. Each change will affect a household's eligible SALT deduction and [effective SALT cap](https://policyengine.org/us/research/introducing-salternative). +In addition to these changes, the manager's amendment increased the overall limitation on itemized deductions to 5/37 of the lesser of a household's total SALT deduction or the difference between their taxable income and the top income bracket's threshold. The 2/37 limitation remains for all other itemized deductions. Furthermore, the manager's amendment sets 2025 as the base year for alternative minimum tax inflation adjustments, lowering the AMT exemption amount and phase-out start. Each change will affect a household's eligible SALT deduction and [effective SALT cap](https://legacy.policyengine.org/us/research/introducing-salternative). ## Household Impacts -The changes to the SALT deduction, overall limitation on itemized deductions, and AMT would affect households that itemize their deductions and have state and local tax expenses greater than the initial limit in the Ways and Means bill. To understand this, let's examine a single adult in Texas making $500,000, with $40,000 in property taxes[^2] and $50,000 in other itemized deductions (e.g., charitable contributions or mortgage interest). Under the manager's amendment, they would see an [increase in their net income of $10,640](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps&household=53694) in 2026, compared to the Ways and Means OBBBA. Figure 2 displays how this filer's net income would change as their household earnings vary. +The changes to the SALT deduction, overall limitation on itemized deductions, and AMT would affect households that itemize their deductions and have state and local tax expenses greater than the initial limit in the Ways and Means bill. To understand this, let's examine a single adult in Texas making $500,000, with $40,000 in property taxes[^2] and $50,000 in other itemized deductions (e.g., charitable contributions or mortgage interest). Under the manager's amendment, they would see an [increase in their net income of $10,640](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps&household=53694) in 2026, compared to the Ways and Means OBBBA. Figure 2 displays how this filer's net income would change as their household earnings vary. [^2]: While Texas lacks a state income tax, filers can also deduct their sales tax, either reported or estimated from IRS tables. PolicyEngine calculates state sales tax from these tables, which adds between $634 and $2,677 to this filer's SALT. Combined with the $40,000 property taxes, they will exceed the $40,400 SALT cap for 2026 at all income levels. @@ -129,7 +129,7 @@ Filers in other situations, such as with high capital gains, could face larger i ## Microsimulation Results -Using PolicyEngine's static microsimulation model, we project that the manager's amendment to the One Big Beautiful Big Act would [increase the cost of the tax package by $22.0 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) over the next ten years (2026–2035).[^3] Additionally, because the proposed changes go into effect in 2025, it would [increase federal revenues by $3.0 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=85113®ion=us&timePeriod=2025&baseline=85188&dataset=enhanced_cps) this year. +Using PolicyEngine's static microsimulation model, we project that the manager's amendment to the One Big Beautiful Big Act would [increase the cost of the tax package by $22.0 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) over the next ten years (2026–2035).[^3] Additionally, because the proposed changes go into effect in 2025, it would [increase federal revenues by $3.0 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=85113®ion=us&timePeriod=2025&baseline=85188&dataset=enhanced_cps) this year. [^3]: We project that state tax revenues would increase by $0.2bn over the budget window (2026-2035). @@ -149,19 +149,19 @@ Using PolicyEngine's static microsimulation model, we project that the manager's | 2035 | 1.0 | | **2026-2035** | **-22.0** | -The SALT cap would [increase the net income of 3.1% of US residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) in 2026 and decrease it for 3.3% of the population. Of individuals in the top income decile, 30% would experience a reduction in net income and 9% would experience a gain. +The SALT cap would [increase the net income of 3.1% of US residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) in 2026 and decrease it for 3.3% of the population. Of individuals in the top income decile, 30% would experience a reduction in net income and 9% would experience a gain. **Figure 10: Winners and Losers of the Manager's Amendment to the One Big Beautiful Big Act (2026)** ![](https://cdn-images-1.medium.com/max/3200/0*_U1Fx1HUtpJEQ5D8) -Households in the top decile see their tax liability fall by [$347 on average](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps). The second income decile would see an average gain of $218 in 2026, potentially due to some high income filers in households with low- or negative-income filers. +Households in the top decile see their tax liability fall by [$347 on average](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps). The second income decile would see an average gain of $218 in 2026, potentially due to some high income filers in households with low- or negative-income filers. **Figure 11: Average Impact of the Manager's Amendment to the One Big Beautiful Big Act (2026)** ![](https://cdn-images-1.medium.com/max/3200/0*53N1NUVv92mC7TXB) -When it comes to inequality, the SALT Caucus proposal would, in 2026, [lower the Gini index](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) by 0.15%, and lower the top 1%'s share of net income by 0.03% +When it comes to inequality, the SALT Caucus proposal would, in 2026, [lower the Gini index](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=85113®ion=us&timePeriod=2026&baseline=85188&dataset=enhanced_cps) by 0.15%, and lower the top 1%'s share of net income by 0.03% ## Conclusion @@ -177,7 +177,7 @@ These changes would reduce federal revenues by $22.0 billion over the ten-year w As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Baseline Details diff --git a/src/posts/articles/maryland-standard-deduction.md b/src/posts/articles/maryland-standard-deduction.md index 368e209ab..8665189df 100644 --- a/src/posts/articles/maryland-standard-deduction.md +++ b/src/posts/articles/maryland-standard-deduction.md @@ -6,7 +6,7 @@ Using PolicyEngine, we can compute the standard deduction’s impact. We’ll do ## Defining the reform -From the Policy page, navigate to the Maryland > State income tax > Deductions > Standard section. Select the Baseline, and set the value of MD standard deduction as a percent of AGI to zero, as well as MD maximum standard deduction for each filing status using the dropdown menu. Finally, set Simulation > Geography to Maryland. This will produce [this reform link](https://policyengine.org/us/policy?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD). +From the Policy page, navigate to the Maryland > State income tax > Deductions > Standard section. Select the Baseline, and set the value of MD standard deduction as a percent of AGI to zero, as well as MD maximum standard deduction for each filing status using the dropdown menu. Finally, set Simulation > Geography to Maryland. This will produce [this reform link](https://legacy.policyengine.org/us/policy?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD). ![](https://cdn-images-1.medium.com/max/3200/0*Tuukff7dXZRB__70) @@ -16,7 +16,7 @@ By default, the Reform page will show the current value listed above. ## Population impact -Selecting Compute population impact shows [this link](https://policyengine.org/us/population-impact?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&md_min_standard_deduction_WIDOW=3100&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_md_min_standard_deduction_WIDOW=0&baseline_state_specific=MD). PolicyEngine estimates that Maryland’s standard deduction costs $417 million, benefits 90% of the population, has no effect on poverty, and slightly reduces income inequality. +Selecting Compute population impact shows [this link](https://legacy.policyengine.org/us/population-impact?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&md_min_standard_deduction_WIDOW=3100&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_md_min_standard_deduction_WIDOW=0&baseline_state_specific=MD). PolicyEngine estimates that Maryland’s standard deduction costs $417 million, benefits 90% of the population, has no effect on poverty, and slightly reduces income inequality. ![](https://cdn-images-1.medium.com/max/3200/0*eVayVbOocgUWZl0P) @@ -40,7 +40,7 @@ The sudden increase to net income (decrease to marginal tax rate) at $13,590 res ![](https://cdn-images-1.medium.com/max/3200/0*hWlScrE0b95B9TBx) -[Repealing the Poverty Line Credit in the baseline and reform](https://policyengine.org/us/household?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD&baseline_md_poverty_line_credit_rate=0) shows that standard deduction would have a smoother impact in the absence of the Poverty Line Credit. +[Repealing the Poverty Line Credit in the baseline and reform](https://legacy.policyengine.org/us/household?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD&baseline_md_poverty_line_credit_rate=0) shows that standard deduction would have a smoother impact in the absence of the Poverty Line Credit. ![](https://cdn-images-1.medium.com/max/3200/0*gLk0c9ANp3KKOSBK) @@ -54,8 +54,8 @@ Select Compute how earnings affect you to see how the standard deduction affects ![](https://cdn-images-1.medium.com/max/3200/0*S9bfltBYrvHgpMx-) -We can similarly see a smoother impact by repealing the Maryland EITC in the baseline and reform. Since the Poverty Line Credit fills in the EITC, we need to [repeal both](https://policyengine.org/us/household?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD&baseline_md_non_single_childless_non_refundable_eitc_match=0&baseline_md_eitc_refundable_match=0&baseline_md_poverty_line_credit_rate=0). +We can similarly see a smoother impact by repealing the Maryland EITC in the baseline and reform. Since the Poverty Line Credit fills in the EITC, we need to [repeal both](https://legacy.policyengine.org/us/household?md_standard_deduction_rate=15&md_min_standard_deduction_HEAD_OF_HOUSEHOLD=3100&md_min_standard_deduction_JOINT=3100&md_min_standard_deduction_SEPARATE=1550&md_min_standard_deduction_SINGLE=1550&baseline_md_standard_deduction_rate=0&baseline_md_min_standard_deduction_HEAD_OF_HOUSEHOLD=0&baseline_md_min_standard_deduction_JOINT=0&baseline_md_min_standard_deduction_SEPARATE=0&baseline_md_min_standard_deduction_SINGLE=0&baseline_state_specific=MD&baseline_md_non_single_childless_non_refundable_eitc_match=0&baseline_md_eitc_refundable_match=0&baseline_md_poverty_line_credit_rate=0). ![](https://cdn-images-1.medium.com/max/3200/0*fnz-UD2-g9iOg7dM) -Here we’ve shown the impact of Maryland’s standard deduction, including how it interacts with other tax programs. To compute the impact of other tax and benefit programs, try PolicyEngine US at [policyengine.org](https://policyengine.org/). +Here we’ve shown the impact of Maryland’s standard deduction, including how it interacts with other tax programs. To compute the impact of other tax and benefit programs, try PolicyEngine US at [policyengine.org](https://legacy.policyengine.org/). diff --git a/src/posts/articles/massachusetts-governor-maura-healeys-fy-2024-budget-recommendation.md b/src/posts/articles/massachusetts-governor-maura-healeys-fy-2024-budget-recommendation.md index 6e7dc1080..5a13e59d2 100644 --- a/src/posts/articles/massachusetts-governor-maura-healeys-fy-2024-budget-recommendation.md +++ b/src/posts/articles/massachusetts-governor-maura-healeys-fy-2024-budget-recommendation.md @@ -1,4 +1,4 @@ -**_[See how the proposal would affect your household.](https://policyengine.org/us/household?focus=intro&reform=5842®ion=ma&timePeriod=2023&baseline=2)_** +**_[See how the proposal would affect your household.](https://legacy.policyengine.org/us/household?focus=intro&reform=5842®ion=ma&timePeriod=2023&baseline=2)_** On Monday, Massachusetts Governor Maura Healey introduced her [fiscal year 2024 budget recommendation](https://www.mass.gov/doc/fy-2024-budget-recommendation-brief-providing-meaningful-tax-relief), which included five main proposals: @@ -26,7 +26,7 @@ Here we detail each provision. ## Child & Family Credit -**_[See the impact of the Child & Family Credit on your household](https://policyengine.org/us/household?focus=intro&reform=5843®ion=ma&timePeriod=2023&baseline=2) and [on Massachusetts](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5843®ion=ma&timePeriod=2023&baseline=2)._** +**_[See the impact of the Child & Family Credit on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=5843®ion=ma&timePeriod=2023&baseline=2) and [on Massachusetts](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5843®ion=ma&timePeriod=2023&baseline=2)._** Currently, Massachusetts families can claim one of the following two refundable tax credits: @@ -42,19 +42,19 @@ Governor Healey proposes eliminating any Estate Taxes for estates with a value o ## Renter tax deduction increase -[**_See the impact of the renter tax deduction increase on your household._**](https://policyengine.org/us/household?focus=intro&reform=5370®ion=ma&timePeriod=2023&baseline=2) +[**_See the impact of the renter tax deduction increase on your household._**](https://legacy.policyengine.org/us/household?focus=intro&reform=5370®ion=ma&timePeriod=2023&baseline=2) Massachusetts provides a tax deduction of up to 50% of filers’ yearly rent, capped at $3,000. Governor Healey proposes raising this to $4,000. ## Senior Circuit Breaker Credit increase -[**_See the impact of the Senior Circuit Breaker Credit increase on your household._**](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5828®ion=ma&timePeriod=2023&baseline=2) +[**_See the impact of the Senior Circuit Breaker Credit increase on your household._**](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5828®ion=ma&timePeriod=2023&baseline=2) Massachusetts provides a Senior Circuit Breaker Tax Credit, which reduces tax liabilities for filers aged 65 or older, depending on their income, rent, and property tax, in particular when rent and property tax exceed 10% of one’s income. Governor Healey proposes doubling the maximum credit from $1,200 to $2,400. ## Short-term capital gains cut -**_[See the impact of the short-term capital gains cut on your household](https://policyengine.org/us/policy?focus=policyOutput&reform=5830®ion=ma&timePeriod=2023&baseline=2) and [on Massachusetts](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5830®ion=ma&timePeriod=2023&baseline=2)._** +**_[See the impact of the short-term capital gains cut on your household](https://legacy.policyengine.org/us/policy?focus=policyOutput&reform=5830®ion=ma&timePeriod=2023&baseline=2) and [on Massachusetts](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=5830®ion=ma&timePeriod=2023&baseline=2)._** Massachusetts currently taxes most income at 5%, except income exceeding $1 million (9%) and short term capital gains (12%). The federal government and two other states also tax capital gains differently depending on whether the assets have been held for a year. Governor Healey proposes equalizing short and long term capital gains rates by reducing the short term rate from 12% to 5%. @@ -74,9 +74,9 @@ Consider this family of five: - No childcare costs for the six- and ten-year-old children -Governor Healey’s proposal would [provide them a net benefit](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9150) if they earn above $8,000, and $50 if they earn at least $9,500. This is the earnings range over which they would pay income taxes, and where the renter tax deduction begins to reduce their taxable income. +Governor Healey’s proposal would [provide them a net benefit](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9150) if they earn above $8,000, and $50 if they earn at least $9,500. This is the earnings range over which they would pay income taxes, and where the renter tax deduction begins to reduce their taxable income. -Overall, this family would benefit mainly from the consolidation of the Dependent Credit and the Dependent Care Credit into the Family & Child Tax Credit. Current law entitles them to a maximum credit of $240 per child, up to a max of two children, giving them $480. Governor Healey’s proposal would make three of their children eligible for a $600 credit, [producing a total credit of $1,800](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9183). Compared to current law, Governor Healey’s proposed Renters Deduction increase would also reduce their [income tax liability by $50](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9183). +Overall, this family would benefit mainly from the consolidation of the Dependent Credit and the Dependent Care Credit into the Family & Child Tax Credit. Current law entitles them to a maximum credit of $240 per child, up to a max of two children, giving them $480. Governor Healey’s proposal would make three of their children eligible for a $600 credit, [producing a total credit of $1,800](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9183). Compared to current law, Governor Healey’s proposed Renters Deduction increase would also reduce their [income tax liability by $50](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9183). ![](https://cdn-images-1.medium.com/max/2988/0*OP5yHLdqVl6UEIKq) @@ -84,11 +84,11 @@ Overall, this family would benefit mainly from the consolidation of the Dependen Consider a single person paying $2,050 per month in rent, [Zillow’s estimated median](https://www.zillow.com/rental-manager/market-trends/ma/?bedrooms=0) for studios in Massachusetts. -Governor Healey’s proposal would [provide them a net benefit](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9109) if they earn above $8,000, and $50 if they earn at least $9,500. This is the earnings range over which they would pay income taxes, and where the renter tax deduction begins to reduce their taxable income. +Governor Healey’s proposal would [provide them a net benefit](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9109) if they earn above $8,000, and $50 if they earn at least $9,500. This is the earnings range over which they would pay income taxes, and where the renter tax deduction begins to reduce their taxable income. ![](https://cdn-images-1.medium.com/max/2988/0*UhFSHuDxId6dchbM) -The reform [lowers their marginal tax rate](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9109) between $8,000 and $9,500 earnings by between zero and five percentage points. The [cuts to the short-term capital gain rate](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9216) are responsible for the majority of the benefit in this case, saving this individual $8,092. +The reform [lowers their marginal tax rate](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9109) between $8,000 and $9,500 earnings by between zero and five percentage points. The [cuts to the short-term capital gain rate](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9216) are responsible for the majority of the benefit in this case, saving this individual $8,092. ![](https://cdn-images-1.medium.com/max/2988/0*y1BvVcRcT2GzdAh1) @@ -100,7 +100,7 @@ Each receives $21,348 per year in Social Security retirement benefits, the avera Their home is worth $545,865, [Zillow’s estimated median for the state,](https://www.zillow.com/home-values/26/ma/) and they pay a 1.12% property tax rate, [SmartAsset’s estimated average](https://smartasset.com/taxes/massachusetts-property-tax-calculator#:~:text=Overview%20of%20Massachusetts%20Taxes&text=The%20median%20annual%20property%20tax,the%20national%20average%20at%200.99%25.) for the state. That is, they pay $6,114 per year in property taxes. -Governor Healey’s proposal would [provide them a $784 net gain if they have no earnings](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9123), falling to zero if they earn at least $8,000. +Governor Healey’s proposal would [provide them a $784 net gain if they have no earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=5842®ion=ma&timePeriod=2023&baseline=2&household=9123), falling to zero if they earn at least $8,000. ![](https://cdn-images-1.medium.com/max/2908/0*2krJxIELH3ov4klK) @@ -118,37 +118,37 @@ PolicyEngine’s microsimulation model pairs our tax-benefit rules engine with t ## Budget -Compared to the Finance Director’s report, PolicyEngine projects lower costs of each provision: 11% lower for the Child & Family Credit and 35% lower for the capital gains cut. We will release a [more accurate version of the CPS](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) this year to address under-reporting of income and benefits. +Compared to the Finance Director’s report, PolicyEngine projects lower costs of each provision: 11% lower for the Child & Family Credit and 35% lower for the capital gains cut. We will release a [more accurate version of the CPS](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) this year to address under-reporting of income and benefits. ![](https://cdn-images-1.medium.com/max/2632/1*A_fXJDNYYLxJ2f61JzBjnA.png) -[The Child & Family Credit would reduce the Gini index](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5365®ion=ma&timePeriod=2023&baseline=2) of income inequality by 0.2%, while the [capital gains cut would increase the Gini index](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5830®ion=ma&timePeriod=2023&baseline=2) by less than 0.1%. +[The Child & Family Credit would reduce the Gini index](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5365®ion=ma&timePeriod=2023&baseline=2) of income inequality by 0.2%, while the [capital gains cut would increase the Gini index](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5830®ion=ma&timePeriod=2023&baseline=2) by less than 0.1%. ## Distributional impact -Together, the two provisions PolicyEngine models population impacts for — the Child & Family Credit and the short-term capital gains cut — would [increase the average household’s net income by $173](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2), disproportionately among higher income households. +Together, the two provisions PolicyEngine models population impacts for — the Child & Family Credit and the short-term capital gains cut — would [increase the average household’s net income by $173](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2), disproportionately among higher income households. ![](https://cdn-images-1.medium.com/max/3628/1*ViMykxuBpi5dmu2ekpTl7g.png) -These provisions would [raise the average household’s net income by 0.2%](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2), disproportionately among lower income deciles. +These provisions would [raise the average household’s net income by 0.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2), disproportionately among lower income deciles. ![](https://cdn-images-1.medium.com/max/3604/1*pbN71nCWONDxm48BnCdkOw.png) -[38% of Massachusettsans](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) live in households that would benefit from the two provisions. A larger share of higher-income households would gain, while a larger share of lower-income households would gain at least 5% of net income (dark green). The provisions do not leave any households worse off than baseline policy. +[38% of Massachusettsans](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) live in households that would benefit from the two provisions. A larger share of higher-income households would gain, while a larger share of lower-income households would gain at least 5% of net income (dark green). The provisions do not leave any households worse off than baseline policy. ![](https://cdn-images-1.medium.com/max/3644/1*mp0yQsc2_A5tTX3KDE39WA.png) -PolicyEngine projects [no poverty impact](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) of the Child & Family Credit and short-term capital gains cut, while deep poverty (the population share in households with resources below half their poverty line) would [fall 1.6%](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2). +PolicyEngine projects [no poverty impact](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) of the Child & Family Credit and short-term capital gains cut, while deep poverty (the population share in households with resources below half their poverty line) would [fall 1.6%](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2). _PolicyEngine’s poverty impacts in small states are noisy, due to using a single year’s Current Population Survey._ ![](https://cdn-images-1.medium.com/max/3668/1*FxLPdCVJYlXYqVvBWmjSDw.png) -The two provisions would [reduce each measure of income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) we report. +The two provisions would [reduce each measure of income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2) we report. ![](https://cdn-images-1.medium.com/max/3628/1*FN1z8kPnbj_pDk9Yi_pR5A.png) -While the reforms alter marginal tax rates, we do not project any [impact on cliffs](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2). Like poverty estimates, cliffs are a dichotomous household outcome that can be noisy in small states. +While the reforms alter marginal tax rates, we do not project any [impact on cliffs](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=5902®ion=ma&timePeriod=2023&baseline=2). Like poverty estimates, cliffs are a dichotomous household outcome that can be noisy in small states. ## Conclusion diff --git a/src/posts/articles/medlock-donation-calculator.md b/src/posts/articles/medlock-donation-calculator.md index 40b805943..de3c5d4ad 100644 --- a/src/posts/articles/medlock-donation-calculator.md +++ b/src/posts/articles/medlock-donation-calculator.md @@ -44,15 +44,15 @@ As an example, suppose Medlock earns $100,000 from self-employment, and his wife ![](https://cdn-images-1.medium.com/max/3012/0*GnNvsUqhT-LxtSpt) -[The main PolicyEngine app shows](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=16581) that, between payroll tax, self-employment tax, federal income tax, and California income tax, they would pay $58,949 in taxes, leaving a net income of $141,051 (they would not be eligible for any benefits).[^1] +[The main PolicyEngine app shows](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=16581) that, between payroll tax, self-employment tax, federal income tax, and California income tax, they would pay $58,949 in taxes, leaving a net income of $141,051 (they would not be eligible for any benefits).[^1] [^1]: California has not yet released its 2023 tax bracket thresholds, so we use values from 2022. -Now with $1 million in gambling winnings, their [tax bill will rise $436,115](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=16582) from $58,949 to $495,064; federal income taxes rise from $26,967 to $361,051, California income taxes rise from $10,202 to $112,233, and payroll and self-employment taxes stay the same. Their net income rises by the remaining $563,886 to $704,937 if he doesn’t donate anything. +Now with $1 million in gambling winnings, their [tax bill will rise $436,115](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=16582) from $58,949 to $495,064; federal income taxes rise from $26,967 to $361,051, California income taxes rise from $10,202 to $112,233, and payroll and self-employment taxes stay the same. Their net income rises by the remaining $563,886 to $704,937 if he doesn’t donate anything. -To take home $300,000, they might consider donating $700,000. But if they did so, their [taxes would rise $119,088](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=16583), leaving them with only $300,000 — $119,088 = $180,912 net. How much less than $700,000 of a donation will offset the tax change? +To take home $300,000, they might consider donating $700,000. But if they did so, their [taxes would rise $119,088](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=16583), leaving them with only $300,000 — $119,088 = $180,912 net. How much less than $700,000 of a donation will offset the tax change? -Our app shows that, for Medlock’s net income to rise by $300,000, he should donate **$484,848**. [In this scenario](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=16586), his taxes would rise $215,235. (This actually leaves him $299,917; we run an optimization process that gets within $100 or so to save time.) +Our app shows that, for Medlock’s net income to rise by $300,000, he should donate **$484,848**. [In this scenario](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=16586), his taxes would rise $215,235. (This actually leaves him $299,917; we run an optimization process that gets within $100 or so to save time.) We also show various donation scenarios as a table: diff --git a/src/posts/articles/medlock-wins.md b/src/posts/articles/medlock-wins.md index 5c43da710..d3641ddc3 100644 --- a/src/posts/articles/medlock-wins.md +++ b/src/posts/articles/medlock-wins.md @@ -4,7 +4,7 @@ Today Medlock announced the settlement of the bet, revealing that Srinivasan had

It's nice that my original plan to give myself my desired 70% tax rate worked out to nice round numbers, thanks again to @ThePolicyEngine for helping me figure out how much to donatehttps://t.co/p9FPW45xKD

— James Medlock (@jdcmedlock) May 2, 2023
-In [our March 23 blog post](https://policyengine.org/us/blog/medlock-donation-calculator), we presented a [mini-app](https://policyengine-james-medlock-donation-solver.streamlit.app/) built with the [policyengine-us Python package](http://github.com/policyengine/policyengine-us) to calculate how much Medlock should donate to GiveDirectly in order to fulfill his pledge of achieving a 70% effective tax rate between taxes and donations. Our calculations ranged from $333,000 to $565,000, depending on Medlock’s other income. +In [our March 23 blog post](https://legacy.policyengine.org/us/blog/medlock-donation-calculator), we presented a [mini-app](https://policyengine-james-medlock-donation-solver.streamlit.app/) built with the [policyengine-us Python package](http://github.com/policyengine/policyengine-us) to calculate how much Medlock should donate to GiveDirectly in order to fulfill his pledge of achieving a 70% effective tax rate between taxes and donations. Our calculations ranged from $333,000 to $565,000, depending on Medlock’s other income. ![Medlock’s optimal donation size, assuming he and his wife each earn $100,000.](https://miro.medium.com/v2/0*BG6ygtFTdgcXdm_a) @@ -20,4 +20,4 @@ GiveDirectly, too, has confirmed and shared the outcome (note our Twitter accoun We are thrilled that our `policyengine-us` Python package and Streamlit-built dashboarding app could contribute to this charitable outcome by providing Medlock with the necessary calculations to determine his donation amount. This example demonstrates the power and flexibility of our Python packages, and we look forward to continuing to build tools that can answer unique questions and support decision-making in various scenarios. -To learn more about how our free tax calculator guided the decision on Medlock’s donation amount, please refer to our previous blog post: [How much should James Medlock donate to GiveDirectly?](https://policyengine.org/us/blog/medlock-donation-calculator) +To learn more about how our free tax calculator guided the decision on Medlock’s donation amount, please refer to our previous blog post: [How much should James Medlock donate to GiveDirectly?](https://legacy.policyengine.org/us/blog/medlock-donation-calculator) diff --git a/src/posts/articles/michigan-bill-hb4170.ipynb b/src/posts/articles/michigan-bill-hb4170.ipynb index 7bbf1fd46..be4d59d0b 100644 --- a/src/posts/articles/michigan-bill-hb4170.ipynb +++ b/src/posts/articles/michigan-bill-hb4170.ipynb @@ -15,7 +15,7 @@ "* Lowers the state's Supplemental Poverty Measure by 0.02%\n", "* Increases the Gini index of income inequality by 0.07%\n", "\n", - "*Use PolicyEngine to view the [full results](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.policyBreakdown®ion=mi&timePeriod=2025&baseline=2) or calculate the [effect on your household](https://policyengine.org/us/household?reform=77567&focus=intro®ion=mi&timePeriod=2025&baseline=2).*" + "*Use PolicyEngine to view the [full results](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.policyBreakdown®ion=mi&timePeriod=2025&baseline=2) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?reform=77567&focus=intro®ion=mi&timePeriod=2025&baseline=2).*" ] }, { @@ -50,7 +50,7 @@ "source": [ "## Household Impacts\n", "\n", - "Higher-income households receive larger tax savings due to their higher taxable income and initial tax liability. A childless couple in Michigan earning $30,000 receives [$67](https://policyengine.org/us/household?reform=77567&focus=householdOutput.earnings®ion=mi&timePeriod=2025&baseline=2&household=52179) from the rate reduction, while the same household type gains [$277](https://policyengine.org/us/household?reform=77567&focus=householdOutput.netIncome®ion=mi&timePeriod=2025&baseline=2&household=51836) at $150,000 of earnings or [$1,177](https://policyengine.org/us/household?reform=77567&focus=householdOutput.netIncome®ion=mi&timePeriod=2025&baseline=2&household=51837) at $600,000." + "Higher-income households receive larger tax savings due to their higher taxable income and initial tax liability. A childless couple in Michigan earning $30,000 receives [$67](https://legacy.policyengine.org/us/household?reform=77567&focus=householdOutput.earnings®ion=mi&timePeriod=2025&baseline=2&household=52179) from the rate reduction, while the same household type gains [$277](https://legacy.policyengine.org/us/household?reform=77567&focus=householdOutput.netIncome®ion=mi&timePeriod=2025&baseline=2&household=51836) at $150,000 of earnings or [$1,177](https://legacy.policyengine.org/us/household?reform=77567&focus=householdOutput.netIncome®ion=mi&timePeriod=2025&baseline=2&household=51837) at $600,000." ] }, { @@ -112,7 +112,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "Figure 1 shows the [change in household net income](https://policyengine.org/us/household?reform=77567&focus=householdOutput.earnings®ion=mi&timePeriod=2025&baseline=2&household=51836) for a childless couple in 2025. The couple does not have any tax liability for earnings up to $11,250 due to the state exemption amount. The household is not eligible to receive any standard deduction amounts as they are only applied to filers aged 67 and older." + "Figure 1 shows the [change in household net income](https://legacy.policyengine.org/us/household?reform=77567&focus=householdOutput.earnings®ion=mi&timePeriod=2025&baseline=2&household=51836) for a childless couple in 2025. The couple does not have any tax liability for earnings up to $11,250 due to the state exemption amount. The household is not eligible to receive any standard deduction amounts as they are only applied to filers aged 67 and older." ] }, { @@ -406,14 +406,14 @@ "source": [ "## Statewide Impacts\n", "\n", - "PolicyEngine's static model indicates the income tax cut would [reduce state revenues](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.budgetaryImpact.overall®ion=mi&timePeriod=2025&baseline=2) by $644.8 million in tax year 2025. Federal revenues rise by $455,000 due to the state and local tax deduction." + "PolicyEngine's static model indicates the income tax cut would [reduce state revenues](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.budgetaryImpact.overall®ion=mi&timePeriod=2025&baseline=2) by $644.8 million in tax year 2025. Federal revenues rise by $455,000 due to the state and local tax deduction." ] }, { "cell_type": "markdown", "metadata": {}, "source": [ - "The measure [increases net income](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.winnersAndLosers.incomeDecile®ion=mi&timePeriod=2025&baseline=2) for 75% of Michigan residents. By income level, 14% of the population in the first income decile and 100% in the top decile would receive a net gain from the 2025 tax cuts." + "The measure [increases net income](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.winnersAndLosers.incomeDecile®ion=mi&timePeriod=2025&baseline=2) for 75% of Michigan residents. By income level, 14% of the population in the first income decile and 100% in the top decile would receive a net gain from the 2025 tax cuts." ] }, { @@ -762,7 +762,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "Households would receive an [average benefit of $153](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=mi&timePeriod=2025&baseline=2), ranging from $5 in the bottom income decile to $747 in the top decile." + "Households would receive an [average benefit of $153](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=mi&timePeriod=2025&baseline=2), ranging from $5 in the bottom income decile to $747 in the top decile." ] }, { @@ -862,7 +862,7 @@ "source": [ "## Inequality and Poverty Impact\n", "\n", - "The tax reduction would increase Michigan's Gini index of income inequality by [0.07%](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.inequalityImpact®ion=mi&timePeriod=2025&baseline=2). We project it to [reduce the state's poverty rate](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.povertyImpact.regular.byAge®ion=mi&timePeriod=2025&baseline=2) by 0.02% according to the Supplemental Poverty Measure, while [deep poverty levels remain unchanged](https://policyengine.org/us/policy?reform=77567&focus=policyOutput.povertyImpact.deep.byAge®ion=mi&timePeriod=2025&baseline=2)." + "The tax reduction would increase Michigan's Gini index of income inequality by [0.07%](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.inequalityImpact®ion=mi&timePeriod=2025&baseline=2). We project it to [reduce the state's poverty rate](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.povertyImpact.regular.byAge®ion=mi&timePeriod=2025&baseline=2) by 0.02% according to the Supplemental Poverty Measure, while [deep poverty levels remain unchanged](https://legacy.policyengine.org/us/policy?reform=77567&focus=policyOutput.povertyImpact.deep.byAge®ion=mi&timePeriod=2025&baseline=2)." ] }, { @@ -875,7 +875,7 @@ "\n", "Tools like PolicyEngine provide data for policymakers evaluating such reforms, offering insights into impacts on various household types and the broader economy.\n", "\n", - "We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms." + "We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms." ] } ], diff --git a/src/posts/articles/mn-hf1938-walz.md b/src/posts/articles/mn-hf1938-walz.md index f9dd1459c..9b87ba420 100644 --- a/src/posts/articles/mn-hf1938-walz.md +++ b/src/posts/articles/mn-hf1938-walz.md @@ -12,9 +12,9 @@ PolicyEngine’s static microsimulation results for 2023 project that HF1938’s This report describes provisions of HF1938, illustrates the impacts with hypothetical households, and summarizes projected Minnesota-wide impacts. -[_See the Minnesota impacts_](https://policyengine.org/us/policy?reform=2&focus=policyOutput.policyBreakdown®ion=mn&timePeriod=2023&baseline=63889&household=46737) +[_See the Minnesota impacts_](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.policyBreakdown®ion=mn&timePeriod=2023&baseline=63889&household=46737) -[_See how HF1938 would affect your own household_](https://policyengine.org/us/household?reform=2&focus=intro®ion=mn&timePeriod=2023&baseline=63889) +[_See how HF1938 would affect your own household_](https://legacy.policyengine.org/us/household?reform=2&focus=intro®ion=mn&timePeriod=2023&baseline=63889) # Provisions of HF1938 @@ -57,7 +57,7 @@ The new law introduces a combined Child and Working Family Tax Credit, replacing ## Child and Working Family Credit -The new Child and Working Family Tax Credit provides up to $3,385 to eligible Minnesota households. For instance, a single parent with two children (ages 10 and 5) earning $30,000 now receives an additional [$1,656](https://policyengine.org/us/household?reform=2&focus=householdOutput.netIncome®ion=mn&timePeriod=2023&baseline=63889&household=46721) in refundable credits under the new structure. +The new Child and Working Family Tax Credit provides up to $3,385 to eligible Minnesota households. For instance, a single parent with two children (ages 10 and 5) earning $30,000 now receives an additional [$1,656](https://legacy.policyengine.org/us/household?reform=2&focus=householdOutput.netIncome®ion=mn&timePeriod=2023&baseline=63889&household=46721) in refundable credits under the new structure. The following graph shows how the reform affects a married couple with two children as well as for a single parent:[^1] @@ -67,13 +67,13 @@ The following graph shows how the reform affects a married couple with two child ![](https://cdn-images-1.medium.com/max/2660/0*NTzfwwf6k2PVGxpq) -Looking at the [net impact](https://policyengine.org/us/household?reform=2&focus=householdOutput.earnings®ion=mn&timePeriod=2024&baseline=63834&household=46680), this household could receive up to an additional $3,500 due to the removal of the general earnings requirements for the Child Tax Credit component. The impact gradually reduces as the previous Working Family Credit phases in and spikes once more due to the delayed reduction start. +Looking at the [net impact](https://legacy.policyengine.org/us/household?reform=2&focus=householdOutput.earnings®ion=mn&timePeriod=2024&baseline=63834&household=46680), this household could receive up to an additional $3,500 due to the removal of the general earnings requirements for the Child Tax Credit component. The impact gradually reduces as the previous Working Family Credit phases in and spikes once more due to the delayed reduction start. **Figure 2: Net income impact of the Minnesota Bill HF1938 on a single parent of two (10 and 5) with earnings up to $100k (2023)** ![](https://cdn-images-1.medium.com/max/3200/0*GJSskNDoNTqey6n8) -The credit change also impacts [marginal tax rates](https://policyengine.org/us/household?reform=2&focus=householdOutput.mtr®ion=mn&timePeriod=2024&baseline=63834&household=46680) for the given family. The marginal tax rates increase by as much as 12 percentage points for earnings between $50,000 and $62,000. +The credit change also impacts [marginal tax rates](https://legacy.policyengine.org/us/household?reform=2&focus=householdOutput.mtr®ion=mn&timePeriod=2024&baseline=63834&household=46680) for the given family. The marginal tax rates increase by as much as 12 percentage points for earnings between $50,000 and $62,000. **Figure 3: Marginal Tax Rate changes under the Minnesota Bill HF1938 on a single parent of two (10 and 5) (2023)** @@ -81,7 +81,7 @@ The credit change also impacts [marginal tax rates](https://policyengine.org/us/ ## Reduced Standard Deduction -Zooming out, we can see that the reform reduces [this household’s](https://policyengine.org/us/household?reform=2&focus=householdOutput.earnings®ion=mn&timePeriod=2024&baseline=63834&household=46745) standard deduction for earnings between $310,000 and $775,000. +Zooming out, we can see that the reform reduces [this household’s](https://legacy.policyengine.org/us/household?reform=2&focus=householdOutput.earnings®ion=mn&timePeriod=2024&baseline=63834&household=46745) standard deduction for earnings between $310,000 and $775,000. **Figure 4: How Minnesota Bill HF1938 (2023) affects a joint filer’s standard deduction** @@ -95,7 +95,7 @@ Accordingly, the reform increases this household’s taxes by as much as $966, f ## Social Security and public pension subtractions -To illustrate the changes to the subtractions for Social Security benefits public pensions, consider an individual receiving $25,000 in public pensions (for example, from teaching in public schools) and $20,000 in Social Security benefits. These are both roughly average values. This individual would pay up to $1,500 less in [income tax](https://policyengine.org/us/household?reform=2&focus=householdOutput.netIncome®ion=mn&timePeriod=2023&baseline=63889&household=46737) due to the newly introduced public retirement income subtraction and the adjusted social security income subtraction. +To illustrate the changes to the subtractions for Social Security benefits public pensions, consider an individual receiving $25,000 in public pensions (for example, from teaching in public schools) and $20,000 in Social Security benefits. These are both roughly average values. This individual would pay up to $1,500 less in [income tax](https://legacy.policyengine.org/us/household?reform=2&focus=householdOutput.netIncome®ion=mn&timePeriod=2023&baseline=63889&household=46737) due to the newly introduced public retirement income subtraction and the adjusted social security income subtraction. **Figure 6: Impact of the new subtraction structure under the Minnesota Bill HF1938 on a senior with $25k of public retirement income and $20k of social security retirement income (2023)** @@ -105,13 +105,13 @@ To illustrate the changes to the subtractions for Social Security benefits publi PolicyEngine’s US microsimulation model (version 1.57.1), run over the indexed 2022 Current Population Survey March Supplement for 2023, reveals several key impacts of HF1938’s individual income tax provisions: -- Costs [$444 million](https://policyengine.org/us/policy?reform=2&focus=policyOutput.policyBreakdown®ion=mn&timePeriod=2023&baseline=63889) +- Costs [$444 million](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.policyBreakdown®ion=mn&timePeriod=2023&baseline=63889) -- Lowers Minnesota’s Supplemental Poverty Measure by 1.9%, including [9.4%](https://policyengine.org/us/policy?reform=2&focus=policyOutput.povertyImpact.regular.byAge®ion=mn&timePeriod=2023&baseline=63889) for children and [45.6%](https://policyengine.org/us/policy?reform=2&focus=policyOutput.povertyImpact.deep.byAge®ion=mn&timePeriod=2023&baseline=63889) for deep child poverty +- Lowers Minnesota’s Supplemental Poverty Measure by 1.9%, including [9.4%](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.povertyImpact.regular.byAge®ion=mn&timePeriod=2023&baseline=63889) for children and [45.6%](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.povertyImpact.deep.byAge®ion=mn&timePeriod=2023&baseline=63889) for deep child poverty -- Reduces income inequality in Minnesota: the Gini index falls [0.8%](https://policyengine.org/us/policy?reform=2&focus=policyOutput.inequalityImpact®ion=mn&timePeriod=2023&baseline=63889&household=46737), while the net income share held by the top 1% and 10% each fall 0.2% +- Reduces income inequality in Minnesota: the Gini index falls [0.8%](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.inequalityImpact®ion=mn&timePeriod=2023&baseline=63889&household=46737), while the net income share held by the top 1% and 10% each fall 0.2% -[22%](https://policyengine.org/us/policy?reform=2&focus=policyOutput.winnersAndLosers.incomeDecile®ion=mn&timePeriod=2023&baseline=63889) of residents will experience an increase in their after-tax income due to these changes, including 35% of those in the bottom income decile. Conversely, 4% of residents will see a reduction in their after-tax income, including 38% of those in the top income decile. +[22%](https://legacy.policyengine.org/us/policy?reform=2&focus=policyOutput.winnersAndLosers.incomeDecile®ion=mn&timePeriod=2023&baseline=63889) of residents will experience an increase in their after-tax income due to these changes, including 35% of those in the bottom income decile. Conversely, 4% of residents will see a reduction in their after-tax income, including 38% of those in the top income decile. **Figure 7: Winners and Losers from the Minnesota Bill HF1938 by Decile (2023)** diff --git a/src/posts/articles/montana-tax-cuts-2026.md b/src/posts/articles/montana-tax-cuts-2026.md index c221b16b0..cd795d115 100644 --- a/src/posts/articles/montana-tax-cuts-2026.md +++ b/src/posts/articles/montana-tax-cuts-2026.md @@ -12,7 +12,7 @@ Key results in 2027: - Raises the Gini index of income inequality by 0.16% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=mt&timePeriod=2027&baseline=82949) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=2®ion=mt&timePeriod=2027&baseline=82949)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=mt&timePeriod=2027&baseline=82949) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=2®ion=mt&timePeriod=2027&baseline=82949)._ ## Montana's Recent Income Tax Reforms @@ -42,11 +42,11 @@ The reforms passed in House Bill 337 will continue to lower the tax liability fo As the tax package comprises several components, different household compositions will see varying impacts to their net income. Let's examine a few examples. -For a single adult with no children and $10,000 of earnings, the tax provisions increase their net income [by $69 in 2026](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53241) and [$68 in 2027](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53566), solely from the doubled EITC match. +For a single adult with no children and $10,000 of earnings, the tax provisions increase their net income [by $69 in 2026](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53241) and [$68 in 2027](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53566), solely from the doubled EITC match. -A single parent of two kids with an annual income of $50,000 will see a [$252 increase to their net income](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53576) due to House Bill 337: $179 from the expanded EITC, and $73 from the lower bracket threshold. In 2027, their net income [rises by $266](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53577), with $205 from the EITC and $61 in reduced state income taxes. Figures 1 and 2 show the change in net income for this household as earnings rise for 2026 and 2027, respectively. +A single parent of two kids with an annual income of $50,000 will see a [$252 increase to their net income](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53576) due to House Bill 337: $179 from the expanded EITC, and $73 from the lower bracket threshold. In 2027, their net income [rises by $266](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53577), with $205 from the EITC and $61 in reduced state income taxes. Figures 1 and 2 show the change in net income for this household as earnings rise for 2026 and 2027, respectively. -A married couple with no dependents and $200,000 of earnings will see the largest change in net income of the examined households. As their income exceeds the eligible range for the EITC, they only benefit from the reduction of Montana's top income tax rate and the expansion of the lower tax bracket thresholds. In 2026, their [tax savings total $853](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53586); in 2027, their [liability drops by $1,306](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53590). +A married couple with no dependents and $200,000 of earnings will see the largest change in net income of the examined households. As their income exceeds the eligible range for the EITC, they only benefit from the reduction of Montana's top income tax rate and the expansion of the lower tax bracket thresholds. In 2026, their [tax savings total $853](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53586); in 2027, their [liability drops by $1,306](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=mt&timePeriod=2026&baseline=82949&household=53590). **Table 2: Change in Net Income Based on Household Composition** @@ -68,35 +68,35 @@ A single parent with two kids initially sees an increase in their net income sol ## Statewide Impacts 2026 -For tax year 2026, Montana's latest income tax changes will [reduce state revenues by $167.7 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=mt&timePeriod=2026&baseline=82949), according to PolicyEngine's static modeling based on the Current Population Survey. +For tax year 2026, Montana's latest income tax changes will [reduce state revenues by $167.7 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=mt&timePeriod=2026&baseline=82949), according to PolicyEngine's static modeling based on the Current Population Survey. -The tax changes will [raise the net income of 75.9% of residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=mt&timePeriod=2026&baseline=82949) in Montana. The percentage of residents in each income decile who are net beneficiaries will vary. For example, 14% of residents in the lowest income decile will see their net income increase, while all residents in the top two deciles will see a gain. +The tax changes will [raise the net income of 75.9% of residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=mt&timePeriod=2026&baseline=82949) in Montana. The percentage of residents in each income decile who are net beneficiaries will vary. For example, 14% of residents in the lowest income decile will see their net income increase, while all residents in the top two deciles will see a gain. **Figure 3: Winners of Montana's Income Tax Package by Decile for 2026** ![](https://cdn-images-1.medium.com/max/2000/1*39scSjSHATzhlt02bLACmA.png) -Montana's new tax package will provide an [average benefit of $318 per household](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2026&baseline=82949) in 2026, ranging from $16 in the bottom income decile to $1,033 in the top decile (as defined by the nationwide income distribution). +Montana's new tax package will provide an [average benefit of $318 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2026&baseline=82949) in 2026, ranging from $16 in the bottom income decile to $1,033 in the top decile (as defined by the nationwide income distribution). **Figure 4: Average Benefit of Montana's Income Tax Changes by Decile for 2026** ![](https://cdn-images-1.medium.com/max/2000/1*PQrfC3BSFz3B0HO_ElrHRg.png) -We project the tax changes to [reduce poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=mt&timePeriod=2026&baseline=82949) (using the Supplemental Poverty Measure) by 0.4%, while lowering child poverty by 1.9%. The individual income tax reforms will have [no impact on deep poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=2®ion=mt&timePeriod=2026&baseline=82949). +We project the tax changes to [reduce poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=mt&timePeriod=2026&baseline=82949) (using the Supplemental Poverty Measure) by 0.4%, while lowering child poverty by 1.9%. The individual income tax reforms will have [no impact on deep poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=2®ion=mt&timePeriod=2026&baseline=82949). -The state's Gini index of inequality [will increase by 0.05%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=mt&timePeriod=2026&baseline=82949), while the top 1%'s share of total net income will fall by 0.06% +The state's Gini index of inequality [will increase by 0.05%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=mt&timePeriod=2026&baseline=82949), while the top 1%'s share of total net income will fall by 0.06% ## Statewide Impacts for 2027 -In 2027, Montana's income tax changes as part of House Bill 337 will [lower the state's revenues by $244.7 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=mt&timePeriod=2027&baseline=82949), using static modeling. +In 2027, Montana's income tax changes as part of House Bill 337 will [lower the state's revenues by $244.7 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=mt&timePeriod=2027&baseline=82949), using static modeling. -Additionally, 76.7% of Montana residents will see [an increase in their net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=mt&timePeriod=2027&baseline=82949). As in 2026, the percentage of residents who are better off under the reform will vary by income decile. In the lowest decile, 14% of residents are net beneficiaries, while 100% of Montanans in the three highest deciles will see their net incomes rise. +Additionally, 76.7% of Montana residents will see [an increase in their net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=mt&timePeriod=2027&baseline=82949). As in 2026, the percentage of residents who are better off under the reform will vary by income decile. In the lowest decile, 14% of residents are net beneficiaries, while 100% of Montanans in the three highest deciles will see their net incomes rise. **Figure 5: Winners of Montana's Income Tax Package by Decile for 2027** ![](https://cdn-images-1.medium.com/max/2000/1*B-YVYsZ5cacRqn4dOcK6Mg.png) -House Bill 337's provisions are projected to provide an average benefit of [$456 per household](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2027&baseline=82949) in 2027. This will range from $17 in the bottom income decile to $1,784 in the tenth decile. +House Bill 337's provisions are projected to provide an average benefit of [$456 per household](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2027&baseline=82949) in 2027. This will range from $17 in the bottom income decile to $1,784 in the tenth decile. **Figure 6: Average Benefit of Montana's Income Tax Changes by Decile for 2027** @@ -104,16 +104,16 @@ House Bill 337's provisions are projected to provide an average benefit of [$456 Montana's individual income tax changes will have the following effects on poverty and inequality in 2027: -- [Lower the SPM](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=mt&timePeriod=2027&baseline=82949) by 0.8% and child poverty by 3.2%, +- [Lower the SPM](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=mt&timePeriod=2027&baseline=82949) by 0.8% and child poverty by 3.2%, -- Have [no effect](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=2®ion=mt&timePeriod=2027&baseline=82949&household=53576) on deep poverty, +- Have [no effect](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=2®ion=mt&timePeriod=2027&baseline=82949&household=53576) on deep poverty, -- Raise the Gini index of inequality [by 0.16%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=mt&timePeriod=2027&baseline=82949), and the top 1%'s share of net income by 0.05% +- Raise the Gini index of inequality [by 0.16%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=mt&timePeriod=2027&baseline=82949), and the top 1%'s share of net income by 0.05% ## Conclusion -Montana's individual tax reforms, as part of House Bill 337, will lower the state's top marginal tax rate, increase the income thresholds for the bottom bracket, and double the state's match to the federal EITC. The budgetary effect of these reforms will lower state revenues by $168 million in 2026 and $245 million in 2027. Between 76% and 77% of residents will benefit each year, with the average household benefit totaling $318 in 2026, before increasing to $456 in 2027. The net benefits will vary based on family income, but households in the top decile will receive the largest average absolute gain in [2026](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2026&baseline=82949) and [2027](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2027&baseline=82949). When all provisions are active in 2027, poverty in the state will fall by 0.8% while income inequality will rise by 0.16%, as measured by the Gini index. +Montana's individual tax reforms, as part of House Bill 337, will lower the state's top marginal tax rate, increase the income thresholds for the bottom bracket, and double the state's match to the federal EITC. The budgetary effect of these reforms will lower state revenues by $168 million in 2026 and $245 million in 2027. Between 76% and 77% of residents will benefit each year, with the average household benefit totaling $318 in 2026, before increasing to $456 in 2027. The net benefits will vary based on family income, but households in the top decile will receive the largest average absolute gain in [2026](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2026&baseline=82949) and [2027](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=mt&timePeriod=2027&baseline=82949). When all provisions are active in 2027, poverty in the state will fall by 0.8% while income inequality will rise by 0.16%, as measured by the Gini index. As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. diff --git a/src/posts/articles/multi-agent-workflows-policy-research.md b/src/posts/articles/multi-agent-workflows-policy-research.md index 1dc91a78b..71e5ff29a 100644 --- a/src/posts/articles/multi-agent-workflows-policy-research.md +++ b/src/posts/articles/multi-agent-workflows-policy-research.md @@ -1,4 +1,4 @@ -When we finished our [UK carbon dividend analysis](https://policyengine.org/uk/research/uk-carbon-tax-dividend) this autumn, we wondered whether [Claude Code's](https://claude.com/claude-code) multi-agent system could have automated parts of the research workflow. We tested it on a similar policy analysis to find out. +When we finished our [UK carbon dividend analysis](https://legacy.policyengine.org/uk/research/uk-carbon-tax-dividend) this autumn, we wondered whether [Claude Code's](https://claude.com/claude-code) multi-agent system could have automated parts of the research workflow. We tested it on a similar policy analysis to find out. ## Building a multi-agent research workflow diff --git a/src/posts/articles/myfriendben-nc.md b/src/posts/articles/myfriendben-nc.md index 356a8d39e..ba25835a5 100644 --- a/src/posts/articles/myfriendben-nc.md +++ b/src/posts/articles/myfriendben-nc.md @@ -4,7 +4,7 @@ We're pleased to share that [MyFriendBen has launched in North Carolina](https:/ Durham-based nonprofit [Code the Dream](https://codethedream.org), in partnership with [MyFriendBen](https://myfriendben.org) and [NC 211](https://nc211.org), has brought this tool to North Carolina residents. MyFriendBen-NC ([bennc.org](https://bennc.org)) offers North Carolinians a way to discover which benefits and tax credits they may qualify for, including food assistance, health insurance, child care subsidies, and more. -The tool integrates with [PolicyEngine's open-source API](https://policyengine.org/us/api), which provides calculations for federal and state tax credits and major benefit programs like SNAP, Medicaid, SSI, and TANF. By using our computational models, MyFriendBen can generate personalized reports with over 90% accuracy in approximately six minutes. +The tool integrates with [PolicyEngine's open-source API](https://legacy.policyengine.org/us/api), which provides calculations for federal and state tax credits and major benefit programs like SNAP, Medicaid, SSI, and TANF. By using our computational models, MyFriendBen can generate personalized reports with over 90% accuracy in approximately six minutes. ## Informing North Carolina Residents @@ -35,7 +35,7 @@ We believe this model of collaboration—where specialized tools like our API ca Are you a developer or organization interested in integrating tax and benefit calculations into your own tools? The PolicyEngine API that powers MyFriendBen's calculations is available for your projects as well. -[Our open-source API](https://policyengine.org/us/api) can help you: +[Our open-source API](https://legacy.policyengine.org/us/api) can help you: - Calculate eligibility and benefit amounts for major programs like SNAP, Medicaid, SSI, and TANF - Estimate federal and state tax liabilities and credits diff --git a/src/posts/articles/neo-philanthropy.md b/src/posts/articles/neo-philanthropy.md index 6d4c71024..5d28bd4c0 100644 --- a/src/posts/articles/neo-philanthropy.md +++ b/src/posts/articles/neo-philanthropy.md @@ -6,4 +6,4 @@ Through this support, PolicyEngine will continue expanding our technological cap _About PolicyEngine:_ -PolicyEngine's free, open-source platform empowers users to analyze how public policies affect their households and communities through advanced microsimulation modeling and interactive data visualizations. Learn more at [policyengine.org](https://policyengine.org). +PolicyEngine's free, open-source platform empowers users to analyze how public policies affect their households and communities through advanced microsimulation modeling and interactive data visualizations. Learn more at [policyengine.org](https://legacy.policyengine.org). diff --git a/src/posts/articles/new-mexico-income-tax-launch.md b/src/posts/articles/new-mexico-income-tax-launch.md index 52ccfb5b8..f612431fb 100644 --- a/src/posts/articles/new-mexico-income-tax-launch.md +++ b/src/posts/articles/new-mexico-income-tax-launch.md @@ -26,15 +26,15 @@ PolicyEngine now models these rules from 2021 to 2023 (as available). ## Example household -To illustrate the New Mexico income tax, consider a single parent with two children, paying $1,000 per month in rent and $500 per month in childcare. If they earn $30,000, they will pay no state income tax and [receive $2,127 from four refundable tax credits](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=33113). +To illustrate the New Mexico income tax, consider a single parent with two children, paying $1,000 per month in rent and $500 per month in childcare. If they earn $30,000, they will pay no state income tax and [receive $2,127 from four refundable tax credits](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=33113). ![](https://cdn-images-1.medium.com/max/2948/0*GfIZU3Qdmhw82mfM) -This filer would have negative [net state tax liability](https://policyengine.org/us/household?focus=householdOutput.earnings&household=33113) if they earn $50,000 or less. +This filer would have negative [net state tax liability](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=33113) if they earn $50,000 or less. ![](https://cdn-images-1.medium.com/max/3104/0*l58k4e3xc5HUKbBZ) -To show the effect of the state’s income taxes on marginal tax rates, we can abolish New Mexico income taxes (separately as before refundable credits and refundable credits) and swap the baseline and reform. From there, view the [marginal tax rate chart](https://policyengine.org/us/household?focus=householdOutput.mtr&household=33113®ion=us&timePeriod=2023&baseline=22176&reform=2) and select _Difference_. +To show the effect of the state’s income taxes on marginal tax rates, we can abolish New Mexico income taxes (separately as before refundable credits and refundable credits) and swap the baseline and reform. From there, view the [marginal tax rate chart](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&household=33113®ion=us&timePeriod=2023&baseline=22176&reform=2) and select _Difference_. ![](https://cdn-images-1.medium.com/max/3076/0*wC8StujJOgS34Kj4) @@ -44,17 +44,17 @@ As the filer earns up to $15,000 or so, their state tax credits and rebates phas Simulating over the 2021 Current Population Survey, and reversing the abolition of New Mexico taxes, we can estimate the impact of New Mexico’s state income taxes. PolicyEngine estimates that the full system: -- [Raises $1.3 billion per year](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=nm&timePeriod=2023&baseline=22000) +- [Raises $1.3 billion per year](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=nm&timePeriod=2023&baseline=22000) -- [Benefits 41% of New Mexicans](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&household=32970®ion=nm&timePeriod=2023&baseline=21992&reform=2), including 96% of those in the bottom income decile and 0% in the top income decile +- [Benefits 41% of New Mexicans](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&household=32970®ion=nm&timePeriod=2023&baseline=21992&reform=2), including 96% of those in the bottom income decile and 0% in the top income decile -- Lowers the Gini index of [income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=32970®ion=nm&timePeriod=2023&baseline=21992&reform=2) by 3.6% +- Lowers the Gini index of [income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=32970®ion=nm&timePeriod=2023&baseline=21992&reform=2) by 3.6% -- Has no discernible impact on [poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=nm&timePeriod=2023&baseline=22000) or [cliffs](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=2®ion=nm&timePeriod=2023&baseline=22000) +- Has no discernible impact on [poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=nm&timePeriod=2023&baseline=22000) or [cliffs](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=2®ion=nm&timePeriod=2023&baseline=22000) ![](https://cdn-images-1.medium.com/max/3064/1*mT4JTaCi2c6PT1eIG69epg.png) -These estimates may not align with official government figures, given inaccuracies and gaps in the Current Population Survey. For instance, the CPS does not capture incomes above $1 million, which could deflate tax revenues, though it also does not capture rent or property tax, which could work in the opposite direction via New Mexico’s property tax rebate. We are currently working to [fill these gaps with modern data analytics](https://policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis). +These estimates may not align with official government figures, given inaccuracies and gaps in the Current Population Survey. For instance, the CPS does not capture incomes above $1 million, which could deflate tax revenues, though it also does not capture rent or property tax, which could work in the opposite direction via New Mexico’s property tax rebate. We are currently working to [fill these gaps with modern data analytics](https://legacy.policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis). ## Try it out diff --git a/src/posts/articles/new-york-tanf.md b/src/posts/articles/new-york-tanf.md index 1783740fb..103f490ff 100644 --- a/src/posts/articles/new-york-tanf.md +++ b/src/posts/articles/new-york-tanf.md @@ -10,7 +10,7 @@ Eligibility for the New York TANF program is also determined by demographic fact ## Example household -Consider a [single parent of one](https://policyengine.org/us/household?focus=householdOutput.earnings&household=29579) in the chart below. They could receive up to $252 per month ($3,024 per year) if they earn less than the $150 earnings disregard. The benefit then phases out at 50 cents per dollar of earnings, until it reaches zero when they earn $654 ($7,848 per year). +Consider a [single parent of one](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=29579) in the chart below. They could receive up to $252 per month ($3,024 per year) if they earn less than the $150 earnings disregard. The benefit then phases out at 50 cents per dollar of earnings, until it reaches zero when they earn $654 ($7,848 per year). _This chart doesn’t exactly capture all vertices, as it is in $500 earnings increments._ diff --git a/src/posts/articles/niskanen-center-analysis.md b/src/posts/articles/niskanen-center-analysis.md index 2e2c5ae74..a7da51540 100644 --- a/src/posts/articles/niskanen-center-analysis.md +++ b/src/posts/articles/niskanen-center-analysis.md @@ -6,8 +6,8 @@ PolicyEngine's built-in instant interactive data visualizations powerfully illus ![](/images/posts/niskanen_center_analysis/ctc_graph.png "image_tooltip") -PolicyEngine also empowers consumers of policy reforms to test the analysis and dig deeper. PolicyEngine's free open source model makes our assumptions transparent and enables anyone to design policy reforms. For example, by clicking [here](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=47843®ion=enhanced_) you can see all component reforms and impacts of Niskanen's preferred policy design. +PolicyEngine also empowers consumers of policy reforms to test the analysis and dig deeper. PolicyEngine's free open source model makes our assumptions transparent and enables anyone to design policy reforms. For example, by clicking [here](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=47843®ion=enhanced_) you can see all component reforms and impacts of Niskanen's preferred policy design. -Two other recent Niskanen analyses demonstrate PolicyEngine's versatility. The first, on [Virginia's family benefit policy](https://www.niskanencenter.org/options-for-virginia-to-reform-its-family-tax-benefits/), uses PolicyEngine to calculate the cost of state policy. Examining the recent [Commonwealth Kids Credit proposal](https://thecommonwealthinstitute.org/research/support-virginia-families-through-a-commonwealth-kids-credit/), PolicyEngine predicts a cost of [$873.8 million per year](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=32868®ion=va&timePeriod=2023&baseline=2). The second, an [analysis of the recently passed statewide Child Tax Credit in Illinois](https://www.niskanencenter.org/a-missed-opportunity-to-get-illinois-ctc-right/), also uses PolicyEngine's microsimulation model to predict both costs and impacts. Converting the state's dependent exemption into a fully refundable child tax credit for children under eighteen, [PolicyEngine models](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=57128®ion=il&timePeriod=2024&baseline=2) a cost of approximately $50 million this year and deep child poverty reduction of 11%. PolicyEngine's sheer speed, when combined with its high level of specificity and customizability, makes it an attractive choice for policy analysts across the political spectrum. +Two other recent Niskanen analyses demonstrate PolicyEngine's versatility. The first, on [Virginia's family benefit policy](https://www.niskanencenter.org/options-for-virginia-to-reform-its-family-tax-benefits/), uses PolicyEngine to calculate the cost of state policy. Examining the recent [Commonwealth Kids Credit proposal](https://thecommonwealthinstitute.org/research/support-virginia-families-through-a-commonwealth-kids-credit/), PolicyEngine predicts a cost of [$873.8 million per year](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=32868®ion=va&timePeriod=2023&baseline=2). The second, an [analysis of the recently passed statewide Child Tax Credit in Illinois](https://www.niskanencenter.org/a-missed-opportunity-to-get-illinois-ctc-right/), also uses PolicyEngine's microsimulation model to predict both costs and impacts. Converting the state's dependent exemption into a fully refundable child tax credit for children under eighteen, [PolicyEngine models](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=57128®ion=il&timePeriod=2024&baseline=2) a cost of approximately $50 million this year and deep child poverty reduction of 11%. PolicyEngine's sheer speed, when combined with its high level of specificity and customizability, makes it an attractive choice for policy analysts across the political spectrum. As PolicyEngine grows and improves, institutions like the Niskanen Center can continue their thoughtful analysis in an ever more efficient, intuitive, and user-friendly way. Interested in using PolicyEngine for your own work? Reach out at [hello@policyengine.org](mailto:hello@policyengine.org). diff --git a/src/posts/articles/nsf-pose-phase-1-grant.md b/src/posts/articles/nsf-pose-phase-1-grant.md index 8c3f2a352..17f367a53 100644 --- a/src/posts/articles/nsf-pose-phase-1-grant.md +++ b/src/posts/articles/nsf-pose-phase-1-grant.md @@ -46,7 +46,7 @@ You can view our complete NSF POSE Phase I application materials, including our ## Get involved -We invite researchers, developers, and policy analysts to join our open-source community. Visit our [GitHub repositories](https://github.com/PolicyEngine) to contribute, or explore our platform at [policyengine.org](https://policyengine.org) to see how we're democratizing policy analysis. +We invite researchers, developers, and policy analysts to join our open-source community. Visit our [GitHub repositories](https://github.com/PolicyEngine) to contribute, or explore our platform at [policyengine.org](https://legacy.policyengine.org) to see how we're democratizing policy analysis. The NSF POSE Phase I grant will help PolicyEngine strengthen its open-source ecosystem and expand access to sophisticated policy analysis tools for researchers, policymakers, and citizens alike. diff --git a/src/posts/articles/ny-hochul-budget.md b/src/posts/articles/ny-hochul-budget.md index 9bf2a056e..fdadf7160 100644 --- a/src/posts/articles/ny-hochul-budget.md +++ b/src/posts/articles/ny-hochul-budget.md @@ -62,23 +62,23 @@ Tables 3 and 4 summarize the changes in each program and net income for each exa **Table 3: Change in Net Income Based on Household Composition (2025)** -| Martial Status | Number of Children | Annual Income | Inflation Rebate | ESCC Change | Income Tax Cut | Total Change in Net Income | -| -------------- | ------------------ | ------------- | ---------------- | ----------- | -------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | -| Single | 1 | $0 | $300 | $230 | $0 | [+$530](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=49692®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Single | 1 | $50,000 | $300 | $0 | $38 | [+$338](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51379®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Single | 2 | $160,000 | $0 | $0 | $147 | [+$147](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51399®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Married | 3 | $250,000 | $500 | $0 | $231 | [+$731](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51446®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Married | 3 | $310,000 | $0 | $0 | $291 | [+$291](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Martial Status | Number of Children | Annual Income | Inflation Rebate | ESCC Change | Income Tax Cut | Total Change in Net Income | +| -------------- | ------------------ | ------------- | ---------------- | ----------- | -------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | +| Single | 1 | $0 | $300 | $230 | $0 | [+$530](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=49692®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Single | 1 | $50,000 | $300 | $0 | $38 | [+$338](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51379®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Single | 2 | $160,000 | $0 | $0 | $147 | [+$147](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51399®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Married | 3 | $250,000 | $500 | $0 | $231 | [+$731](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51446®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Married | 3 | $310,000 | $0 | $0 | $291 | [+$291](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=75827) | **Table 4: Change in Net Income Based on Household Composition (2026)** -| Martial Status | Number of Children | Annual Income | ESCC Change | Income Tax Cut | Total Change in Net Income | -| -------------- | ------------------ | ------------- | ----------- | -------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | -| Single | 1 | $0 | $400 | $0 | [+$400](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51394®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Single | 1 | $50,000 | $170 | $76 | [+$246](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51451®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Single | 2 | $160,000 | $0 | $294 | [+$294](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51453®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Married | 3 | $250,000 | $0 | $462 | [+$462](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51456®ion=ny&timePeriod=2025&baseline=2&reform=75827) | -| Married | 3 | $310,000 | $0 | $461 | [+$461](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=51457®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Martial Status | Number of Children | Annual Income | ESCC Change | Income Tax Cut | Total Change in Net Income | +| -------------- | ------------------ | ------------- | ----------- | -------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | +| Single | 1 | $0 | $400 | $0 | [+$400](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51394®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Single | 1 | $50,000 | $170 | $76 | [+$246](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51451®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Single | 2 | $160,000 | $0 | $294 | [+$294](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51453®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Married | 3 | $250,000 | $0 | $462 | [+$462](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51456®ion=ny&timePeriod=2025&baseline=2&reform=75827) | +| Married | 3 | $310,000 | $0 | $461 | [+$461](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=51457®ion=ny&timePeriod=2025&baseline=2&reform=75827) | Figures 2 through 5 display the changes in net income and marginal tax rates for a single parent of two children, ages 3 and 6, (household example 3) based on their annual income (ranging from $0 to $500,000) in 2025 and 2026. @@ -102,19 +102,19 @@ Figures 2 through 5 display the changes in net income and marginal tax rates for For tax year 2025, PolicyEngine projects that these reforms would: -- [Cost $4.8 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), with the following breakdown: +- [Cost $4.8 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), with the following breakdown: - - Inflation Rebates: [$3.7 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76266®ion=ny&timePeriod=2025&baseline=2)[^2] + - Inflation Rebates: [$3.7 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76266®ion=ny&timePeriod=2025&baseline=2)[^2] - - ESCC expansion: [$481 million](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76581®ion=ny&timePeriod=2025&baseline=2) + - ESCC expansion: [$481 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76581®ion=ny&timePeriod=2025&baseline=2) - - Income tax cuts: [$623 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76590) + - Income tax cuts: [$623 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76590) - Lower the state’s Supplemental Poverty Measure by 5.2% - Reduce the Gini index of income inequality by 0.67% -- [Increase net income for 99.4%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) of New York residents (all but 6% of those in the top decile), including an increase of 5% of net income for 51% of those in the bottom decile +- [Increase net income for 99.4%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) of New York residents (all but 6% of those in the top decile), including an increase of 5% of net income for 51% of those in the bottom decile These use PolicyEngine’s microsimulation capabilities through 3 years of pooled data (2021–2023) from the Current Population Survey (CPS), aged to the current year. @@ -122,29 +122,29 @@ These use PolicyEngine’s microsimulation capabilities through 3 years of poole ![](https://cdn-images-1.medium.com/max/2000/0*3OEHXel8uNfoA62E) -The reform provides an average of [$611 per household in 2025](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), varying based on income decile.[^3] Households in the ninth income bracket would receive $781, the highest average benefit of any decile. Though the first decile’s average benefit is the lowest at $404, it represents a [2.5% gain in net income](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) for households, the largest percentage of any decile. +The reform provides an average of [$611 per household in 2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), varying based on income decile.[^3] Households in the ninth income bracket would receive $781, the highest average benefit of any decile. Though the first decile’s average benefit is the lowest at $404, it represents a [2.5% gain in net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) for households, the largest percentage of any decile. **Figure 7: Average Benefit Based on Household Income Decile (2025)** ![](https://cdn-images-1.medium.com/max/2000/0*fvsjuJ247XGUaeju) -In 2025, these proposals would [reduce poverty by 5.2%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) when applying the Supplemental Poverty Measure. The poverty reduction would disproportionally affect children as the child poverty rate would also decrease by 6.4%. Deep poverty and deep child poverty would [drop by 5.0% and 7.3%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), respectively. +In 2025, these proposals would [reduce poverty by 5.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580) when applying the Supplemental Poverty Measure. The poverty reduction would disproportionally affect children as the child poverty rate would also decrease by 6.4%. Deep poverty and deep child poverty would [drop by 5.0% and 7.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), respectively. **Figure 8: Poverty Impact (2025)** ![](https://cdn-images-1.medium.com/max/2000/0*MYtaUAsZ0X6QzbO2) -Finally, the tax reforms would [decrease income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), lowering the state’s Gini index by 0.67% while also reducing the share of income held by the top 10% and 1% of households. +Finally, the tax reforms would [decrease income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=51448®ion=ny&timePeriod=2025&baseline=2&reform=76580), lowering the state’s Gini index by 0.67% while also reducing the share of income held by the top 10% and 1% of households. ## Statewide Impacts 2026 For tax year 2026, PolicyEngine projects that these reforms would: -- Cost [$2.1 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), with the following breakdown: +- Cost [$2.1 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), with the following breakdown: - - ESCC expansion: [$821 million](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76581®ion=ny&timePeriod=2026&baseline=2) + - ESCC expansion: [$821 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=76581®ion=ny&timePeriod=2026&baseline=2) - - Income tax cuts: [$1.3 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76590)[^4] + - Income tax cuts: [$1.3 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76590)[^4] - Increase net income for 83.5% of New York residents @@ -152,25 +152,25 @@ For tax year 2026, PolicyEngine projects that these reforms would: - Reduce the Gini index of income inequality by 0.24% -While both the ESCC expansion and income tax cuts provide more tax benefits to the New York population than they did in 2025, the expiration of the inflation rebates results in a lower impact in every major measurement for 2026. The reform [benefits 83.5%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) of residents in 2025, down from 99.4% in 2025. While 92% or more residents in the top half of the income distribution are net beneficiaries in 2026, 31% in the bottom income decile would see their net incomes increase; the remaining 69% would be unaffected. +While both the ESCC expansion and income tax cuts provide more tax benefits to the New York population than they did in 2025, the expiration of the inflation rebates results in a lower impact in every major measurement for 2026. The reform [benefits 83.5%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) of residents in 2025, down from 99.4% in 2025. While 92% or more residents in the top half of the income distribution are net beneficiaries in 2026, 31% in the bottom income decile would see their net incomes increase; the remaining 69% would be unaffected. **Figure 9: Winners of Hochul’s Tax Proposals (2026)** ![](https://cdn-images-1.medium.com/max/2000/0*rEnFxmyVpTrT0N9l) -The reform provides [$252 on average](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) per household. While the range of average benefit by decile in 2025 was $404 to $781 (first to ninth decile), the 2026 range is $65 to $557 (first and tenth decile). As the inflation rebates expire and income tax cuts double, higher-income households would gain a larger share of the overall tax benefits as they have higher tax liabilities than lower-income families. +The reform provides [$252 on average](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) per household. While the range of average benefit by decile in 2025 was $404 to $781 (first to ninth decile), the 2026 range is $65 to $557 (first and tenth decile). As the inflation rebates expire and income tax cuts double, higher-income households would gain a larger share of the overall tax benefits as they have higher tax liabilities than lower-income families. **Figure 10: Average Benefit Based on Household Income Decile** ![](https://cdn-images-1.medium.com/max/2000/0*RREj76K4gSO-yu2y) -In 2026, the reform would [reduce poverty by 2.5%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), down from 5.5% in 2025. However, it would lower child poverty more, from 6.4% in 2025 to 7.4% in 2026, likely due to the expansion of the ESCC. Deep poverty and deep child poverty impacts fall from 2025, [settling at 1.6% and 5.5%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), respectively. +In 2026, the reform would [reduce poverty by 2.5%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), down from 5.5% in 2025. However, it would lower child poverty more, from 6.4% in 2025 to 7.4% in 2026, likely due to the expansion of the ESCC. Deep poverty and deep child poverty impacts fall from 2025, [settling at 1.6% and 5.5%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580), respectively. **Figure 11: Poverty Impact (2025)** ![](https://cdn-images-1.medium.com/max/2000/0*5yY5SWB9W7PPe5s0) -Income inequality [would decrease](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) as it did in 2025. However, each inequality impact would be lower, including the Gini index (0.67% to 0.24%). +Income inequality [would decrease](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&household=51448®ion=ny&timePeriod=2026&baseline=2&reform=76580) as it did in 2025. However, each inequality impact would be lower, including the Gini index (0.67% to 0.24%). ## Conclusion @@ -180,7 +180,7 @@ The impact of these proposals would shrink in 2026. The total cost would amount As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Impact Summary of Major Tax Proposals for 2025 and 2026 diff --git a/src/posts/articles/ny-wftc.md b/src/posts/articles/ny-wftc.md index 8f97b4aed..0759a0db2 100644 --- a/src/posts/articles/ny-wftc.md +++ b/src/posts/articles/ny-wftc.md @@ -1,6 +1,6 @@ In 2023, New York State Senator Andrew Gounardes introduced a proposal to combine several of the state’s family tax policies into the New York Working Families Tax Credit (NY WFTC). The expanded and fully refundable NY WFTC would provide up to $1,822 per child once fully implemented. Using PolicyEngine, we analyzed the potential impacts of the latest version of the proposal, [Senate Bill S277C](https://www.nysenate.gov/legislation/bills/2023/S277/amendment/C), for tax years 2025 through 2029. We measured the bill’s effects on the New York state budget, household income, poverty, and more. -_See how the Working Family Tax Credit would affect your household with our [personalized calculator](https://policyengine.org/us/household?focus=intro&reform=72622®ion=ny&timePeriod=2025&baseline=2)._ +_See how the Working Family Tax Credit would affect your household with our [personalized calculator](https://legacy.policyengine.org/us/household?focus=intro&reform=72622®ion=ny&timePeriod=2025&baseline=2)._ ## What is the NY WFTC? @@ -49,12 +49,12 @@ Below is a table displaying the change in net income of the examined households **Table 2: Impact of Senate S277C on Various Households** -| Household Composition | Change in Net Income for Tax Year 2025 | Change in Net Income for Tax Year 2029 | -| :----------------------------------: | :-----------------------------------------------------------------------------------------------------------------------------------------------: | :-------------------------------------------------------------------------------------------------------------------------------------------------: | -| **Married, One Child, $0** | [\+$450](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49667) | [\+$1,722](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49707) | -| **Single, One Child, $33,000** | [\+$81](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=47172) | [\+$313](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49717) | -| **Single, One Child, $33,000 (NYC)** | [\+$81](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=50368) | [\+$299](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=50302) | -| **Married Two Children, $80,000** | [\+$440](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49735) | [\+$2,412](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49734) | +| Household Composition | Change in Net Income for Tax Year 2025 | Change in Net Income for Tax Year 2029 | +| :----------------------------------: | :------------------------------------------------------------------------------------------------------------------------------------------------------: | :--------------------------------------------------------------------------------------------------------------------------------------------------------: | +| **Married, One Child, $0** | [\+$450](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49667) | [\+$1,722](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49707) | +| **Single, One Child, $33,000** | [\+$81](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=47172) | [\+$313](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49717) | +| **Single, One Child, $33,000 (NYC)** | [\+$81](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=50368) | [\+$299](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=50302) | +| **Married Two Children, $80,000** | [\+$440](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49735) | [\+$2,412](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=72622®ion=ny&timePeriod=2025&baseline=2&household=49734) | Due to the reduction of the NY EITC over time in Senate Bill S277C, households receiving the EITC’s maximum benefit see the smallest change in net income compared to families with very low incomes and households above the EITC range. To visualize this trend, Figures 3 and 4 below demonstrate how net income changes for a single parent with one child based on household income for 2025 and 2029, respectively. @@ -82,7 +82,7 @@ Using PolicyEngine’s microsimulation capabilities through 3 years of pooled da ## Statewide Impact in 2025 -[PolicyEngine estimates](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2025&baseline=2) that the NY WFTC would in 2025: +[PolicyEngine estimates](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2025&baseline=2) that the NY WFTC would in 2025: - Cost $660 million @@ -94,11 +94,11 @@ Using PolicyEngine’s microsimulation capabilities through 3 years of pooled da ![](https://cdn-images-1.medium.com/max/1000/1*SICGa9ii5d7HiCNy9xiocw.png) -In 2025, the NY WFTC would benefit 30.7% of New York residents as the initial maximum benefit of the NY WFTC ($550) exceeds the existing Empire State Child Credit ($330). This translates to an increase in average net income [across all income deciles](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=72622®ion=ny&timePeriod=2025&baseline=2) and a reduction in [poverty and child poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=72622®ion=ny&timePeriod=2025&baseline=2) of 1.6% and 4.0%, respectively, applying the Supplemental Poverty Measure. Furthermore, higher-income households are unaffected in 2025 as the WFTC’s minimum benefit and Senate Bill S277C’s changes to the dependent exemption do not come into effect until 2026. +In 2025, the NY WFTC would benefit 30.7% of New York residents as the initial maximum benefit of the NY WFTC ($550) exceeds the existing Empire State Child Credit ($330). This translates to an increase in average net income [across all income deciles](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=72622®ion=ny&timePeriod=2025&baseline=2) and a reduction in [poverty and child poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=72622®ion=ny&timePeriod=2025&baseline=2) of 1.6% and 4.0%, respectively, applying the Supplemental Poverty Measure. Furthermore, higher-income households are unaffected in 2025 as the WFTC’s minimum benefit and Senate Bill S277C’s changes to the dependent exemption do not come into effect until 2026. ## Statewide Impact in 2029 -[PolicyEngine estimates](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2029&baseline=2) that the NY WFTC would in 2029: +[PolicyEngine estimates](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2029&baseline=2) that the NY WFTC would in 2029: - Cost $3.1 billion @@ -110,7 +110,7 @@ In 2025, the NY WFTC would benefit 30.7% of New York residents as the initial ma ![](https://cdn-images-1.medium.com/max/1000/1*qp0po4EGMoqHejBO9Y-HTw.png) -Once the NY WFTC phases in completely for tax year 2029, a greater percentage of New York residents will see their net income [increase by more than 5%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=72622®ion=ny&timePeriod=2029&baseline=2). Additionally, the reduction in [poverty and child poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=72622®ion=ny&timePeriod=2029&baseline=2) grows significantly as the maximum benefit of the NY WFTC rises. Deep child poverty would [drop by 22.0%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=72622®ion=ny&timePeriod=2029&baseline=2) in 2029 as well. To see the impact of Senate Bill S277C for all years of implementation, see Appendix A (statewide) and Appendix B (New York City). +Once the NY WFTC phases in completely for tax year 2029, a greater percentage of New York residents will see their net income [increase by more than 5%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=72622®ion=ny&timePeriod=2029&baseline=2). Additionally, the reduction in [poverty and child poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=72622®ion=ny&timePeriod=2029&baseline=2) grows significantly as the maximum benefit of the NY WFTC rises. Deep child poverty would [drop by 22.0%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=72622®ion=ny&timePeriod=2029&baseline=2) in 2029 as well. To see the impact of Senate Bill S277C for all years of implementation, see Appendix A (statewide) and Appendix B (New York City). ## Conclusion @@ -118,31 +118,31 @@ Senate Bill S277C and the creation of the NY WFTC would partially consolidate Ne As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Impact of Senate Bill S277C for Tax Years 2025–2029 From 2025 to 2029, the NY WFTC would cost $9.1 billion, with costs, share of individuals benefiting, and poverty impacts rising each year. -| Tax Year | Budget Impact ($ million) | People with Increased Net Income | People with Reduced Net Income | Poverty | Deep Poverty | Child Poverty | Deep Child Poverty | -| :---------------------------------------------------------------------------------------------------------------------------------: | :-----------------------: | :------------------------------: | :----------------------------: | :-----: | :----------: | :-----------: | :----------------: | -| **[2025](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2025&baseline=2)** | 660 | 30.7% | 0.0% | \-1.6% | \-1.1% | \-4.0% | \-4.0% | -| **[2026](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2026&baseline=2)** | 1,231 | 32.7% | 0.1% | \-1.6% | \-3.8% | \-4.6% | \-12.0% | -| **[2027](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2027&baseline=2)** | 1,769 | 33.3% | 0.1% | \-3.0% | \-4.2% | \-8.2% | \-15.2% | -| **[2028](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2028&baseline=2)** | 2,329 | 34.4% | 0.0% | \-4.5% | \-5.0% | \-11.9% | \-18.4% | -| **[2029](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2029&baseline=2)** | 3,068 | 34.4% | 0.0% | \-6.1% | \-5.6% | \-16.8% | \-22.0% | +| Tax Year | Budget Impact ($ million) | People with Increased Net Income | People with Reduced Net Income | Poverty | Deep Poverty | Child Poverty | Deep Child Poverty | +| :----------------------------------------------------------------------------------------------------------------------------------------: | :-----------------------: | :------------------------------: | :----------------------------: | :-----: | :----------: | :-----------: | :----------------: | +| **[2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2025&baseline=2)** | 660 | 30.7% | 0.0% | \-1.6% | \-1.1% | \-4.0% | \-4.0% | +| **[2026](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2026&baseline=2)** | 1,231 | 32.7% | 0.1% | \-1.6% | \-3.8% | \-4.6% | \-12.0% | +| **[2027](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2027&baseline=2)** | 1,769 | 33.3% | 0.1% | \-3.0% | \-4.2% | \-8.2% | \-15.2% | +| **[2028](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2028&baseline=2)** | 2,329 | 34.4% | 0.0% | \-4.5% | \-5.0% | \-11.9% | \-18.4% | +| **[2029](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=ny&timePeriod=2029&baseline=2)** | 3,068 | 34.4% | 0.0% | \-6.1% | \-5.6% | \-16.8% | \-22.0% | ## Appendix B: Impact of Senate Bill S277C for Tax Years 2025–2029 in NYC From 2025 to 2029, the WFTC would provide $3.9 billion in tax benefits to New York City residents, or 43% of the total state costs. New York City residents are disproportionately likely to gain from the reform. While the WFTC reduces poverty relatively less in NYC than outside NYC, it reduces deep poverty relatively more. -| Tax Year | Net Tax Benefits ($ million) | People with Increased Net Income | People with Reduced Net Income | Poverty | Deep Poverty | Child Poverty | Deep Child Poverty | -| ------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------- | -------------------------------- | ------------------------------ | ------- | ------------ | ------------- | ------------------ | -| **[2025](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2025&baseline=2)** | 302 | 31.9% | 0.0% | -0.6% | -1.3% | -1.3% | -4.6% | -| **[2026](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2026&baseline=2)** | 520 | 32.5% | 0.1% | -0.4% | -5.4% | -1.0% | -14.7% | -| **[2027](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2027&baseline=2)** | 753 | 33.8% | 0.1% | -2.4% | -6.2% | -5.6% | -19.5% | -| **[2028](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2028&baseline=2)** | 1,005 | 35.2% | 0.0% | -4.1% | -7.8% | -9.5% | -24.3% | -| **[2029](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2029&baseline=2)** | 1,341 | 35.7% | 0.0% | -5.7% | -8.5% | -13.9% | -28.6% | +| Tax Year | Net Tax Benefits ($ million) | People with Increased Net Income | People with Reduced Net Income | Poverty | Deep Poverty | Child Poverty | Deep Child Poverty | +| ------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | -------------------------------- | ------------------------------ | ------- | ------------ | ------------- | ------------------ | +| **[2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2025&baseline=2)** | 302 | 31.9% | 0.0% | -0.6% | -1.3% | -1.3% | -4.6% | +| **[2026](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2026&baseline=2)** | 520 | 32.5% | 0.1% | -0.4% | -5.4% | -1.0% | -14.7% | +| **[2027](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2027&baseline=2)** | 753 | 33.8% | 0.1% | -2.4% | -6.2% | -5.6% | -19.5% | +| **[2028](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2028&baseline=2)** | 1,005 | 35.2% | 0.0% | -4.1% | -7.8% | -9.5% | -24.3% | +| **[2029](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72622®ion=nyc&timePeriod=2029&baseline=2)** | 1,341 | 35.7% | 0.0% | -5.7% | -8.5% | -13.9% | -28.6% | [^1]: In addition to the discussed exceptions for the NY EITC under Senate Bill S277C, [households with both WFTC qualifying dependents and older dependents](https://www.nysenate.gov/legislation/bills/2023/S277/amendment/C) would continue to receive their full EITC until year five (2029), at which point they would receive the more generous WFTC for dependents who qualify and the EITC only for older dependents who are outside of the WFTC qualifying ages. diff --git a/src/posts/articles/nyc-ctc-s2238.md b/src/posts/articles/nyc-ctc-s2238.md index e1788099f..4bfb2f8f0 100644 --- a/src/posts/articles/nyc-ctc-s2238.md +++ b/src/posts/articles/nyc-ctc-s2238.md @@ -1,6 +1,6 @@ As New York’s legislative session progresses, lawmakers are proposing various changes to the state’s income tax code. [Senate Bill S2238](https://www.nysenate.gov/legislation/bills/2025/S2238), sponsored by State Senator Andrew Gounardes, would establish a New York City Child Tax Credit (NYC CTC) while restructuring the existing School Tax Credit (STC) to raise revenue to offset the cost of the NYC CTC. Using PolicyEngine’s household calculator and microsimulation capabilities, this analysis examines the specific effects of Senate Bill S2238 on individual families as well as its impact on the budget, income distribution, and poverty. -[PolicyEngine projects](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) that in 2025, Senate Bill S2238 would: +[PolicyEngine projects](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) that in 2025, Senate Bill S2238 would: - Generate $93.3 million in state revenue @@ -36,16 +36,16 @@ At the same time, the legislation would introduce a $300 fully refundable Child The impact of Senate Bill S2238 varies based on household composition and income level. To understand this, let’s examine different family examples and how the proposal changes their net income. -_See how a New York City Child Tax Credit would affect your household with our [personalized calculator](https://policyengine.org/us/household?focus=intro&reform=74381®ion=nyc&timePeriod=2025&baseline=2)._ +_See how a New York City Child Tax Credit would affect your household with our [personalized calculator](https://legacy.policyengine.org/us/household?focus=intro&reform=74381®ion=nyc&timePeriod=2025&baseline=2)._ **Table 1: Impact of Senate Bill S2238 on Various Household Compositions** -| Household Composition | Baseline School Tax Credit | New School Tax Credit | NYC CTC | Change in Net Income | -| :-------------------------------- | -------------------------- | --------------------- | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -| **Single, No Children, \$50,000** | \$152 | \$152 | \$0 | [\$0](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50900) | -| **Single, No Children, \$85,000** | \$232 | \$0 | \$0 | [-\$232](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50993) | -| **Single, One Child, \$50,000** | \$152 | \$152 | \$300 | [+\$300](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) | -| **Single, One Child, \$85,000** | \$221 | \$0 | \$0 | [-\$221](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50997) | +| Household Composition | Baseline School Tax Credit | New School Tax Credit | NYC CTC | Change in Net Income | +| :-------------------------------- | -------------------------- | --------------------- | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- | +| **Single, No Children, \$50,000** | \$152 | \$152 | \$0 | [\$0](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50900) | +| **Single, No Children, \$85,000** | \$232 | \$0 | \$0 | [-\$232](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50993) | +| **Single, One Child, \$50,000** | \$152 | \$152 | \$300 | [+\$300](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) | +| **Single, One Child, \$85,000** | \$221 | \$0 | \$0 | [-\$221](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50997) | A single adult with $50,000 in earnings and zero children would continue to receive their current School Tax Credit at $152[^1] as their income is below the phaseout threshold of $75,000. Additionally, because they have no children, they are ineligible for the NYC CTC, leaving their net income unchanged. However, if their earnings increase to $85,000, their STC would phase out completely, reducing their net income by $232 (what they would otherwise receive from the STC if Senate Bill S2238 were not implemented). @@ -63,13 +63,13 @@ In summation, households with no children are unaffected if their earnings are l **Table 2: Breakeven Points by Household Composition** -| Number of Children | Single | Married | -| :----------------: | :-------------------------------------------------------------------------------------------------------------------------------------------------: | :--------------------------------------------------------------------------------------------------------------------------------------------------: | -| **0** | [\$75,000](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50956) | [\$150,000](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51087) | -| **1** | [\$78,000](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51088) | [\$153,000](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51089) | -| **2** | [\$82,700](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51090) | [\$156,000](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51091) | -| **3** | [\$88,500](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51094) | [\$159,300](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51095) | -| **4** | [\$94,300](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51096) | [\$165,100](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51097) | +| Number of Children | Single | Married | +| :----------------: | :--------------------------------------------------------------------------------------------------------------------------------------------------------: | :---------------------------------------------------------------------------------------------------------------------------------------------------------: | +| **0** | [\$75,000](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50956) | [\$150,000](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51087) | +| **1** | [\$78,000](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51088) | [\$153,000](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51089) | +| **2** | [\$82,700](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51090) | [\$156,000](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51091) | +| **3** | [\$88,500](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51094) | [\$159,300](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51095) | +| **4** | [\$94,300](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51096) | [\$165,100](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51097) | _Rounded to the nearest $100._ @@ -77,29 +77,29 @@ Using PolicyEngine’s microsimulation capabilities through 3 years of pooled da ## Citywide Impacts -Phasing out the School Tax Credit would raise [$427.1 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=74345®ion=nyc&timePeriod=2025&baseline=2) in 2025, while implementing the CTC component of Senate Bill S2238 would cost [$333.8 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=75446®ion=nyc&timePeriod=2025&baseline=2), generating a [surplus of $93.3 million](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) in state funds. +Phasing out the School Tax Credit would raise [$427.1 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=74345®ion=nyc&timePeriod=2025&baseline=2) in 2025, while implementing the CTC component of Senate Bill S2238 would cost [$333.8 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=75446®ion=nyc&timePeriod=2025&baseline=2), generating a [surplus of $93.3 million](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) in state funds. -As displayed in Figure 5, the proposed legislation provides net benefits to the [bottom six income deciles](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) on average, while the seventh decile is essentially unchanged. Conversely, households in the top income decile would see an average reduction of $551. +As displayed in Figure 5, the proposed legislation provides net benefits to the [bottom six income deciles](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) on average, while the seventh decile is essentially unchanged. Conversely, households in the top income decile would see an average reduction of $551. -Furthermore, while the average dollar amount gained in each decile in the bottom half of the distribution would vary, households in these deciles would see their net income increase [between 0.2% and 0.3%](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50900) on average. +Furthermore, while the average dollar amount gained in each decile in the bottom half of the distribution would vary, households in these deciles would see their net income increase [between 0.2% and 0.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50900) on average. **Figure 5: Average Benefit of Senate Bill S2238 by Income Decile[^3]** ![](https://cdn-images-1.medium.com/max/2000/1*H404oqvkm7Am75Cjq_ugAQ.png) -Fourteen percent of residents in the [first income decile](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) would gain more than 5% of their net income with the proposed legislation. This is a larger portion of residents receiving over a 5% net gain in any other decile (see the dark blue portion of the bars in Figure 6). Seventy-two percent of NYC residents in the top decile would see a loss that is less than 5% of their net income. +Fourteen percent of residents in the [first income decile](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) would gain more than 5% of their net income with the proposed legislation. This is a larger portion of residents receiving over a 5% net gain in any other decile (see the dark blue portion of the bars in Figure 6). Seventy-two percent of NYC residents in the top decile would see a loss that is less than 5% of their net income. **Figure 6: Winners and Losers of Senate Bill S2238** ![](https://cdn-images-1.medium.com/max/2000/1*USRzlHzR5BOrM0310ZIgyg.png) -Senate Bill S2238 would lower the city’s Supplemental Poverty Measure [by 0.8%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) and child poverty by 2.0%. PolicyEngine projects the legislation would have no impact on deep poverty. +Senate Bill S2238 would lower the city’s Supplemental Poverty Measure [by 0.8%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=50953) and child poverty by 2.0%. PolicyEngine projects the legislation would have no impact on deep poverty. **Figure 7: Poverty Impact of Senate Bill S2238** ![](https://cdn-images-1.medium.com/max/2000/1*KHmC00tZhNNzIwEqWckwmw.png) -Finally, the city’s Gini index of income inequality would [drop by 0.3%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51083).[^4] +Finally, the city’s Gini index of income inequality would [drop by 0.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=74381®ion=nyc&timePeriod=2025&baseline=2&household=51083).[^4] ## Conclusion @@ -107,7 +107,7 @@ Senate Bill S2238 would limit the School Tax Credit by phasing out benefits at 5 As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. [^1]: The childless adult would receive the STC’s fixed amount of $63, plus the rate reduction portion. With $50,000 in annual earnings, their taxable income is $42,000 as they receive New York’s $8,000 standard deduction. 0.171% of the first $12,000 is $20.52. 0.228% of the remaining $30,000 is $68.40. Combined the rate reduction amount is around $89. $63 plus $89 is $152, the adult’s total STC. diff --git a/src/posts/articles/obr-forecast-2025.ipynb b/src/posts/articles/obr-forecast-2025.ipynb index 08c61cb5c..0ff9aca84 100644 --- a/src/posts/articles/obr-forecast-2025.ipynb +++ b/src/posts/articles/obr-forecast-2025.ipynb @@ -35,7 +35,7 @@ { "data": { "text/markdown": [ - "[See the forecast change in PolicyEngine](https://policyengine.org/uk/policy?reform=80230&baseline=80227®ion=uk&timePeriod=2029)" + "[See the forecast change in PolicyEngine](https://legacy.policyengine.org/uk/policy?reform=80230&baseline=80227®ion=uk&timePeriod=2029)" ], "text/plain": [ "" @@ -127,7 +127,7 @@ "baseline = Reform.from_dict(AUTUMN_24_OBR_FORECAST, country_id=\"uk\")\n", "reform = Reform.from_dict(SPRING_25_OBR_FORECAST, country_id=\"uk\")\n", "\n", - "link = f\"https://policyengine.org/uk/policy?reform={reform.api_id}&baseline={baseline.api_id}®ion=uk&timePeriod=2029\"\n", + "link = f\"https://legacy.policyengine.org/uk/policy?reform={reform.api_id}&baseline={baseline.api_id}®ion=uk&timePeriod=2029\"\n", "\n", "Markdown(f\"[See the forecast change in PolicyEngine]({link})\")" ] diff --git a/src/posts/articles/obr-forecast-update-spring-24.ipynb b/src/posts/articles/obr-forecast-update-spring-24.ipynb index 0c1e76998..74f1c159c 100644 --- a/src/posts/articles/obr-forecast-update-spring-24.ipynb +++ b/src/posts/articles/obr-forecast-update-spring-24.ipynb @@ -2680,7 +2680,7 @@ "\n", "PolicyEngine replicates official forecasts closely, largely due to both calibrating some outputs directly to be consistent (making many of these comparisons - all but VAT and fuel duty - _ex post_), and replicating the use of the OBR's economic determinant forecasts. The next sections evaluate PolicyEngine's model forecasts against OBR forecasts for key programs. We also compare against UKMOD, developed at the University of Essex, using their latest (March 2024) [country report](https://www.iser.essex.ac.uk/research/publications/working-papers/cempa/cempa4-24) as reference.\n", "\n", - "PolicyEngine’s calibration routine (specified in more detail in our [working paper](https://policyengine.org/uk_data_enhancement.pdf)) calibrates the underlying household survey data weights to reduce inconsistency between the Family Resources Survey and other, more accurate government statistics on taxes and benefits. We use optimisation techniques [like the DWP does](https://assets.publishing.service.gov.uk/media/5a7dddcc40f0b65d88634e32/initial-review-family-resources-survey-weighting-scheme.pdf) in generating the initial FRS household weights, but we include statistics on tax revenues and benefit expenditures as well as demographics instead of excluding them. We also include imputations from other surveys on income and expenditure as part of this process. For a comparison to UKMOD’s approach, see Appendix B.\n", + "PolicyEngine’s calibration routine (specified in more detail in our [working paper](https://legacy.policyengine.org/uk_data_enhancement.pdf)) calibrates the underlying household survey data weights to reduce inconsistency between the Family Resources Survey and other, more accurate government statistics on taxes and benefits. We use optimisation techniques [like the DWP does](https://assets.publishing.service.gov.uk/media/5a7dddcc40f0b65d88634e32/initial-review-family-resources-survey-weighting-scheme.pdf) in generating the initial FRS household weights, but we include statistics on tax revenues and benefit expenditures as well as demographics instead of excluding them. We also include imputations from other surveys on income and expenditure as part of this process. For a comparison to UKMOD’s approach, see Appendix B.\n", "\n", "### Income Tax\n", "\n", diff --git a/src/posts/articles/openfisca-wins-edge-of-government-innovation-award.md b/src/posts/articles/openfisca-wins-edge-of-government-innovation-award.md index a88c7f1fb..580f96376 100644 --- a/src/posts/articles/openfisca-wins-edge-of-government-innovation-award.md +++ b/src/posts/articles/openfisca-wins-edge-of-government-innovation-award.md @@ -9,7 +9,7 @@ OpenFisca’s innovative approach to Rules as Code was showcased at the summit, ![*OpenFisca’s description at the [Edge of Government](https://edge.worldgovernmentsummit.org/).*](https://cdn-images-1.medium.com/max/3200/0*EcM_Z_fKd8QIz7-F) _OpenFisca’s description at the [Edge of Government](https://edge.worldgovernmentsummit.org/)._ -At PolicyEngine, we have had the privilege of working closely with the OpenFisca team, and we are proud to have contributed to the growth of this incredible framework. Our journey with OpenFisca began in 2020 when we started building a microsimulation model of the UK tax and benefit system. We were impressed by OpenFisca’s modernness, flexibility, and excellent documentation. Over time, as we built more complex systems and required additional features, we [forked OpenFisca into our own microsimulation framework called PolicyEngine](https://policyengine.org/us/blog/2022-11-10-from-openfisca-to-policyengine). We are grateful to the OpenFisca team for their collaboration and support throughout this process. +At PolicyEngine, we have had the privilege of working closely with the OpenFisca team, and we are proud to have contributed to the growth of this incredible framework. Our journey with OpenFisca began in 2020 when we started building a microsimulation model of the UK tax and benefit system. We were impressed by OpenFisca’s modernness, flexibility, and excellent documentation. Over time, as we built more complex systems and required additional features, we [forked OpenFisca into our own microsimulation framework called PolicyEngine](https://legacy.policyengine.org/us/blog/2022-11-10-from-openfisca-to-policyengine). We are grateful to the OpenFisca team for their collaboration and support throughout this process. ![*PolicyEngine in the [OpenFisca showcase](https://openfisca.org/en/showcase/).*](https://cdn-images-1.medium.com/max/3200/0*HAMMqkNEVc9IQ7uu)_PolicyEngine in the [OpenFisca showcase](https://openfisca.org/en/showcase/)._ diff --git a/src/posts/articles/oregon-rebate.md b/src/posts/articles/oregon-rebate.md index 4c6502eee..e46049d5e 100644 --- a/src/posts/articles/oregon-rebate.md +++ b/src/posts/articles/oregon-rebate.md @@ -55,12 +55,12 @@ PolicyEngine does not currently consider macroeconomic effects such as these in You can view these impacts in the PolicyEngine app, which also calculates outcomes like inequality, at the links in this table: -| Federally taxable | Flat tax funded | 2025 | 2026 | 2027 | -| ----------------- | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | -| No | No | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2025&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2026&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2027&baseline=2) | -| No | Yes | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2025&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2026&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2027&baseline=2) | -| Yes | No | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2025&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2026&baseline=2) | [Link](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2027&baseline=2) | -| Yes | Yes | [Link](https://policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2025&baseline=2) | [Link](https://policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2026&baseline=2) | [Link](https://policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2027&baseline=2) | +| Federally taxable | Flat tax funded | 2025 | 2026 | 2027 | +| ----------------- | --------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | +| No | No | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2025&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2026&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64228®ion=or&timePeriod=2027&baseline=2) | +| No | Yes | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2025&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2026&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=66621®ion=or&timePeriod=2027&baseline=2) | +| Yes | No | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2025&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2026&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=64682®ion=or&timePeriod=2027&baseline=2) | +| Yes | Yes | [Link](https://legacy.policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2025&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2026&baseline=2) | [Link](https://legacy.policyengine.org/us/policy?focus=gov.contrib.ubi_center.flat_tax.rate.agi&reform=66617®ion=or&timePeriod=2027&baseline=2) | # Methodology @@ -70,6 +70,6 @@ PolicyEngine then "ages" various characteristics of the microdata based on proje Finally, we estimate taxes and benefits based on the PolicyEngine model of federal and state tax and benefit rules. This model includes federal and state income taxes, including future-dated changes such as the expiration of the Tax Cuts and Jobs Act in 2026, as well as benefit programs like the Supplemental Nutrition Assistance Program and Supplemental Security Income. Here we apply state-specific rules and index policy parameters based on projected index changes (generally inflation). We also model the take-up rate of benefits like SNAP and SSI. -While the Census Bureau relies on the CPS for poverty reporting, and various organizations use it for poverty analysis, the CPS has limitations that affect this analysis. For example, high incomes are "top-coded" (truncated), benefits and some income sources are under-reported, and the distribution of income diverges from administrative sources. PolicyEngine [addresses these shortcomings](https://policyengine.org/us/research/enhanced-cps-beta) in national analyses by integrating tax records and calibrating to hundreds of statistics, but has not yet done so for state-level estimates. Correcting the data may change the baseline poverty rates and other distributional measures that may affect the projected impact of the Oregon Rebate on poverty. +While the Census Bureau relies on the CPS for poverty reporting, and various organizations use it for poverty analysis, the CPS has limitations that affect this analysis. For example, high incomes are "top-coded" (truncated), benefits and some income sources are under-reported, and the distribution of income diverges from administrative sources. PolicyEngine [addresses these shortcomings](https://legacy.policyengine.org/us/research/enhanced-cps-beta) in national analyses by integrating tax records and calibrating to hundreds of statistics, but has not yet done so for state-level estimates. Correcting the data may change the baseline poverty rates and other distributional measures that may affect the projected impact of the Oregon Rebate on poverty. _The Oregon Rebate campaign previously cited earlier estimates from the PolicyEngine web app. We have since updated our model, incorporating new Census data released in September 2024, adding two more years of data, imputing rent and property tax data from the American Community Survey for the SNAP excess shelter deduction, and assigning SNAP take-up rates._ diff --git a/src/posts/articles/oregons-nonrefundable-exemption-credit.md b/src/posts/articles/oregons-nonrefundable-exemption-credit.md index c27a77ace..73c258128 100644 --- a/src/posts/articles/oregons-nonrefundable-exemption-credit.md +++ b/src/posts/articles/oregons-nonrefundable-exemption-credit.md @@ -38,10 +38,10 @@ Select “Calculate economic impact” and choose which metric you would like to ![](https://cdn-images-1.medium.com/max/3200/0*jNzuIY1ZmfdlBan5) -We estimate that Oregon’s exemption credit [cost $645.5 million in 2022](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=or&timePeriod=2023&baseline=3349), [reduced poverty 0%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=or&timePeriod=2023&baseline=3349), and [increased the average household’s net income by $365](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=or&timePeriod=2023&baseline=3349). As a comparison, Oregon estimates that the credit cost about $650 million in 2021.[^1] +We estimate that Oregon’s exemption credit [cost $645.5 million in 2022](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=or&timePeriod=2023&baseline=3349), [reduced poverty 0%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=or&timePeriod=2023&baseline=3349), and [increased the average household’s net income by $365](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=or&timePeriod=2023&baseline=3349). As a comparison, Oregon estimates that the credit cost about $650 million in 2021.[^1] ![](https://cdn-images-1.medium.com/max/2000/0*FnGciLTwIOECw92y.jpg) -**To compute other elements of Oregon’s income tax, visit [policyengine.org](http://policyengine.org).** +**To compute other elements of Oregon’s income tax, visit [policyengine.org](http://legacy.policyengine.org).** [^1]: In the 2021–2023 period, [Oregon’s biennial tax expenditure report](https://www.oregon.gov/dor/programs/gov-research/Documents/TE2123-Final.pdf#page=200) shows a revenue impact of $4.6 million for the child with disability credit (p.144), $4.5 million for the severe disability credit (p.149), and $1,308,900,000 for the personal exemption credit (p.200). $1.318 billion divided by 2 (tax years 2021 and 2022) is $659 million. diff --git a/src/posts/articles/pip-and-freeze.md b/src/posts/articles/pip-and-freeze.md index 2213f94b5..3f7db6b5f 100644 --- a/src/posts/articles/pip-and-freeze.md +++ b/src/posts/articles/pip-and-freeze.md @@ -6,11 +6,11 @@ To be eligible for PIP, claimants must be between the ages of 16 and state pensi # How PIP affects the UK -In 2025 and assuming our [standard behavioural responses](https://policyengine.org/uk/research/behavioural-responses), we [estimate](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=78633&timePeriod=2025®ion=uk) that the government will spend £30 billion on PIP payments, affecting the household incomes of 10.3% of people. These payments increase the incomes of the bottom half of the income distribution by more than 1%, and increase the income of the lowest income decile by 17%. +In 2025 and assuming our [standard behavioural responses](https://legacy.policyengine.org/uk/research/behavioural-responses), we [estimate](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=78633&timePeriod=2025®ion=uk) that the government will spend £30 billion on PIP payments, affecting the household incomes of 10.3% of people. These payments increase the incomes of the bottom half of the income distribution by more than 1%, and increase the income of the lowest income decile by 17%. ![Impact by decile](/images/posts/pip-and-freeze/image_1.png) -We estimate that PIP [lowers](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=1&baseline=78633&timePeriod=2025®ion=uk) the absolute, before housing costs (BHC) poverty rate by 1.3pp (884,000 people), and the deep absolute BHC poverty rate by 0.5pp (340,000 people). +We estimate that PIP [lowers](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=1&baseline=78633&timePeriod=2025®ion=uk) the absolute, before housing costs (BHC) poverty rate by 1.3pp (884,000 people), and the deep absolute BHC poverty rate by 0.5pp (340,000 people). ![Poverty impact](/images/posts/pip-and-freeze/image_2.png) @@ -18,13 +18,13 @@ We estimate that PIP increases (by over 5%) the net income for 10% of the popula ![Outcomes by decile](/images/posts/pip-and-freeze/image_3.png) -By applying [our standard behavioural assumptions](https://policyengine.org/uk/research/behavioural-responses), we estimate that PIP reduces earnings by £288 million in 2025, 0.02% of total UK earnings, equivalent to around 7,800 full time jobs at the UK average wage.[^1] By comparing this to [no behavioural assumptions](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=78632&timePeriod=2025®ion=uk), we find that this translates to a £102 million reduction in tax revenues and a £25 million increase in other benefit spending; that is, behaviour increases the cost by 0.4%. +By applying [our standard behavioural assumptions](https://legacy.policyengine.org/uk/research/behavioural-responses), we estimate that PIP reduces earnings by £288 million in 2025, 0.02% of total UK earnings, equivalent to around 7,800 full time jobs at the UK average wage.[^1] By comparing this to [no behavioural assumptions](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1&baseline=78632&timePeriod=2025®ion=uk), we find that this translates to a £102 million reduction in tax revenues and a £25 million increase in other benefit spending; that is, behaviour increases the cost by 0.4%. We also find that PIP reduces income inequality (as measured by the Gini coefficient of net household income) by 2.8%. # Freezing PIP rates in 2025 -By keeping PIP levels the same in FY 2025/26, PolicyEngine [estimates](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=78417&baseline=1&timePeriod=2025®ion=uk) that the government would raise £464 million over that time period. These impacts would affect the household incomes of 9.7% of people and reduce the incomes of the bottom half of the income distribution by between 0.05% and 0.1%. +By keeping PIP levels the same in FY 2025/26, PolicyEngine [estimates](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=78417&baseline=1&timePeriod=2025®ion=uk) that the government would raise £464 million over that time period. These impacts would affect the household incomes of 9.7% of people and reduce the incomes of the bottom half of the income distribution by between 0.05% and 0.1%. ![Impact by decile](/images/posts/pip-and-freeze/image_4.png) diff --git a/src/posts/articles/policyengine-2022-year-in-review.md b/src/posts/articles/policyengine-2022-year-in-review.md index ed5f90e0d..462202e33 100644 --- a/src/posts/articles/policyengine-2022-year-in-review.md +++ b/src/posts/articles/policyengine-2022-year-in-review.md @@ -6,7 +6,7 @@ This year, we launched in the US, improved our data and modeling architecture, a In March, we had our biggest launch to date: [PolicyEngine US](https://blog.policyengine.org/policyengine-comes-stateside-cef88b122e48). We initially showed how current policy and custom reforms affect individual households, then [added population impacts in July](https://blog.policyengine.org/the-new-policyengine-us-population-impact-page-de68cb4ba71a) using the Current Population Survey. -![[PolicyEngine US model of the End Child Poverty Act, a bill from Representatives Mondaire Jones and Rashida Tlaib](https://policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720)](https://cdn-images-1.medium.com/max/3200/0*nscDM9ElP6y9udM1)_[PolicyEngine US model of the End Child Poverty Act, a bill from Representatives Mondaire Jones and Rashida Tlaib](https://policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720)_ +![[PolicyEngine US model of the End Child Poverty Act, a bill from Representatives Mondaire Jones and Rashida Tlaib](https://legacy.policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720)](https://cdn-images-1.medium.com/max/3200/0*nscDM9ElP6y9udM1)_[PolicyEngine US model of the End Child Poverty Act, a bill from Representatives Mondaire Jones and Rashida Tlaib](https://legacy.policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&young_child_bi_amount=4720)_ But the US is not just one launch: each state has their own benefit program rules, and most have their own income tax as well. We added state income tax models in Maryland, Massachusetts, Oregon, New York, Pennsylvania, and Washington. In addition to video-filled launch posts for [New York](https://blog.policyengine.org/policyengine-launches-in-new-york-state-c96c4647d7f0) and [Washington](https://blog.policyengine.org/policyengine-launches-in-washington-state-863487751f9a), we dove into programs like [Oregon’s Earned Income Tax Credit](https://blog.policyengine.org/computing-your-oregon-earned-income-tax-credit-in-policyengine-d911ae29749d) and [Exemption Credit](https://blog.policyengine.org/oregons-nonrefundable-exemption-credit-b5ea8137fd0), [Maryland’s Standard Deduction](https://blog.policyengine.org/marylands-standard-deduction-a3a147823ee8), and [Supplemental Security Income](https://blog.policyengine.org/estimating-your-supplemental-security-income-benefits-in-policyengine-74c6396ee402). diff --git a/src/posts/articles/policyengine-at-the-basic-income-guarantee-conference-and-the-beeck-centers-rules-as-code-demo-day.md b/src/posts/articles/policyengine-at-the-basic-income-guarantee-conference-and-the-beeck-centers-rules-as-code-demo-day.md index 11a438d69..7280f19e4 100644 --- a/src/posts/articles/policyengine-at-the-basic-income-guarantee-conference-and-the-beeck-centers-rules-as-code-demo-day.md +++ b/src/posts/articles/policyengine-at-the-basic-income-guarantee-conference-and-the-beeck-centers-rules-as-code-demo-day.md @@ -17,7 +17,7 @@ June 28: [Beeck Center Rules as Code Demo Day](https://www.eventbrite.com/e/rule We’ll present PolicyEngine-based research in the following BIG Conference sessions: Exploring and evaluating basic income policies with the PolicyEngine app for US tax and benefit analysis -Max Ghenis and Nikhil Woodruff will run a workshop for participants to design customizable UBI policies and compute their impact, using the [PolicyEngine US app](http://policyengine.org/us). +Max Ghenis and Nikhil Woodruff will run a workshop for participants to design customizable UBI policies and compute their impact, using the [PolicyEngine US app](http://legacy.policyengine.org/us). \*June 23, 11:00AM PT, in Portland, Oregon The distributional impacts of universal basic income policies diff --git a/src/posts/articles/policyengine-comes-stateside.md b/src/posts/articles/policyengine-comes-stateside.md index 949d69580..e36ece019 100644 --- a/src/posts/articles/policyengine-comes-stateside.md +++ b/src/posts/articles/policyengine-comes-stateside.md @@ -1,8 +1,8 @@ Last October, we [launched PolicyEngine UK](https://blog.policyengine.org/make-everyone-a-policymaker-dc7b00bdb143), bringing free, open-source, web-based tax and benefit analysis to the UK for the first time. Since then, users have asked us one question more than any other: “When is it coming to the US?” This isn’t too surprising; after all, half our founding team (me) is American. -Well, fellow Yanks, the wait is over. Today, we’re beta-launching PolicyEngine US! To try it, visit [\*\*policyengine.org/us](http://policyengine.org/us)** or check out the big American flag at [**policyengine.org](https://policyengine.org/)**. Did I mention we’re also launching a [**policyengine.org](https://policyengine.org)\*\* homepage today? +Well, fellow Yanks, the wait is over. Today, we’re beta-launching PolicyEngine US! To try it, visit [\*\*policyengine.org/us](http://legacy.policyengine.org/us)** or check out the big American flag at [**policyengine.org](https://legacy.policyengine.org/)**. Did I mention we’re also launching a [**policyengine.org](https://legacy.policyengine.org)\*\* homepage today? -![[PolicyEngine homepage](http://policyengine.org)](https://cdn-images-1.medium.com/max/7636/1*VWLFVXNrF1Gss2euuXE7tA.png)_[PolicyEngine homepage](http://policyengine.org)_ +![[PolicyEngine homepage](http://legacy.policyengine.org)](https://cdn-images-1.medium.com/max/7636/1*VWLFVXNrF1Gss2euuXE7tA.png)_[PolicyEngine homepage](http://legacy.policyengine.org)_ If you’ve used PolicyEngine UK, the US interface will look familiar, though without the society-wide impact page and with a different default screen. If you’re new to PolicyEngine, you can now see how to use it by clicking the question mark in the bottom left, which shows a brief demo. @@ -10,9 +10,9 @@ If you’ve used PolicyEngine UK, the US interface will look familiar, though wi In fact, here are all the things we’re launching: -- [PolicyEngine US beta](https://policyengine.org/us) +- [PolicyEngine US beta](https://legacy.policyengine.org/us) -- [PolicyEngine homepage](https://policyengine.org) +- [PolicyEngine homepage](https://legacy.policyengine.org) - Demo walkthrough @@ -50,6 +50,6 @@ Most of all, we’re excited by the precedent PolicyEngine US sets. Even before We have a long way to go to bring all our UK features to the US. The US tax and benefit system is, in many ways, 52 systems: one for each of the 50 states, DC, and the US overall. Some programs, like Housing Choice Vouchers and Child Care Development Fund subsidies, even vary by county. To stay updated on our progress, [sign up for our mailing list](https://mailchi.mp/7b89fef927ca/general) or follow our [social](http://twitter.com/thepolicyengine) [media](http://facebook.com/thepolicyengine) [accounts](https://linkedin.com/company/thepolicyengine). You can help us make the rest happen with a [tax-deductible gift](https://opencollective.com/psl), or by [contributing to our code base](http://github.com/policyengine). If you’re a developer or researcher, you can also use our microsimulation model programmatically via our [OpenFisca US Python package](http://openfisca.us). -To compute the impact of US tax and benefit policy on your own household, give PolicyEngine US a try at [**policyengine.org/us**](https://policyengine.org/us). You can also learn more about the product on Monday at 11:30AM ET at the [Policy Simulation Library Demo Day](http://pslmodels.org/events.html). As always, feel free to [reach out](http://contact@policyengine.org) with any questions or feedback. +To compute the impact of US tax and benefit policy on your own household, give PolicyEngine US a try at [**policyengine.org/us**](https://legacy.policyengine.org/us). You can also learn more about the product on Monday at 11:30AM ET at the [Policy Simulation Library Demo Day](http://pslmodels.org/events.html). As always, feel free to [reach out](http://contact@policyengine.org) with any questions or feedback. _We’re grateful to other tax and benefit models, from the Policy Simulation Library’s open-source [Tax-Calculator](http://taxcalc.pslmodels.org) to [snapscreener.com](https://www.snapscreener.com/) to the Atlanta Fed’s [Policy Rules Database](https://www.atlantafed.org/economic-mobility-and-resilience/advancing-careers-for-low-income-families/policy-rules-database), and to our [open-source](https://github.com/PolicyEngine/openfisca-us/graphs/contributors) [contributors](https://github.com/PolicyEngine/policyengine/graphs/contributors)_,_ for aiding in this launch._ diff --git a/src/posts/articles/policyengine-launches-in-new-york-state.md b/src/posts/articles/policyengine-launches-in-new-york-state.md index 153a04f10..0a801bc6a 100644 --- a/src/posts/articles/policyengine-launches-in-new-york-state.md +++ b/src/posts/articles/policyengine-launches-in-new-york-state.md @@ -1,6 +1,6 @@ New York state taxes individual income at rates ranging from 4% to 10.9%. But it also has a slew of income adjustments, supplementary rates, deductions, exemptions, and credits. Short of using tax software in April or hiring a tax accountant, how can you estimate your tax bill? -[**New Yorkers can now use the free PolicyEngine app to find out.**](http://policyengine.org)[^1] We capture all those rules, and show your estimated state taxes (including tax credits) in the same view as your federal taxes and benefit programs like the Supplemental Nutrition Assistance Program. +[**New Yorkers can now use the free PolicyEngine app to find out.**](http://legacy.policyengine.org)[^1] We capture all those rules, and show your estimated state taxes (including tax credits) in the same view as your federal taxes and benefit programs like the Supplemental Nutrition Assistance Program. ![](https://cdn-images-1.medium.com/max/3200/0*sqsx67qxDSL6WpYE) diff --git a/src/posts/articles/policyengine-launches-in-washington-state.md b/src/posts/articles/policyengine-launches-in-washington-state.md index 10d61a29c..51b45ba04 100644 --- a/src/posts/articles/policyengine-launches-in-washington-state.md +++ b/src/posts/articles/policyengine-launches-in-washington-state.md @@ -1,18 +1,18 @@ Washington state hasn’t historically had an income tax. However, in the past year, they’ve enacted a [Working Families Tax Credit](https://workingfamiliescredit.wa.gov/) (modeled after the federal Earned Income Tax Credit) and a [capital gains tax](https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax)¹ (which is currently held up in court). With support from the [Center for Growth and Opportunity](http://thecgo.org), we’ve now modeled these policies in PolicyEngine and enabled Washington-specific impacts of federal reforms. This blog post shows a series of examples on using PolicyEngine in Washington. -You can use our [household calculator](http://policyengine.org/us/household) to estimate how much you’ll get from the Washington Working Families Tax Credit under current law.² +You can use our [household calculator](http://legacy.policyengine.org/us/household) to estimate how much you’ll get from the Washington Working Families Tax Credit under current law.²
-Using PolicyEngine’s Baseline feature, you can also compute the impact of the Working Families Tax Credit by [comparing it against a baseline where it doesn’t exist](https://policyengine.org/us/population-impact?wa_wftc_max_amount_1_rate=300&wa_wftc_max_amount_2_rate=600&wa_wftc_max_amount_3_rate=900&wa_wftc_max_amount_4_rate=1200&wa_wftc_min_amount=50&baseline_wa_wftc_max_amount_1_rate=0&baseline_wa_wftc_max_amount_2_rate=0&baseline_wa_wftc_max_amount_3_rate=0&baseline_wa_wftc_max_amount_4_rate=0&baseline_wa_wftc_min_amount=0&baseline_state_specific=WA).³ +Using PolicyEngine’s Baseline feature, you can also compute the impact of the Working Families Tax Credit by [comparing it against a baseline where it doesn’t exist](https://legacy.policyengine.org/us/population-impact?wa_wftc_max_amount_1_rate=300&wa_wftc_max_amount_2_rate=600&wa_wftc_max_amount_3_rate=900&wa_wftc_max_amount_4_rate=1200&wa_wftc_min_amount=50&baseline_wa_wftc_max_amount_1_rate=0&baseline_wa_wftc_max_amount_2_rate=0&baseline_wa_wftc_max_amount_3_rate=0&baseline_wa_wftc_max_amount_4_rate=0&baseline_wa_wftc_min_amount=0&baseline_state_specific=WA).³
-PolicyEngine lets you imagine a range of policy reforms. For example, what if the Working Families Tax Credit were $100 more generous? This video shows how to build [that policy](https://policyengine.org/us/population-impact?wa_wftc_max_amount_0_rate=400&wa_wftc_max_amount_1_rate=700&wa_wftc_max_amount_2_rate=1000&wa_wftc_max_amount_3_rate=1300&baseline_state_specific=WA) and compute its impact on Washington overall and a Washington family of four. +PolicyEngine lets you imagine a range of policy reforms. For example, what if the Working Families Tax Credit were $100 more generous? This video shows how to build [that policy](https://legacy.policyengine.org/us/population-impact?wa_wftc_max_amount_0_rate=400&wa_wftc_max_amount_1_rate=700&wa_wftc_max_amount_2_rate=1000&wa_wftc_max_amount_3_rate=1300&baseline_state_specific=WA) and compute its impact on Washington overall and a Washington family of four.
-Finally, you can also compute the impact of federal policy reforms on Washington state; for instance, [cutting the bottom tax rate from 10% to 5%](https://policyengine.org/us/population-impact?gov_irs_income_bracket_rates_1=5&baseline_state_specific=WA). +Finally, you can also compute the impact of federal policy reforms on Washington state; for instance, [cutting the bottom tax rate from 10% to 5%](https://legacy.policyengine.org/us/population-impact?gov_irs_income_bracket_rates_1=5&baseline_state_specific=WA).
diff --git a/src/posts/articles/policyengine-nber-mou-taxsim.md b/src/posts/articles/policyengine-nber-mou-taxsim.md index 86a5a7bcc..9ade35104 100644 --- a/src/posts/articles/policyengine-nber-mou-taxsim.md +++ b/src/posts/articles/policyengine-nber-mou-taxsim.md @@ -8,7 +8,7 @@ TAXSIM35, the current version, accepts 35 input variables covering demographics, ## Our collaboration with NBER -We're working directly with Daniel Feenberg and James Poterba, President and CEO of NBER, to build the next generation of tax microsimulation tools. This MOU formalizes the validation work we've been doing against TAXSIM for over three years while building state tax models across the country. Dr. Feenberg also serves as an external mentor through our [NSF POSE Phase I grant](https://policyengine.org/us/research/nsf-pose-phase-1-grant), helping us build a robust open-source ecosystem for policy analysis. +We're working directly with Daniel Feenberg and James Poterba, President and CEO of NBER, to build the next generation of tax microsimulation tools. This MOU formalizes the validation work we've been doing against TAXSIM for over three years while building state tax models across the country. Dr. Feenberg also serves as an external mentor through our [NSF POSE Phase I grant](https://legacy.policyengine.org/us/research/nsf-pose-phase-1-grant), helping us build a robust open-source ecosystem for policy analysis. Our partnership ensures that: diff --git a/src/posts/articles/policyengines-2021-year-in-review.md b/src/posts/articles/policyengines-2021-year-in-review.md index 74411962d..080e28ade 100644 --- a/src/posts/articles/policyengines-2021-year-in-review.md +++ b/src/posts/articles/policyengines-2021-year-in-review.md @@ -2,7 +2,7 @@ PolicyEngine’s inaugural year was a substantial one for public policy: with va In the past two months, we’ve learned tremendously from our users: what policies they value, how they want to interact with the tool, and more. As a result, we’ve improved PolicyEngine UK in a number of ways, from modelling Scottish rates, Stamp Duty Land Tax (and its devolved equivalents), and business rates, to adding new policies like carbon taxes and land value taxes, to allowing users to select a policy snapshot date. We’ve also simplified the interface and [validated the results](https://policyengine.github.io/openfisca-uk//model/validation.html) with a range of automated tests; we’re confident that PolicyEngine is not only the most user-friendly product in its class, but also the most accurate. -![[PolicyEngine UK’s](http://policyengine.org) current interface](https://cdn-images-1.medium.com/max/3200/0*01APO70x-26mV3Wq)_[PolicyEngine UK’s](http://policyengine.org) current interface_ +![[PolicyEngine UK’s](http://legacy.policyengine.org) current interface](https://cdn-images-1.medium.com/max/3200/0*01APO70x-26mV3Wq)_[PolicyEngine UK’s](http://legacy.policyengine.org) current interface_ The public policy community has already leveraged PolicyEngine to analyse reforms. The UBI Lab Network embedded PolicyEngine in their [Resilience UBI proposal](https://www.ubilabnetwork.org/resilience-ubi), and the UBI Center (which originally incubated PolicyEngine) integrated PolicyEngine to [its report on the proposal](https://www.ubicenter.org/resilience-ubi). As the national conversation turned to new ideas for policy change, PolicyEngine’s quick interactivity shone: we analysed the [Autumn Budget changes to Universal Credit](https://blog.policyengine.org/analysing-autumn-budget-universal-credit-reforms-with-policyengine-2ce93f177428) and, within a day, produced the only poverty estimates of [Income Tax changes reportedly discussed within the Treasury](https://blog.policyengine.org/income-tax-cuts-rishi-sunak-is-reportedly-considering-9d75eb529262). When we [presented PolicyEngine](https://docs.google.com/presentation/d/1br3vPxhYz4ytPjHVjswhdllmyF8fcp7EWixNLHJxP-U/preview?slide=id.g6293382480_0_338) at the Cross-Party Parliamentary and Local Government Group on Universal Basic Income, policymakers experimented with policies in real time. We’ve also had the chance to share our [100% open source technology](http://github.com/PolicyEngine) at the [PyData Conference](https://docs.google.com/presentation/d/1t1VBAwxmbNC_traV5DPqswvwO0wywIMjtbWP6rNr9zU/edit#slide=id.g6293382480_0_338) and the [Policy Simulation Library](http://blog.pslmodels.org/demo-day-22-synthimpute), ensuring we continue to learn from other experts in the field. diff --git a/src/posts/articles/poverty-race-ethnicity.md b/src/posts/articles/poverty-race-ethnicity.md index b474a0ace..783116827 100644 --- a/src/posts/articles/poverty-race-ethnicity.md +++ b/src/posts/articles/poverty-race-ethnicity.md @@ -2,7 +2,7 @@ As we observe Juneteenth, a day that marks the end of slavery in the United Stat ## Current poverty rates: a racial and ethnic breakdown -In our commitment to bring transparency to the impact of public policies, we’re excited to extend PolicyEngine to include racial and ethnic breakdowns, supplementing our existing age and [sex](https://policyengine.org/us/blog/breaking-down-us-poverty-impacts-by-sex) analyses. +In our commitment to bring transparency to the impact of public policies, we’re excited to extend PolicyEngine to include racial and ethnic breakdowns, supplementing our existing age and [sex](https://legacy.policyengine.org/us/blog/breaking-down-us-poverty-impacts-by-sex) analyses. To provide a comprehensive perspective, we use the Supplemental Poverty Measure (SPM) in our evaluations. This measure goes beyond the traditional Official Poverty Measure (OPM) by accounting for variables such as taxes, in-kind benefits, local housing costs, among others. @@ -18,7 +18,7 @@ Applying current law to the 2021 Current Population Survey March Supplement, we ## Policy reforms through a racial and ethnic lens -To illustrate these new capabilities, consider the example of a [universal basic income of $100 per month](https://policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=15208®ion=us&timePeriod=2023&baseline=2). Our analysis reveals that this reform would lower the SPM poverty rate by 24%, with a more pronounced effect among Black and Hispanic Americans. +To illustrate these new capabilities, consider the example of a [universal basic income of $100 per month](https://legacy.policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=15208®ion=us&timePeriod=2023&baseline=2). Our analysis reveals that this reform would lower the SPM poverty rate by 24%, with a more pronounced effect among Black and Hispanic Americans. ![](https://cdn-images-1.medium.com/max/2876/0*ZjUKWl8gUE0jKxVT) diff --git a/src/posts/articles/prime-minister-liz-trusss-energy-bill-price-cap.md b/src/posts/articles/prime-minister-liz-trusss-energy-bill-price-cap.md index 7432ca95a..700ce918f 100644 --- a/src/posts/articles/prime-minister-liz-trusss-energy-bill-price-cap.md +++ b/src/posts/articles/prime-minister-liz-trusss-energy-bill-price-cap.md @@ -1,6 +1,6 @@ New UK Prime Minister Liz Truss last week announced that the [energy bill price cap will remain at £2,500](https://helpforhouseholds.campaign.gov.uk/help-with-your-bills/) for the typical household until 2024, rather than rising as planned. The government will compensate energy companies for the difference. -[PolicyEngine now models this reform](https://policyengine.org/uk/population-impact/treasury/energy-price-guarantee) as a household transfer, as well as any customisable price cap change by quarter. We estimate that Truss’s plan will cost £50 billion over the next year and cut poverty 20%. Higher income households benefit less on a percentage basis and more on an absolute pound basis, and the policy disproportionately reduces senior poverty. +[PolicyEngine now models this reform](https://legacy.policyengine.org/uk/population-impact/treasury/energy-price-guarantee) as a household transfer, as well as any customisable price cap change by quarter. We estimate that Truss’s plan will cost £50 billion over the next year and cut poverty 20%. Higher income households benefit less on a percentage basis and more on an absolute pound basis, and the policy disproportionately reduces senior poverty. This blog post explains our methodology and dives deeper into the results. For an analysis of the policy itself, see [our article published by UK in a Changing Europe](https://ukandeu.ac.uk/energy-subsidy/). @@ -16,7 +16,7 @@ Like all PolicyEngine results, the price cap assumes no behavioural responses; t ## Impacts of Liz Truss’s energy bill price cap -PolicyEngine now allows users to change the energy bill price caps in each of the coming four quarters. We’ve now set each of these to £2,500, per the policy reform. [Setting the baseline values back to their projections estimates Liz Truss’s cap](https://policyengine.org/uk/policy/treasury/energy-price-guarantee). +PolicyEngine now allows users to change the energy bill price caps in each of the coming four quarters. We’ve now set each of these to £2,500, per the policy reform. [Setting the baseline values back to their projections estimates Liz Truss’s cap](https://legacy.policyengine.org/uk/policy/treasury/energy-price-guarantee). The distributional impact is progressive in relative terms: lower deciles see a higher percent increase to net income than higher deciles, from 14% to 2%. At the same time, the nominal increases are larger for higher-income households (from £1,400 to £2,400). This is largely due to the fact that energy consumption makes up a larger percentage of low-income budgets than it does for high-income households. @@ -30,4 +30,4 @@ Multiple measures of inequality also fall. The Gini index of income inequality f The reforms are based on energy usage, not income, so they avoid changing marginal tax rates. -To compare against other levels at which to fix the price cap, [see the reform on PolicyEngine](https://policyengine.org/uk/policy/treasury/energy-price-guarantee). +To compare against other levels at which to fix the price cap, [see the reform on PolicyEngine](https://legacy.policyengine.org/uk/policy/treasury/energy-price-guarantee). diff --git a/src/posts/articles/projected-impact-of-the-uks-extended-energy-price-guarantee.md b/src/posts/articles/projected-impact-of-the-uks-extended-energy-price-guarantee.md index d9437d35d..d48cf8187 100644 --- a/src/posts/articles/projected-impact-of-the-uks-extended-energy-price-guarantee.md +++ b/src/posts/articles/projected-impact-of-the-uks-extended-energy-price-guarantee.md @@ -8,24 +8,24 @@ To model the EPG, we integrate consumption data (including domestic energy) from ![](https://cdn-images-1.medium.com/max/3200/0*uJbpkMLFSK2SZTts) -We model the EPG as an increase in incomes, and find that the [absolute impact increases with income](https://policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1): households in the bottom income decile will gain an average of £78, while those in the top decile will gain £155. +We model the EPG as an increase in incomes, and find that the [absolute impact increases with income](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileAverageImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1): households in the bottom income decile will gain an average of £78, while those in the top decile will gain £155. ![](https://cdn-images-1.medium.com/max/3200/0*RFB646z2NHZEM6yE) -As a [percentage of net income](https://policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), however, households in the bottom income decile would gain 0.7%, and those in the top decile would gain 0.1%. +As a [percentage of net income](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), however, households in the bottom income decile would gain 0.7%, and those in the top decile would gain 0.1%. ![](https://cdn-images-1.medium.com/max/3200/0*wXy3ocBoFdcAR_d3) -Accordingly, we project that the EPG extension would [reduce income inequality by about 0.2%](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1) across metrics including the Gini coefficient, the top-10 and the top-1 percent shares. +Accordingly, we project that the EPG extension would [reduce income inequality by about 0.2%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1) across metrics including the Gini coefficient, the top-10 and the top-1 percent shares. ![](https://cdn-images-1.medium.com/max/3200/0*ykeEoMNKJXTRjmIb) -Extending the EPG would [lower poverty by 0.9%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), disproportionately among pensioners.[^1] It would also[ lower deep poverty by 1%](https://policyengine.org/uk/policy?focus=policyOutput.deepPovertyImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), similarly across age groups. +Extending the EPG would [lower poverty by 0.9%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), disproportionately among pensioners.[^1] It would also[ lower deep poverty by 1%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.deepPovertyImpact&reform=5847®ion=uk&timePeriod=2023&baseline=1), similarly across age groups. ![](https://cdn-images-1.medium.com/max/3200/0*uHZzOqtB7nZ7m0TO) -You can [view the impact interactively in PolicyEngine here](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=5847®ion=uk&timePeriod=2023&baseline=1), and even model your own custom EPG reform. You can also [enter your household information](https://policyengine.org/uk/household?focus=intro&reform=5847®ion=uk&timePeriod=2023&baseline=1) to see how the EPG extension would affect you (to do this, enter the ‘domestic energy consumption’ field under _Consumption / Energy_ or by searching in the top left). +You can [view the impact interactively in PolicyEngine here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=5847®ion=uk&timePeriod=2023&baseline=1), and even model your own custom EPG reform. You can also [enter your household information](https://legacy.policyengine.org/uk/household?focus=intro&reform=5847®ion=uk&timePeriod=2023&baseline=1) to see how the EPG extension would affect you (to do this, enter the ‘domestic energy consumption’ field under _Consumption / Energy_ or by searching in the top left). -At PolicyEngine, we remain committed to providing free open-source software that enables the analysis of public policy impacts. Users with access to UK Data Service microdata can [reproduce our analysis](https://policyengine.org/uk/policy?focus=policyOutput.codeReproducibility&reform=5847®ion=uk&timePeriod=2023&baseline=1&household=10576) with the [open-source PolicyEngine UK microsimulation model](https://github.com/PolicyEngine/policyengine-uk). For questions or comments on these impacts, feel free to [get in touch](mailto:hello@policyengine.org). +At PolicyEngine, we remain committed to providing free open-source software that enables the analysis of public policy impacts. Users with access to UK Data Service microdata can [reproduce our analysis](https://legacy.policyengine.org/uk/policy?focus=policyOutput.codeReproducibility&reform=5847®ion=uk&timePeriod=2023&baseline=1&household=10576) with the [open-source PolicyEngine UK microsimulation model](https://github.com/PolicyEngine/policyengine-uk). For questions or comments on these impacts, feel free to [get in touch](mailto:hello@policyengine.org). [^1]: PolicyEngine's poverty rate impacts are lower than an initial estimate [published on the day](https://twitter.com/PolicyEngineUK/status/1631600746520010754), due to modelling improvements on cost-of-living payments in the baseline. See the changelog entry in the microsimulation model [here](https://github.com/PolicyEngine/policyengine-uk/compare/0.41.10...0.41.11). diff --git a/src/posts/articles/raising-the-marriage-allowance-from-10-to-100.md b/src/posts/articles/raising-the-marriage-allowance-from-10-to-100.md index ff88e10e0..bdb62c716 100644 --- a/src/posts/articles/raising-the-marriage-allowance-from-10-to-100.md +++ b/src/posts/articles/raising-the-marriage-allowance-from-10-to-100.md @@ -2,15 +2,15 @@ On 21 July, UK Prime Minister candidate Liz Truss promised to “review the taxa In this blog post, I’ll explain the marriage allowance and show how to use PolicyEngine to score two potential reforms to the policy: -1. [Raising the marriage allowance from 10% to 100%.](https://policyengine.org/uk/population-impact?marriage_allowance_cap=100) PolicyEngine estimates that this reform would cost £3.05 billion in 2022, lowering poverty by 0.5%, benefiting 15% of the population, and widening the marriage allowance’s earnings dead zone by roughly a factor of 10. +1. [Raising the marriage allowance from 10% to 100%.](https://legacy.policyengine.org/uk/population-impact?marriage_allowance_cap=100) PolicyEngine estimates that this reform would cost £3.05 billion in 2022, lowering poverty by 0.5%, benefiting 15% of the population, and widening the marriage allowance’s earnings dead zone by roughly a factor of 10. -1. [Raising the marriage allowance from 10% to 100% and removing the limitation to Basic Rate taxpayers.](https://policyengine.org/uk/population-impact?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1) PolicyEngine estimates that this reform would cost £5.91 billion in 2022, lowering poverty by 0.5%, benefiting 20% of the population, and removing the marriage allowance’s earnings dead zone. +1. [Raising the marriage allowance from 10% to 100% and removing the limitation to Basic Rate taxpayers.](https://legacy.policyengine.org/uk/population-impact?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1) PolicyEngine estimates that this reform would cost £5.91 billion in 2022, lowering poverty by 0.5%, benefiting 20% of the population, and removing the marriage allowance’s earnings dead zone. ## What is the marriage allowance? The [marriage allowance](https://www.gov.uk/marriage-allowance) allows a person to transfer £1,260 of their personal allowance (10% of the maximum) to their spouse, if their income is below the personal allowance and their spouse pays income tax at the basic rate (income between £12,571 and £50,270). -To compute the impact of the current marriage allowance in PolicyEngine, [compare the current law to a baseline without the marriage allowance.](https://policyengine.org/uk/population-impact?marriage_allowance_cap=10&baseline_marriage_allowance_cap=0) +To compute the impact of the current marriage allowance in PolicyEngine, [compare the current law to a baseline without the marriage allowance.](https://legacy.policyengine.org/uk/population-impact?marriage_allowance_cap=10&baseline_marriage_allowance_cap=0) For example, consider a married couple with one child. One person earns £30,000, and the other earns £0. Without the marriage allowance, they would pay £5,954 in taxes; the marriage allowance lowers that by £252 to £5,702. However, since DWP bases benefits on after-tax income, they also lose £139 of benefits. In total, the marriage allowance increases their net income by £113, or about 0.4%. @@ -24,7 +24,7 @@ Overall, PolicyEngine estimates that the marriage allowance currently costs £84 ## How does increasing the marriage allowance from 10% to 100% affect a household? -Let’s return to our sample household: a married couple with one child, one of whom earns £30,000 and the other earns £0. If we [compare their situation](https://policyengine.org/uk/household?marriage_allowance_cap=100) under current law to that in which the marriage allowance rises from 10% to 100%, we see that the reform would increase their net income by £2,143, or 8.4%. This again comes from lower taxes, which are partly offset by lower benefits. +Let’s return to our sample household: a married couple with one child, one of whom earns £30,000 and the other earns £0. If we [compare their situation](https://legacy.policyengine.org/uk/household?marriage_allowance_cap=100) under current law to that in which the marriage allowance rises from 10% to 100%, we see that the reform would increase their net income by £2,143, or 8.4%. This again comes from lower taxes, which are partly offset by lower benefits. ![](https://cdn-images-1.medium.com/max/3200/0*dS7FHuDa6qzqDSHD) @@ -36,7 +36,7 @@ The reform lowers marginal tax rates by 9.0p for earnings between £13,830 and ![](https://cdn-images-1.medium.com/max/3200/0*IlxZTi9EJ5bsJng7) -[You can enter your household information here to see how it would affect you.](https://policyengine.org/uk/household?marriage_allowance_cap=100) +[You can enter your household information here to see how it would affect you.](https://legacy.policyengine.org/uk/household?marriage_allowance_cap=100) ## How does increasing the marriage allowance from 10% to 100% affect the population? @@ -60,7 +60,7 @@ We can aggregate these impacts to find that the reform reduces inequality accord ![](https://cdn-images-1.medium.com/max/3200/0*swg8UEVRUQgcjA64) -[Explore the full population impacts of the reform in PolicyEngine here](https://policyengine.org/uk/population-impact?marriage_allowance_cap=100), and [find how it would affect your own household here.](https://policyengine.org/uk/household?marriage_allowance_cap=100) +[Explore the full population impacts of the reform in PolicyEngine here](https://legacy.policyengine.org/uk/population-impact?marriage_allowance_cap=100), and [find how it would affect your own household here.](https://legacy.policyengine.org/uk/household?marriage_allowance_cap=100) ## How does removing the Basic Rate restriction affect households? @@ -78,4 +78,4 @@ Compared to only raising the percentage, removing the Basic Rate restriction rou ![](https://cdn-images-1.medium.com/max/3200/0*I28U_nsGjYjwsAm3) -[Explore the full population impacts of the reform in PolicyEngine here](https://policyengine.org/uk/population-impact?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1), and [find how it would affect your own household here.](https://policyengine.org/uk/household?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1) +[Explore the full population impacts of the reform in PolicyEngine here](https://legacy.policyengine.org/uk/population-impact?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1), and [find how it would affect your own household here.](https://legacy.policyengine.org/uk/household?marriage_allowance_cap=100&abolish_marriage_allowance_income_condition=1) diff --git a/src/posts/articles/reform-uks-emergency-recovery-plan.md b/src/posts/articles/reform-uks-emergency-recovery-plan.md index e180b80c0..200970fb3 100644 --- a/src/posts/articles/reform-uks-emergency-recovery-plan.md +++ b/src/posts/articles/reform-uks-emergency-recovery-plan.md @@ -56,7 +56,7 @@ The Economic Recovery Plan would have mixed effects on work incentives. The Pers For example, a married couple with two children would see their marginal tax rate fall by 9% while they remain within Universal Credit eligibility (the marginal rate does not fall by the full 20% basic rate due to the Universal Credit taper). As a result of the reforms, they would exit UC eligibility earlier, lowering marginal tax rates by up to 37 percentage points. -However, once reaching the higher rate threshold, they face a work disincentive that is now more punitive under the Economic Recovery Plan: the Marriage Allowance income limit. Under the Marriage Allowance, couples can transfer up to 10% of the Personal Allowance to the higher earner of the two, if that higher earner is a basic rate taxpayer. This causes a sudden increase in tax liability (usually described as a [‘cliff’](https://policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs)) when the earner reaches the end of the basic rate region, and this cliff is made larger by the increased size of the Personal Allowance. +However, once reaching the higher rate threshold, they face a work disincentive that is now more punitive under the Economic Recovery Plan: the Marriage Allowance income limit. Under the Marriage Allowance, couples can transfer up to 10% of the Personal Allowance to the higher earner of the two, if that higher earner is a basic rate taxpayer. This causes a sudden increase in tax liability (usually described as a [‘cliff’](https://legacy.policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs)) when the earner reaches the end of the basic rate region, and this cliff is made larger by the increased size of the Personal Allowance. Further up the income spectrum, another work disincentive under current law is the phase-out of the Personal Allowance, at a rate of 50p per £1 earned over £100,000. This causes a 62% marginal tax rate under current law between £100,000 and £125,000; under the Economic Recovery Plan, this high-marginal tax rate region would be extended to £140,000. @@ -72,4 +72,4 @@ _Change to net income by employment income, for a single-earner married couple w ## See the effect on your household -As always, you can [see the impact of Reform UK’s proposals on your own household](https://policyengine.org/uk/household?focus=intro&reform=3701®ion=uk&timePeriod=2023&baseline=1) (or try out a variation of them) on PolicyEngine. [Let us know](https://twitter.com/PolicyEngineUK) what policy impacts you compute! +As always, you can [see the impact of Reform UK’s proposals on your own household](https://legacy.policyengine.org/uk/household?focus=intro&reform=3701®ion=uk&timePeriod=2023&baseline=1) (or try out a variation of them) on PolicyEngine. [Let us know](https://twitter.com/PolicyEngineUK) what policy impacts you compute! diff --git a/src/posts/articles/rent-relief-act.md b/src/posts/articles/rent-relief-act.md index a9118c7d8..b5e1171ab 100644 --- a/src/posts/articles/rent-relief-act.md +++ b/src/posts/articles/rent-relief-act.md @@ -1,4 +1,4 @@ -Kamala Harris on Friday released her [economic plan](https://mailchi.mp/press.kamalaharris.com/vice-president-harris-lays-out-agenda-to-lower-costs-for-american-families), including an expanded Child Tax Credit we [analyzed](https://policyengine.org/us/research/harris-ctc) on Saturday. Absent from the housing portion of her plan was legislation she introduced in 2018 and 2019 as a Senator: the Rent Relief Act (RRA), a refundable tax credit based on income, rent paid, and local housing costs. In this post, we use the PolicyEngine model to explore its effects on different household types, and how it situates with other tax and benefit programs. We focus on a typical example, as well as two ends of the credit’s generosity spectrum, based on local housing costs, at which the bill caps countable rent. +Kamala Harris on Friday released her [economic plan](https://mailchi.mp/press.kamalaharris.com/vice-president-harris-lays-out-agenda-to-lower-costs-for-american-families), including an expanded Child Tax Credit we [analyzed](https://legacy.policyengine.org/us/research/harris-ctc) on Saturday. Absent from the housing portion of her plan was legislation she introduced in 2018 and 2019 as a Senator: the Rent Relief Act (RRA), a refundable tax credit based on income, rent paid, and local housing costs. In this post, we use the PolicyEngine model to explore its effects on different household types, and how it situates with other tax and benefit programs. We focus on a typical example, as well as two ends of the credit’s generosity spectrum, based on local housing costs, at which the bill caps countable rent. # Legislative History @@ -42,7 +42,7 @@ We will examine three examples to illustrate the Rent Relief Act’s effects on ## A Typical Example: Sherman-Denison, Texas -Consider a [single parent](https://policyengine.org/us/household?focus=householdOutput.earnings&household=46796®ion=us&timePeriod=2024&baseline=2&reform=63509) with two children living in ZIP code 75459 in Sherman-Denison, Texas, an area with SAFMRs close to the median that does not use SAFMRs for the HCV program. Suppose this household pays $1,500 per month in rent for their three-bedroom home, less than the $1,590 per month SAFMR. Suppose further that they earn $40,000 per year. The credit would cover 75% of the difference between their rent ($18,000) exceeding 30% of their income ($12,000), or 75% of $6,000 which is $4,500. +Consider a [single parent](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=46796®ion=us&timePeriod=2024&baseline=2&reform=63509) with two children living in ZIP code 75459 in Sherman-Denison, Texas, an area with SAFMRs close to the median that does not use SAFMRs for the HCV program. Suppose this household pays $1,500 per month in rent for their three-bedroom home, less than the $1,590 per month SAFMR. Suppose further that they earn $40,000 per year. The credit would cover 75% of the difference between their rent ($18,000) exceeding 30% of their income ($12,000), or 75% of $6,000 which is $4,500. We can see this visually by displaying the credit with earnings, showing the steps at $25,000 and $50,000, and their ineligibility at $60,000 income (30% of which is $1,500 per month). @@ -58,7 +58,7 @@ The steps at $25,000 and $50,000 income create cliffs. Combined with other tax a ## The Low End: Missouri studios -HUD has designated the country’s lowest SAFMR as studios in a set of ZIPs in central Missouri, at $540 per month. Consider an [individual](https://policyengine.org/us/household?focus=householdOutput.earnings&household=46651®ion=us&timePeriod=2024&baseline=2&reform=63509) living in a studio apartment in this area paying $600 per month: +HUD has designated the country’s lowest SAFMR as studios in a set of ZIPs in central Missouri, at $540 per month. Consider an [individual](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=46651®ion=us&timePeriod=2024&baseline=2&reform=63509) living in a studio apartment in this area paying $600 per month: - If their income is $0, they would receive the full $540 per month ($6,480 annually) as a credit. @@ -70,7 +70,7 @@ HUD has designated the country’s lowest SAFMR as studios in a set of ZIPs in c ![](https://cdn-images-1.medium.com/max/3128/0*aWj1gSnt06wvXQAS) -As their baseline marginal tax rate ranges from 0% to 62% in this range, the RRA [increases it](https://policyengine.org/us/household?focus=householdOutput.mtr&household=46651®ion=us&timePeriod=2024&baseline=2&reform=63509) to between 30% and 92%. +As their baseline marginal tax rate ranges from 0% to 62% in this range, the RRA [increases it](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&household=46651®ion=us&timePeriod=2024&baseline=2&reform=63509) to between 30% and 92%. **Figure 4: Rent Relief Act Marginal Tax Rate Impact on a Single Person in a Missouri Studio** @@ -80,7 +80,7 @@ As their baseline marginal tax rate ranges from 0% to 62% in this range, the RRA The country’s highest SAFMR is 4bd in several areas in San Diego: $6,960. This is also an area where SAFMR is used for HCV, raising RRA income thresholds by $25,000. -Consider a [married couple](https://policyengine.org/us/household?focus=householdOutput.earnings&household=46575®ion=us&timePeriod=2024&baseline=2&reform=63509) with three children paying at least $6,960 per month in rent in a 4bd home in one of these areas. If they have no income, they will receive the full $6,960 per month, or $83,520 per year. That will phase out at a 30% rate, until they earn $50,000, at which point the credit covers 75%, rather than 100%, of the gap between rent and 30% of their income. It then steps down again at $75,000, $100,000, and finally $125,000 income at which point they become ineligible. +Consider a [married couple](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=46575®ion=us&timePeriod=2024&baseline=2&reform=63509) with three children paying at least $6,960 per month in rent in a 4bd home in one of these areas. If they have no income, they will receive the full $6,960 per month, or $83,520 per year. That will phase out at a 30% rate, until they earn $50,000, at which point the credit covers 75%, rather than 100%, of the gap between rent and 30% of their income. It then steps down again at $75,000, $100,000, and finally $125,000 income at which point they become ineligible. **Figure 5: Rent Relief Act for a San Diego 4-bedroom** diff --git a/src/posts/articles/repealing_the_two_child_limit.md b/src/posts/articles/repealing_the_two_child_limit.md index 32e0def04..169be7cbe 100644 --- a/src/posts/articles/repealing_the_two_child_limit.md +++ b/src/posts/articles/repealing_the_two_child_limit.md @@ -1,5 +1,5 @@ _[See the full, customisable impacts on PolicyEngine -here.](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=18304®ion=uk&timePeriod=2023&baseline=1)_ +here.](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=18304®ion=uk&timePeriod=2023&baseline=1)_ ## Summary @@ -8,7 +8,7 @@ parents from receiving financial support for more than two children (with children born before 2017 exempt). Using the PolicyEngine microsimulation model, we estimate that [repealing it would cost £1.8 billion in -2023](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=18304®ion=uk&timePeriod=2023&baseline=1), +2023](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=18304®ion=uk&timePeriod=2023&baseline=1), rising to £2.8 billion in 2025 as non-exempt age cohorts replace exempt children. The repeal would also lower absolute child poverty before housing costs by 310,000 this year. @@ -29,7 +29,7 @@ found here](https://gist.github.com/nikhilwoodruff/447d86032ff481bdeb1e35aeeb3ea18c). [**_See how repealing the two-child limit would affect your household -here._**](https://policyengine.org/uk/household?focus=intro&reform=7226®ion=uk&timePeriod=2023&baseline=1) +here._**](https://legacy.policyengine.org/uk/household?focus=intro&reform=7226®ion=uk&timePeriod=2023&baseline=1) # How the policy affects households @@ -132,11 +132,11 @@ automatically generated](/images/posts/repealing_the_two_child_limit/decile_char _Figure 2: [the distributional impacts of funding the two-child limit repeal with a 1p higher rate -increase.](https://policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=18067®ion=uk&timePeriod=2023&baseline=1)_ +increase.](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=18067®ion=uk&timePeriod=2023&baseline=1)_ PolicyEngine's microsimulation modelling is completely open-source. [See the full analysis for the repeal on PolicyEngine -here.](https://policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=7226®ion=uk&timePeriod=2023&baseline=1) +here.](https://legacy.policyengine.org/uk/policy?focus=policyOutput.decileRelativeImpact&reform=7226®ion=uk&timePeriod=2023&baseline=1) If you have feedback or questions on the results in this report, please do [get in touch](mailto:hello@policyengine.org). @@ -232,7 +232,7 @@ to 1.7 million. Group](https://cpag.org.uk/sites/default/files/files/policypost/CPAG_Budget_Submission_March_2023.pdf), drawn from the UKMOD microsimulation model. PolicyEngine [applies machine learning-based algorithms to survey - microdata](https://policyengine.org/uk/blog/how-machine-learning-tools-make-policyengine-more-accurate) + microdata](https://legacy.policyengine.org/uk/blog/how-machine-learning-tools-make-policyengine-more-accurate) to counter measurement and sampling bias present in the input data, which could explain some of the disparity. diff --git a/src/posts/articles/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit.md b/src/posts/articles/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit.md index 335134ad6..4b0eb2b71 100644 --- a/src/posts/articles/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit.md +++ b/src/posts/articles/restoration-of-the-american-rescue-plan-acts-expanded-child-tax-credit.md @@ -2,15 +2,15 @@ In [Tuesday’s State of the Union speech](https://www.whitehouse.gov/briefing-r > restore the full Child Tax Credit, which gave tens of millions of parents some breathing room and cut child poverty in half, to the lowest level in history. -Biden may have been referring to the Child Tax Credit (CTC) expansion under the American Rescue Plan Act of 2021 (ARPA), which expanded the CTC in several ways. Following our [Child Tax Credit report released yesterday](https://policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023), this report describes ARPA’s CTC expansion, and PolicyEngine’s predicted impacts of restoring that expansion. +Biden may have been referring to the Child Tax Credit (CTC) expansion under the American Rescue Plan Act of 2021 (ARPA), which expanded the CTC in several ways. Following our [Child Tax Credit report released yesterday](https://legacy.policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023), this report describes ARPA’s CTC expansion, and PolicyEngine’s predicted impacts of restoring that expansion. ## What is the Child Tax Credit? -President Bill Clinton introduced the Child Tax Credit in 1997, and the Tax Cuts and Jobs Act of 2017 expanded it to create its current structure. For instance, in 2023, a married filer with one five-year-old child receives the following benefit from the CTC based on their earnings ([view this in PolicyEngine here](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962)): +President Bill Clinton introduced the Child Tax Credit in 1997, and the Tax Cuts and Jobs Act of 2017 expanded it to create its current structure. For instance, in 2023, a married filer with one five-year-old child receives the following benefit from the CTC based on their earnings ([view this in PolicyEngine here](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962)): ![](https://cdn-images-1.medium.com/max/2836/0*8VNzHFmDkAEmKVAp) -As we explain in our [Child Tax Credit article](https://policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023), the credit phases in with income due to _partial refundability_ and also phases out with income. Refundable credits can reduce one’s tax liability below zero, while the value of non-refundable credits cannot exceed one’s tax liability. Part of the Child Tax Credit, the _Additional Child Tax Credit_, is refundable, and the ACTC also phases in with income; the remainder is non-refundable. +As we explain in our [Child Tax Credit article](https://legacy.policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023), the credit phases in with income due to _partial refundability_ and also phases out with income. Refundable credits can reduce one’s tax liability below zero, while the value of non-refundable credits cannot exceed one’s tax liability. Part of the Child Tax Credit, the _Additional Child Tax Credit_, is refundable, and the ACTC also phases in with income; the remainder is non-refundable. ## How did the American Rescue Plan Act expand the Child Tax Credit? @@ -30,52 +30,52 @@ This video shows how to model these changes in PolicyEngine. To see the results, ## How would restoring the ARPA CTC expansion affect households? -[Let’s return to the married family with a five-year-old child.](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=3826®ion=us&timePeriod=2023&baseline=2&household=3227) Their maximum credit rises from $2,000 to $3,600. Parents with no income don’t benefit from the CTC today, so the combination of the increased credit and full refundability provides them the full $3,600. The benefit phases out to $1,600 if their income ranges from about $36,000 to $150,000, and the reform no longer provides a net benefit to households with income of about $181,000 or more. +[Let’s return to the married family with a five-year-old child.](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=3826®ion=us&timePeriod=2023&baseline=2&household=3227) Their maximum credit rises from $2,000 to $3,600. Parents with no income don’t benefit from the CTC today, so the combination of the increased credit and full refundability provides them the full $3,600. The benefit phases out to $1,600 if their income ranges from about $36,000 to $150,000, and the reform no longer provides a net benefit to households with income of about $181,000 or more. ![](https://cdn-images-1.medium.com/max/2104/0*kx4Lg-oIr5BXyvTm) -[Marginal tax rates rise](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=3826®ion=us&timePeriod=2023&baseline=2&household=3227) in each of the income ranges where the benefit phases out. +[Marginal tax rates rise](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=3826®ion=us&timePeriod=2023&baseline=2&household=3227) in each of the income ranges where the benefit phases out. ![](https://cdn-images-1.medium.com/max/2136/0*pmjjChx83tq1Hfu0) -You can estimate how reinstating the ARPA CTC expansion would affect your own household by [entering your information here](https://policyengine.org/us/household?focus=intro&reform=3826®ion=us&timePeriod=2023&baseline=2). +You can estimate how reinstating the ARPA CTC expansion would affect your own household by [entering your information here](https://legacy.policyengine.org/us/household?focus=intro&reform=3826®ion=us&timePeriod=2023&baseline=2). ## How would restoring the ARPA CTC expansion affect the US? -We estimate that [restoring the ARPA CTC expansion would cost $100.2 billion](https://policyengine.org/us/policy?reform=3826&focus=policyOutput.netIncome®ion=us&timePeriod=2023&baseline=2) in 2023. When scoring ARPA (2021 only), the Joint Committee on Taxation [estimate](https://www.jct.gov/publications/2021/jcx-14-21/)d a cost of [$109.5 billion](https://www.jct.gov/publications/2021/jcx-14-21/). [OpenRG estimated $100.7 billion](https://www.openrg.com/reports/QN_ARPA_Distribution.pdf) using the open source Tax-Calculator model (I coauthored this analysis). +We estimate that [restoring the ARPA CTC expansion would cost $100.2 billion](https://legacy.policyengine.org/us/policy?reform=3826&focus=policyOutput.netIncome®ion=us&timePeriod=2023&baseline=2) in 2023. When scoring ARPA (2021 only), the Joint Committee on Taxation [estimate](https://www.jct.gov/publications/2021/jcx-14-21/)d a cost of [$109.5 billion](https://www.jct.gov/publications/2021/jcx-14-21/). [OpenRG estimated $100.7 billion](https://www.openrg.com/reports/QN_ARPA_Distribution.pdf) using the open source Tax-Calculator model (I coauthored this analysis). -While the ARPA CTC expansion provides greater benefits to low-income families than higher-income families, it [provides less to low-income households](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) than middle-income households because they have fewer children. The program also provides high-income families less because of the phase-out. +While the ARPA CTC expansion provides greater benefits to low-income families than higher-income families, it [provides less to low-income households](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) than middle-income households because they have fewer children. The program also provides high-income families less because of the phase-out. ![](https://cdn-images-1.medium.com/max/2664/0*qAUaf1GWBDmMtf1L) -As a percentage of net income, however, restoring the ARPA CTC would strictly [provide greater benefits to lower income deciles](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=3826®ion=us&timePeriod=2023&baseline=2). +As a percentage of net income, however, restoring the ARPA CTC would strictly [provide greater benefits to lower income deciles](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=3826®ion=us&timePeriod=2023&baseline=2). ![](https://cdn-images-1.medium.com/max/2764/0*YCCpCYPTm7MQoMW6) -Restoring the ARPA CTC would [benefit households comprising 41% of Americans](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=3826®ion=us&timePeriod=2023&baseline=2), disproportionately those in the fourth through eighth income deciles ([the current CTC benefits 45% of Americans](https://policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023)). It would raise net income by at least 5% for 27% of Americans, disproportionately those in the fourth and fifth income deciles. +Restoring the ARPA CTC would [benefit households comprising 41% of Americans](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=3826®ion=us&timePeriod=2023&baseline=2), disproportionately those in the fourth through eighth income deciles ([the current CTC benefits 45% of Americans](https://legacy.policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023)). It would raise net income by at least 5% for 27% of Americans, disproportionately those in the fourth and fifth income deciles. ![](https://cdn-images-1.medium.com/max/2696/0*Mmbr7KNvXN9YLM79) -[Poverty would fall by 9%, and child poverty would fall 37%.](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) When evaluating the ARPA CTC’s impact on child poverty in 2021, the [Niskanen Center](https://www.niskanencenter.org/wp-content/uploads/2021/02/Analysis-of-the-Romney-Child-Allowance_final.pdf) and the [American Enterprise Institute](https://www.aei.org/wp-content/uploads/2021/02/The-Tax-Benefits-of-Parenthood.pdf#page=22) projected reductions of 39% and 35%, respectively. +[Poverty would fall by 9%, and child poverty would fall 37%.](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) When evaluating the ARPA CTC’s impact on child poverty in 2021, the [Niskanen Center](https://www.niskanencenter.org/wp-content/uploads/2021/02/Analysis-of-the-Romney-Child-Allowance_final.pdf) and the [American Enterprise Institute](https://www.aei.org/wp-content/uploads/2021/02/The-Tax-Benefits-of-Parenthood.pdf#page=22) projected reductions of 39% and 35%, respectively. In the State of the Union, President Biden said that the “full Child Tax Credit…cut child poverty in half”. He may have been referring to the full ARPA, which also included a round of relief checks, enhancements to the Supplemental Nutrition Assistance Program, and other reforms. The Columbia Center on Poverty and Social Policy estimated that [ARPA would reduce child poverty by 56%](https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/6113eddb3cde100cb68904ee/1628696027691/Poverty-Reduction-Analysis-American-Rescue-Plan-CPSP-2021.pdf). The Census Bureau reported that [child poverty fell 46% from 2020 to 2021](https://www.census.gov/content/dam/Census/library/publications/2022/demo/p60-277.pdf#page=16), from 9.7% to 5.2%. -Halving child poverty with the ARPA CTC structure would require a [$4,400 benefit](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=3840®ion=us&timePeriod=2023&baseline=2&household=2265), rather than $3,000 or $3,600. This would cost $177 billion, 77% more than restoring the ARPA CTC expansion. +Halving child poverty with the ARPA CTC structure would require a [$4,400 benefit](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=3840®ion=us&timePeriod=2023&baseline=2&household=2265), rather than $3,000 or $3,600. This would cost $177 billion, 77% more than restoring the ARPA CTC expansion. ![](https://cdn-images-1.medium.com/max/2768/0*1RnxfjLeF3NsHxT2) -Under the ARPA CTC expansion, deep poverty — the population share below half their Supplemental Poverty Measure threshold — would [fall 11%, and deep child poverty would fall 72%.](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) +Under the ARPA CTC expansion, deep poverty — the population share below half their Supplemental Poverty Measure threshold — would [fall 11%, and deep child poverty would fall 72%.](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) ![](https://cdn-images-1.medium.com/max/2736/0*By0I0_qhekKlxkIv) -Restoring the ARPA CTC would [reduce each of the three income inequality measures we report](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=3826®ion=us&timePeriod=2023&baseline=2), especially the Gini index at 1.9%. The Gini index reflects low-income households more than the top 10% and 1% income shares do, and these are the groups disproportionately affected by the ARPA CTC expansion. +Restoring the ARPA CTC would [reduce each of the three income inequality measures we report](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=3826®ion=us&timePeriod=2023&baseline=2), especially the Gini index at 1.9%. The Gini index reflects low-income households more than the top 10% and 1% income shares do, and these are the groups disproportionately affected by the ARPA CTC expansion. ![](https://cdn-images-1.medium.com/max/2716/0*Lvup1GU6M0wxFGzN) -By increasing marginal tax rates among low-income households most likely to experience [cliffs](https://policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs), the [ARPA CTC expansion](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) increases their prevalence. The [current CTC](https://policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023) reduces marginal tax rates in the phase-in earnings region, and lowers the cliff rate and gap by 1.0% and 0.6%, almost exactly an offset of the ARPA reform. +By increasing marginal tax rates among low-income households most likely to experience [cliffs](https://legacy.policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs), the [ARPA CTC expansion](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=3826®ion=us&timePeriod=2023&baseline=2) increases their prevalence. The [current CTC](https://legacy.policyengine.org/us/blog/2023-02-09-the-child-tax-credit-in-2023) reduces marginal tax rates in the phase-in earnings region, and lowers the cliff rate and gap by 1.0% and 0.6%, almost exactly an offset of the ARPA reform. ![](https://cdn-images-1.medium.com/max/2284/0*o6ZxOJ5izxBcLASn) -Were the US to restore the American Rescue Plan’s expanded Child Tax Credit, two in five Americans would benefit, poverty would fall 9%, and a broad measure of inequality would fall 2%. PolicyEngine also computes impacts for any state; for example, the ARPA CTC would [provide $10 billion to Texans](https://policyengine.org/us/policy?reform=3826&focus=policyOutput.netIncome®ion=tx&timePeriod=2023&baseline=2) (the cost to the US), [benefit 46% of Texans](https://policyengine.org/us/policy?reform=3826&focus=policyOutput.intraDecileImpact®ion=tx&timePeriod=2023&baseline=2), and [cut Texas’s child poverty rate by 32%](https://policyengine.org/us/policy?reform=3826&focus=policyOutput.povertyImpact®ion=tx&timePeriod=2023&baseline=2). These impacts, as well as the $100 billion cost and higher marginal tax rates, would likely produce macroeconomic effects that PolicyEngine does not yet model. +Were the US to restore the American Rescue Plan’s expanded Child Tax Credit, two in five Americans would benefit, poverty would fall 9%, and a broad measure of inequality would fall 2%. PolicyEngine also computes impacts for any state; for example, the ARPA CTC would [provide $10 billion to Texans](https://legacy.policyengine.org/us/policy?reform=3826&focus=policyOutput.netIncome®ion=tx&timePeriod=2023&baseline=2) (the cost to the US), [benefit 46% of Texans](https://legacy.policyengine.org/us/policy?reform=3826&focus=policyOutput.intraDecileImpact®ion=tx&timePeriod=2023&baseline=2), and [cut Texas’s child poverty rate by 32%](https://legacy.policyengine.org/us/policy?reform=3826&focus=policyOutput.povertyImpact®ion=tx&timePeriod=2023&baseline=2). These impacts, as well as the $100 billion cost and higher marginal tax rates, would likely produce macroeconomic effects that PolicyEngine does not yet model. -With PolicyEngine, you can model highly customizable reforms to the Child Tax Credit and other programs — not only those enacted in the past like the American Rescue Plan Act. Try your own policy model at [policyengine.org](http://policyengine.org). +With PolicyEngine, you can model highly customizable reforms to the Child Tax Credit and other programs — not only those enacted in the past like the American Rescue Plan Act. Try your own policy model at [policyengine.org](http://legacy.policyengine.org). diff --git a/src/posts/articles/restoring-arpa-eitc.md b/src/posts/articles/restoring-arpa-eitc.md index 4e0ba4ae4..5e55e5c32 100644 --- a/src/posts/articles/restoring-arpa-eitc.md +++ b/src/posts/articles/restoring-arpa-eitc.md @@ -12,15 +12,15 @@ Historically, the EITC did not support childless workers. That changed with the ## What are the current impacts of the childless EITC? -For each individual, the IRS [determines the value of the EITC](https://www.irs.gov/pub/irs-drop/rp-22-38.pdf) by earned income — which includes wages, salaries, and self-employment income. For workers without children in tax year 2023, the EITC provides a credit of 7.65% of earned income with a maximum credit of $600. The phaseout begins when annual income exceeds $9,800 and terminates when income reaches $17,640. To view this graphically, see the chart below from [this PolicyEngine page](https://policyengine.org/us/household?focus=householdOutput.earnings&household=14695) that displays the credit amount received by a single individual without children at different levels of earned income. +For each individual, the IRS [determines the value of the EITC](https://www.irs.gov/pub/irs-drop/rp-22-38.pdf) by earned income — which includes wages, salaries, and self-employment income. For workers without children in tax year 2023, the EITC provides a credit of 7.65% of earned income with a maximum credit of $600. The phaseout begins when annual income exceeds $9,800 and terminates when income reaches $17,640. To view this graphically, see the chart below from [this PolicyEngine page](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&household=14695) that displays the credit amount received by a single individual without children at different levels of earned income. ![](https://cdn-images-1.medium.com/max/3076/0*PKoG8QuJtyyrVTe5) -Correspondingly, such an individual faces a spike in their marginal tax rate between $17,500 and $19,000 of employment income when the EITC completely phases out. To model the impact of the childless EITC on marginal tax rates in PolicyEngine, visit [this page](https://policyengine.org/us/household?focus=householdOutput.mtr&household=14695). +Correspondingly, such an individual faces a spike in their marginal tax rate between $17,500 and $19,000 of employment income when the EITC completely phases out. To model the impact of the childless EITC on marginal tax rates in PolicyEngine, visit [this page](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&household=14695). -To compute the macro impact of the childless EITC using PolicyEngine, [compare current law against abolishing it](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=6525). According to this simulation, [the childless EITC costs](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=6525) $2.3 billion. This represents 5.4% of our [projected total EITC cost](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=5331) of $42.7bn. However, this figure falls 38.8% below the [JCT estimate of the program](https://www.jct.gov/publications/2022/jcx-22-22/), $69.8bn, which likely stems from the CPS under-capturing low-income households. [We will enhance the CPS data later this year](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis), which should more closely align this estimate to administrative totals. +To compute the macro impact of the childless EITC using PolicyEngine, [compare current law against abolishing it](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=6525). According to this simulation, [the childless EITC costs](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=6525) $2.3 billion. This represents 5.4% of our [projected total EITC cost](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=5331) of $42.7bn. However, this figure falls 38.8% below the [JCT estimate of the program](https://www.jct.gov/publications/2022/jcx-22-22/), $69.8bn, which likely stems from the CPS under-capturing low-income households. [We will enhance the CPS data later this year](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis), which should more closely align this estimate to administrative totals. -Additionally, we project that the childless EITC [reduces the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by 0.6% and [the deep poverty rate](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by 0.8%, and [increases the average household’s net income](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by $17. The childless EITC disproportionately benefits lower-income workers, but due to the small absolute impact, it [reduces income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by less than 0.1%. +Additionally, we project that the childless EITC [reduces the poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by 0.6% and [the deep poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by 0.8%, and [increases the average household’s net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by $17. The childless EITC disproportionately benefits lower-income workers, but due to the small absolute impact, it [reduces income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=us&timePeriod=2023&baseline=6525) by less than 0.1%. ## How did the ARPA expand the childless EITC? @@ -56,29 +56,29 @@ As discussed above, we follow the CPS data’s understatement of low-income tax ## How would restoring the ARPA childless EITC expansion affect the US? -To compute the population-level impacts of restoring ARPA’s EITC expansion, click on ‘find an existing policy’ and select ‘[Restoring the ARPA EITC](https://policyengine.org/us/policy?focus=gov®ion=us&timePeriod=2023&baseline=2&reform=6524).’ According to this model, the reform [would cost $10.4bn](https://policyengine.org/us/policy?focus=policyOutput.netIncome®ion=us&timePeriod=2023&baseline=2&reform=6524) in 2023 and [increase the average household’s net income by $79](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). Because filers living in the same household can qualify for the EITC, all income deciles would experience a rise in average net income. +To compute the population-level impacts of restoring ARPA’s EITC expansion, click on ‘find an existing policy’ and select ‘[Restoring the ARPA EITC](https://legacy.policyengine.org/us/policy?focus=gov®ion=us&timePeriod=2023&baseline=2&reform=6524).’ According to this model, the reform [would cost $10.4bn](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome®ion=us&timePeriod=2023&baseline=2&reform=6524) in 2023 and [increase the average household’s net income by $79](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). Because filers living in the same household can qualify for the EITC, all income deciles would experience a rise in average net income. ![](https://cdn-images-1.medium.com/max/3200/0*ONBi9tKp9KU5r430) -However, in percentage terms, the policy would provide [more significant benefits to lower-income deciles](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). The relative change in income is highest for the lowest decile at 0.79% and decreases as the income decile increases. +However, in percentage terms, the policy would provide [more significant benefits to lower-income deciles](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). The relative change in income is highest for the lowest decile at 0.79% and decreases as the income decile increases. ![](https://cdn-images-1.medium.com/max/3200/0*L3XIeQX8BmRApiXG) -These benefits would [affect households comprising 12% of the population](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). For 3.2% of Americans, the policy would cause net incomes to rise by more than 5% — disproportionately those in the bottom four deciles. +These benefits would [affect households comprising 12% of the population](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). For 3.2% of Americans, the policy would cause net incomes to rise by more than 5% — disproportionately those in the bottom four deciles. ![](https://cdn-images-1.medium.com/max/2744/0*xmfrxZWnWHnjFULM) -Our model of the Supplemental Poverty Measure indicates that the reform [reduces the overall poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) from 9.6% to 9.4%, a 2% decline. +Our model of the Supplemental Poverty Measure indicates that the reform [reduces the overall poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) from 9.6% to 9.4%, a 2% decline. Unsurprisingly, the most significant poverty reduction would be for working-age adults, as the expanded credits would accrue directly to employed adults without children. However, the child poverty rate would decline as well. This is likely due to adults living in households with children — but who are not themselves parents — newly qualifying for the EITC under the ARPA expansion. Additionally, the poverty rate for seniors would decline by 0.8%, likely due to ARPA eliminating the maximum age requirement. ![](https://cdn-images-1.medium.com/max/2704/0*6vdoNuRsqVxry6Sw) -The expansion would also [lower deep poverty](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) — the population share below half their Supplemental Poverty Measure threshold — by 0.9%. Again with the most significant reduction for working-age adults. +The expansion would also [lower deep poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) — the population share below half their Supplemental Poverty Measure threshold — by 0.9%. Again with the most significant reduction for working-age adults. ![](https://cdn-images-1.medium.com/max/2636/0*9n6R0cOgRIp8M_83) -The reductions in [poverty](https://policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) and [deep poverty](https://policyengine.org/us/policy?focus=policyOutput.genderDeepPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) from restoring ARPA’s childless EITC expansion would be slightly larger for males than females. +The reductions in [poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) and [deep poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderDeepPovertyImpact®ion=us&timePeriod=2023&baseline=2&reform=6524) from restoring ARPA’s childless EITC expansion would be slightly larger for males than females. ![](https://cdn-images-1.medium.com/max/2640/0*0R00fQj5KFC1CeDP) @@ -86,9 +86,9 @@ For men and women, the reform cuts deep poverty by about half as much as it cuts ![](https://cdn-images-1.medium.com/max/2752/0*LBdDOM9LeUG_w_OQ) -Additionally, the reform would [reduce income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact®ion=us&timePeriod=2023&baseline=2&reform=6524), but only slightly. The Gini coefficient — a measure of income inequality — would decrease from 0.414 to 0.413. The share of income held by the top decile of households would fall from 31.6% to 31.5%, and the share held by the top 1% would remain stable at 7.8%. +Additionally, the reform would [reduce income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact®ion=us&timePeriod=2023&baseline=2&reform=6524), but only slightly. The Gini coefficient — a measure of income inequality — would decrease from 0.414 to 0.413. The share of income held by the top decile of households would fall from 31.6% to 31.5%, and the share held by the top 1% would remain stable at 7.8%. -Lastly, restoring the ARPA EITC would make “cliffs” (a.k.a. [benefit cliffs or welfare cliffs](https://policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs)) [more prevalent](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). The cliff rate — the share of households whose net income would fall if each adult earned an additional $2,000 — would remain unchanged. However, the cliff gap — the sum of the losses incurred by all households on a cliff — would increase by 0.4%. +Lastly, restoring the ARPA EITC would make “cliffs” (a.k.a. [benefit cliffs or welfare cliffs](https://legacy.policyengine.org/us/blog/2023-02-02-how-would-reforms-affect-cliffs)) [more prevalent](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact®ion=us&timePeriod=2023&baseline=2&reform=6524). The cliff rate — the share of households whose net income would fall if each adult earned an additional $2,000 — would remain unchanged. However, the cliff gap — the sum of the losses incurred by all households on a cliff — would increase by 0.4%. The Biden administration has proposed making ARPA’s EITC expansion for childless workers permanent to “help pull low-paid workers out of poverty.” diff --git a/src/posts/articles/rishi-sunaks-proposal-to-cut-the-basic-rate-to-16-percent.md b/src/posts/articles/rishi-sunaks-proposal-to-cut-the-basic-rate-to-16-percent.md index 1b9422aa4..6764339f8 100644 --- a/src/posts/articles/rishi-sunaks-proposal-to-cut-the-basic-rate-to-16-percent.md +++ b/src/posts/articles/rishi-sunaks-proposal-to-cut-the-basic-rate-to-16-percent.md @@ -10,7 +10,7 @@ PolicyEngine estimates that cutting the basic rate from 20p to 16p in 2022 would - Produce a mixed impact on income inequality -[See the interactive simulation in PolicyEngine here.](https://policyengine.org/uk/population-impact?basic_rate=16) +[See the interactive simulation in PolicyEngine here.](https://legacy.policyengine.org/uk/population-impact?basic_rate=16) ## Budgetary impact @@ -18,7 +18,7 @@ The reform would lower tax revenues by £19.0 billion, and also lower benefit ou ![](https://cdn-images-1.medium.com/max/3200/0*EXIQtIvwQGyXNyM5) -PolicyEngine is a “static” model, meaning that it assumes no behavioural responses. In its dynamic model that assumes behavioural responses, [HMRC estimates that a 1p change to basic rate would cost £5.25 billion in 2023–24](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2022) (PolicyEngine estimates that [lowering basic rate to 19p would cost £4.7 billion](https://policyengine.org/uk/population-impact?basic_rate=19)). A linear extrapolation would therefore produce a £21 billion budgetary estimate from HMRC. +PolicyEngine is a “static” model, meaning that it assumes no behavioural responses. In its dynamic model that assumes behavioural responses, [HMRC estimates that a 1p change to basic rate would cost £5.25 billion in 2023–24](https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-june-2022) (PolicyEngine estimates that [lowering basic rate to 19p would cost £4.7 billion](https://legacy.policyengine.org/uk/population-impact?basic_rate=19)). A linear extrapolation would therefore produce a £21 billion budgetary estimate from HMRC. ## Poverty @@ -50,4 +50,4 @@ For the income range where this household is eligible for Universal Credit, the ![](https://cdn-images-1.medium.com/max/2628/0*UDmm9O3KZzHHvERV) -To compute more impacts of Sunak’s proposed basic rate cut, [see how it would affect your own household](https://policyengine.org/uk/household?basic_rate=16&baseline_basic_rate=20), or create your own version of this reform, [view the simulation on the PolicyEngine.](https://policyengine.org/uk/population-impact?basic_rate=16&baseline_basic_rate=20) +To compute more impacts of Sunak’s proposed basic rate cut, [see how it would affect your own household](https://legacy.policyengine.org/uk/household?basic_rate=16&baseline_basic_rate=20), or create your own version of this reform, [view the simulation on the PolicyEngine.](https://legacy.policyengine.org/uk/population-impact?basic_rate=16&baseline_basic_rate=20) diff --git a/src/posts/articles/salt-caucus-62k-cap.md b/src/posts/articles/salt-caucus-62k-cap.md index 105bd467c..10ac22bf1 100644 --- a/src/posts/articles/salt-caucus-62k-cap.md +++ b/src/posts/articles/salt-caucus-62k-cap.md @@ -1,4 +1,4 @@ -[In our previous report](https://policyengine.org/us/research/ways-and-means-salt-cap), we simulated the SALT cap set in “The One, Big, Beautiful Bill,” which phases down a $30,000 cap to $10,000 for filers with income above $400,000. While the Ways and Means Committee approved the bill yesterday, [The Hill reports](https://thehill.com/business/5295825-salt-deduction-cap-increase-debate/) that SALT Caucus members have pushed to raise the cap to $62,000 ($124,000 for married filers), adjusted for inflation, unlike the bill. +[In our previous report](https://legacy.policyengine.org/us/research/ways-and-means-salt-cap), we simulated the SALT cap set in “The One, Big, Beautiful Bill,” which phases down a $30,000 cap to $10,000 for filers with income above $400,000. While the Ways and Means Committee approved the bill yesterday, [The Hill reports](https://thehill.com/business/5295825-salt-deduction-cap-increase-debate/) that SALT Caucus members have pushed to raise the cap to $62,000 ($124,000 for married filers), adjusted for inflation, unlike the bill. Utilizing our baseline of the tax reforms in the Ways and Means bill (see Appendix A), we analyze how the SALT Caucus’s proposal would affect American households and the U.S. economy. @@ -12,7 +12,7 @@ Key results (static): - Increases the Gini index of income inequality by 0.2% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps)._ ## Comparison of SALT Caps @@ -30,7 +30,7 @@ Under the SALT Caucus’s preferred limit, single filers could claim up to $62,0 ## Household Impacts -As we are only comparing between the BBB SALT cap and the one preferred by the SALT Caucus, only households that itemize their deductions and have state and local tax expenses greater than the Ways and Means limit would be affected. Let’s examine a similar household to the one we covered in the previous analysis: a single adult in New York making $500,000, but with $70,000 in property taxes (instead of $45,000). Under the BBB SALT cap, they would see a [reduction in their net income of $28,391](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps&household=53440) in 2026, compared to if the SALT deduction became uncapped as it is scheduled to under current law. However, under the SALT Caucus proposal, their net income would [fall by $12,012](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=84172®ion=us&timePeriod=2025&baseline=84050&dataset=enhanced_cps&household=53440), representing a [$16,379 gain](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps&household=53440) when compared to the $30,000 SALT cap approved by the Ways and Means Committee. Figure 2 displays how the single adult’s net income would change as their household earnings vary if the approved SALT cap were replaced with the SALT Caucus proposal. +As we are only comparing between the BBB SALT cap and the one preferred by the SALT Caucus, only households that itemize their deductions and have state and local tax expenses greater than the Ways and Means limit would be affected. Let’s examine a similar household to the one we covered in the previous analysis: a single adult in New York making $500,000, but with $70,000 in property taxes (instead of $45,000). Under the BBB SALT cap, they would see a [reduction in their net income of $28,391](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps&household=53440) in 2026, compared to if the SALT deduction became uncapped as it is scheduled to under current law. However, under the SALT Caucus proposal, their net income would [fall by $12,012](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=84172®ion=us&timePeriod=2025&baseline=84050&dataset=enhanced_cps&household=53440), representing a [$16,379 gain](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps&household=53440) when compared to the $30,000 SALT cap approved by the Ways and Means Committee. Figure 2 displays how the single adult’s net income would change as their household earnings vary if the approved SALT cap were replaced with the SALT Caucus proposal. **Figure 2: Effect of Replacing the SALT Cap on Net Income Based on Household Earnings for a Single Filer with $62,948+ in SALT (2026)** @@ -50,7 +50,7 @@ Due to the removal of the SALT cap phase-out, the total marginal tax rate falls ## Microsimulation Results -Using PolicyEngine’s static microsimulation model, we project that replacing the $30,000 SALT cap with the SALT Caucus proposal would [increase the cost of the tax package by $496.8 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) over the next ten years (2026–2035).[^3] Additionally, because the SALT Caucus proposal goes into effect in 2025, it would [lower federal revenues by $43.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2025&baseline=84050&dataset=enhanced_cps) that year since it raises the current $10,000 cap. +Using PolicyEngine’s static microsimulation model, we project that replacing the $30,000 SALT cap with the SALT Caucus proposal would [increase the cost of the tax package by $496.8 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) over the next ten years (2026–2035).[^3] Additionally, because the SALT Caucus proposal goes into effect in 2025, it would [lower federal revenues by $43.3 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84172®ion=us&timePeriod=2025&baseline=84050&dataset=enhanced_cps) that year since it raises the current $10,000 cap. [^3]: We project that state tax revenues would decrease by $2.9 billion over the budget window (2026-2035). @@ -70,13 +70,13 @@ Using PolicyEngine’s static microsimulation model, we project that replacing t | 2035 | -65.2 | | **2026-2035** | **-496.8** | -The SALT cap would [increase the net income of 3.7% of US residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) in 2026, including 26% of residents in the top decile and 1.2% of those in the bottom nine deciles. +The SALT cap would [increase the net income of 3.7% of US residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) in 2026, including 26% of residents in the top decile and 1.2% of those in the bottom nine deciles. **Figure 6: Winners of the Replacing the SALT Cap Under the W&M Bill (2026)** ![](https://cdn-images-1.medium.com/max/2000/0*myyx97sW6kZ2KS2l) -Households in the top decile see their tax liability fall by [$2,621 on average](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps). The bottom four deciles would see an average gain of $3 or less. +Households in the top decile see their tax liability fall by [$2,621 on average](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps). The bottom four deciles would see an average gain of $3 or less. **Figure 6: Average Impact of the SALT Cap Under the W&M Bill (2026)** @@ -84,19 +84,19 @@ Households in the top decile see their tax liability fall by [$2,621 on average] When it comes to poverty and inequality, the SALT Caucus proposal would, in 2026: -- [Lower poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 0.00006%, +- [Lower poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 0.00006%, -- Reduce deep poverty [by 0.0002%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps), +- Reduce deep poverty [by 0.0002%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps), -- [Raise the Gini index of inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) by 0.2%, and the top 1%’s share of net income by 3.0% +- [Raise the Gini index of inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) by 0.2%, and the top 1%’s share of net income by 3.0% ## Conclusion -Conditional on other provisions in the BBB, we find that implementing the SALT Caucus’s preferred limits of $62,000 and $124,000, compared to the $30,000 cap approved by the committee, would increase the cost of the bill by $497 billion over ten years, assuming no behavioral responses. The new limitation would increase the after-tax incomes of 3.7% of the population in 2026, with households in the top income decile experiencing the largest gains on an [absolute](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) and [relative](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) basis. The SALT Caucus cap is projected to reduce poverty by less than 0.001%, while raising the Gini index by 0.2%. +Conditional on other provisions in the BBB, we find that implementing the SALT Caucus’s preferred limits of $62,000 and $124,000, compared to the $30,000 cap approved by the committee, would increase the cost of the bill by $497 billion over ten years, assuming no behavioral responses. The new limitation would increase the after-tax incomes of 3.7% of the population in 2026, with households in the top income decile experiencing the largest gains on an [absolute](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) and [relative](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=84172®ion=us&timePeriod=2026&baseline=84044&dataset=enhanced_cps) basis. The SALT Caucus cap is projected to reduce poverty by less than 0.001%, while raising the Gini index by 0.2%. As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Baseline Details diff --git a/src/posts/articles/school-vat.md b/src/posts/articles/school-vat.md index d2bdaeff7..b7d49b177 100644 --- a/src/posts/articles/school-vat.md +++ b/src/posts/articles/school-vat.md @@ -1,6 +1,6 @@ ## Key findings -- We estimate a [£1.5 billion](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) revenue increase from Labour's proposal to raise the VAT rate on private schools to 20%. +- We estimate a [£1.5 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) revenue increase from Labour's proposal to raise the VAT rate on private schools to 20%. - Our analysis projects that Labour's proposal to remove tax exemptions from private schools would raise a total of £7.7 billion in tax revenue over the five-year period from FY2025 to FY2029. - We estimate that the Gini index of income inequality would decrease slightly by 0.01% in FY2025. - We also estimate that Labour's plan would lower net income for 3.3% of people. @@ -17,13 +17,13 @@ PolicyEngine's static analysis[^1] of Labour's plan to remove tax exemptions fro The chart presents PolicyEngine's estimates of the effects of Labour's proposed VAT policy on private schools over the next five years. It shows projections for both the raised tax revenue and the percentage of people experiencing lower net income from FY2025 to FY2029. -| Year | Budgetary impact (£ billion) | People affected (%) | -| :--- | :------------------------------------------------------------------------------------------------------------------------------ | :------------------ | -| 2025 | [1.5](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) | 3.3 | -| 2026 | [1.5](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2026&baseline=1) | 3.3 | -| 2027 | [1.5](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2027&baseline=1) | 3.3 | -| 2028 | [1.6](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2028&baseline=1) | 3.4 | -| 2029 | [1.6](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2029&baseline=1) | 3.4 | +| Year | Budgetary impact (£ billion) | People affected (%) | +| :--- | :------------------------------------------------------------------------------------------------------------------------------------- | :------------------ | +| 2025 | [1.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) | 3.3 | +| 2026 | [1.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2026&baseline=1) | 3.3 | +| 2027 | [1.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2027&baseline=1) | 3.3 | +| 2028 | [1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2028&baseline=1) | 3.4 | +| 2029 | [1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2029&baseline=1) | 3.4 | ### Distributional impact diff --git a/src/posts/articles/sep-2025-london-event.md b/src/posts/articles/sep-2025-london-event.md index 90aff1d41..5618f0ace 100644 --- a/src/posts/articles/sep-2025-london-event.md +++ b/src/posts/articles/sep-2025-london-event.md @@ -57,4 +57,4 @@ Space is limited for this exclusive event. [Register now on Eventbrite](https:// ## About PolicyEngine -PolicyEngine is a non-profit organisation building free, open-source software to compute the impact of public policy. Our platform enables anyone to design tax and benefit reforms and see their effects on society and individual households. Learn more at [policyengine.org](https://policyengine.org). +PolicyEngine is a non-profit organisation building free, open-source software to compute the impact of public policy. Our platform enables anyone to design tax and benefit reforms and see their effects on society and individual households. Learn more at [policyengine.org](https://legacy.policyengine.org). diff --git a/src/posts/articles/social-security-tax-exemption.md b/src/posts/articles/social-security-tax-exemption.md index c07c51875..1e5837158 100644 --- a/src/posts/articles/social-security-tax-exemption.md +++ b/src/posts/articles/social-security-tax-exemption.md @@ -8,7 +8,7 @@ Key results (static): - Affects poverty, inequality and labor supply anywhere between 0.02% and 2.3% in 2025, depending on the specific measure. -[_Try our personalized calculator:_](https://policyengine.org/us/household?focus=intro&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2) See how exempting Social Security benefits would affect your household. +[_Try our personalized calculator:_](https://legacy.policyengine.org/us/household?focus=intro&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2) See how exempting Social Security benefits would affect your household. ## How Social Security Benefits are Taxed Today @@ -22,15 +22,15 @@ Calculating the taxation of Social Security benefits for a household involves a In 2023, these taxes comprised [4.3%](https://www.ssa.gov/OACT/TR/2024/tr2024.pdf) and [8.4%](https://www.cms.gov/oact/tr/2024) of the Social Security and Medicare HI Trust Funds, respectively, with payroll taxes comprising 90.3% and 88.4%. -Rather than have all Social Security payments be fully taxable, this structure only makes a portion of the benefits subject to federal income taxes. [The graph below](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=67048®ion=enhanced_us&timePeriod=2025&baseline=2&household=46100) compares the current structure of Social Security benefit taxation (baseline) to a scenario where Social Security benefits are fully taxable (reform) for a single adult with $24,000 in annual payments. +Rather than have all Social Security payments be fully taxable, this structure only makes a portion of the benefits subject to federal income taxes. [The graph below](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=67048®ion=enhanced_us&timePeriod=2025&baseline=2&household=46100) compares the current structure of Social Security benefit taxation (baseline) to a scenario where Social Security benefits are fully taxable (reform) for a single adult with $24,000 in annual payments. ![](https://cdn-images-1.medium.com/max/2000/0*ZDiST4Okq1xEuALf) -As displayed in the graph above, the current structure results in lower-income beneficiaries not being subject to any income tax on their Social Security benefits, with at least 15% of an individual’s benefits remaining non-taxable. In the example above, a single retired adult who receives $2,000 a month from Social Security ([around the average benefit](https://faq.ssa.gov/en-us/Topic/article/KA-01903#:~:text=Views:,most%20convenient%20way%20to%20apply.)) does not face any income taxation as their combined income of $12,000 falls below the $25,000 threshold. This person pays [$705](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=46100) less in taxes compared to if Social Security benefits were fully taxable. A married couple where one spouse also receives $2,000 a month from Social Security but the other continues to work earning $70,000 [saves $432](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=47870) due to the current structure. If they earned $150,000, the household would have a [$792](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=47942) reduction in their income taxes. +As displayed in the graph above, the current structure results in lower-income beneficiaries not being subject to any income tax on their Social Security benefits, with at least 15% of an individual’s benefits remaining non-taxable. In the example above, a single retired adult who receives $2,000 a month from Social Security ([around the average benefit](https://faq.ssa.gov/en-us/Topic/article/KA-01903#:~:text=Views:,most%20convenient%20way%20to%20apply.)) does not face any income taxation as their combined income of $12,000 falls below the $25,000 threshold. This person pays [$705](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=46100) less in taxes compared to if Social Security benefits were fully taxable. A married couple where one spouse also receives $2,000 a month from Social Security but the other continues to work earning $70,000 [saves $432](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=47870) due to the current structure. If they earned $150,000, the household would have a [$792](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=enhanced_us&timePeriod=2025&baseline=67048&household=47942) reduction in their income taxes. ## Household Impacts -Let’s examine the effect of exempting Social Security benefits from taxation on the previous households. Because the single retired adult does not face any taxation under the current structure, making all benefits non-taxable would [leave their net income unchanged](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=46100). However, the family with $70,000 in earnings would [reduce their tax liability by $2,448](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47869), while the household earning $150,000 in addition to their Social Security benefits would [gain $4,488](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942). [The graph below](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942) shows how net income changes for the two married households as their earnings increase assuming Social Security benefits become non-taxable. +Let’s examine the effect of exempting Social Security benefits from taxation on the previous households. Because the single retired adult does not face any taxation under the current structure, making all benefits non-taxable would [leave their net income unchanged](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=46100). However, the family with $70,000 in earnings would [reduce their tax liability by $2,448](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47869), while the household earning $150,000 in addition to their Social Security benefits would [gain $4,488](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942). [The graph below](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942) shows how net income changes for the two married households as their earnings increase assuming Social Security benefits become non-taxable. ![](https://cdn-images-1.medium.com/max/2000/0*ugkw_zWAcbafI0gZ) @@ -46,15 +46,15 @@ Table 1 shows how the net income of the three households would change if Social ## Microsimulation Results -To estimate the effect across the country, we set both the [50% and 85% taxable rates to 0%](https://policyengine.org/us/policy?focus=gov.irs.social_security.taxability.rate.base&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734) in the PolicyEngine web app, thereby eliminating any income taxation on Social Security benefits. The nationwide impact of this proposal using our microsimulation model is as follows: +To estimate the effect across the country, we set both the [50% and 85% taxable rates to 0%](https://legacy.policyengine.org/us/policy?focus=gov.irs.social_security.taxability.rate.base&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734) in the PolicyEngine web app, thereby eliminating any income taxation on Social Security benefits. The nationwide impact of this proposal using our microsimulation model is as follows: ## Budgetary Impact -We at PolicyEngine project making Social Security benefits non-taxable to [cost the federal government $98.9 billion in 2025](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942), assuming no behavioral responses. Additionally, the reform will cost state and local governments $2.9 billion, due to how some states tie their AGI to the federal AGI. When [considering behavioral responses](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=67174®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942) (applying elasticities used by the Congressional Budget Office), the federal cost of the proposal in 2025 falls slightly to $97.8 billion due to a positive substitution effect (workers responding to a lower marginal tax rate), partially offset by a negative income effect; overall work hours and earnings are projected to rise by 0.02% and 0.04%, respectively. +We at PolicyEngine project making Social Security benefits non-taxable to [cost the federal government $98.9 billion in 2025](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942), assuming no behavioral responses. Additionally, the reform will cost state and local governments $2.9 billion, due to how some states tie their AGI to the federal AGI. When [considering behavioral responses](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=67174®ion=enhanced_us&timePeriod=2025&baseline=2&household=47942) (applying elasticities used by the Congressional Budget Office), the federal cost of the proposal in 2025 falls slightly to $97.8 billion due to a positive substitution effect (workers responding to a lower marginal tax rate), partially offset by a negative income effect; overall work hours and earnings are projected to rise by 0.02% and 0.04%, respectively. Over the next ten years (tax years 2025 to 2034), exempting Social Security benefits from income taxation would cost the federal government a total of $1.4 trillion using static modeling. The Medicare HI Trust Fund would see its revenue decrease by $587.7 billion, while the Social Security Trust Funds would lose the remaining $834.9 billion.[^trust-fund-split] Eliminating income taxes on Social Security benefits would [increase Social Security’s shortfall and put Medicare HI into a deficit](https://www.ssa.gov/OACT/TRSUM/index.html), thus accelerating each of their trust funds’ insolvency dates; for instance, the $40.8 billion impact on the Medicaid HI Trust Fund in 2025 exceeds the $25 billion projected surplus for 2024. -[^trust-fund-split]: To calculate the revenue loss of each trust fund, we first set the additional taxable rate for Social Security benefits [from 85% to 50%](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67180®ion=enhanced_us&timePeriod=2025&baseline=2). This change simulates the revenue lost for the Medicare HI Trust Fund. We then subtracted this amount from the total federal revenue loss to calculate the impact on the Social Security Trust Funds. See the [Social Security](https://www.ssa.gov/OACT/TR/2024/tr2024.pdf) and [Medicare HI](https://www.cms.gov/oact/tr/2024) Trust Fund reports for benchmarks. +[^trust-fund-split]: To calculate the revenue loss of each trust fund, we first set the additional taxable rate for Social Security benefits [from 85% to 50%](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=67180®ion=enhanced_us&timePeriod=2025&baseline=2). This change simulates the revenue lost for the Medicare HI Trust Fund. We then subtracted this amount from the total federal revenue loss to calculate the impact on the Social Security Trust Funds. See the [Social Security](https://www.ssa.gov/OACT/TR/2024/tr2024.pdf) and [Medicare HI](https://www.cms.gov/oact/tr/2024) Trust Fund reports for benchmarks. **Table 2: Annual Federal Budgetary Impact for Exempting Social Security Benefits from Income Tax** @@ -94,10 +94,10 @@ The average benefit for all households is $670 for 2025. However, the ninth and ![](https://cdn-images-1.medium.com/max/2000/0*cUWrmb9Nfu3HZmml) -Exempting Social Security benefits from income taxes would reduce the overall Supplemental Poverty Measure by [0.2%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734) and lower senior poverty by 2.3%. Finally, the effect on income inequality would be mixed, as the proposal would [increase the Gini index by 0.1%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734), raise the top decile’s net income share by 1.3% but reduce the top percentile’s share of net income by 0.2%. +Exempting Social Security benefits from income taxes would reduce the overall Supplemental Poverty Measure by [0.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734) and lower senior poverty by 2.3%. Finally, the effect on income inequality would be mixed, as the proposal would [increase the Gini index by 0.1%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=67049®ion=enhanced_us&timePeriod=2025&baseline=2&household=47734), raise the top decile’s net income share by 1.3% but reduce the top percentile’s share of net income by 0.2%. ## Conclusion Exempting Social Security benefits from taxation would increase the net income of American households while reducing revenues by $1.4 trillion over the next ten years, accelerating the insolvency dates of the Social Security and Medicare Trust Funds. While the reform’s dollar impact rises with income, only 1.6% of the tax benefits would accrue to the bottom two deciles while 45.5% of the benefits would flow to the top 20% of households. The proposal would impact poverty, inequality and labor supply, overall affecting any of the relevant measures by 2.3% or less. -As policymakers consider this proposal and others, tools like PolicyEngine can provide valuable insights into the potential impacts on various household compositions and the greater economy. We invite you to read [additional analyses](https://policyengine.org/us/research) from our contributors and use [PolicyEngine](https://policyengine.org/us) to calculate your taxes/benefits and design your own policy reforms. +As policymakers consider this proposal and others, tools like PolicyEngine can provide valuable insights into the potential impacts on various household compositions and the greater economy. We invite you to read [additional analyses](https://legacy.policyengine.org/us/research) from our contributors and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your taxes/benefits and design your own policy reforms. diff --git a/src/posts/articles/spring-budget-2024.ipynb b/src/posts/articles/spring-budget-2024.ipynb index 656f2f24c..03e8247d3 100644 --- a/src/posts/articles/spring-budget-2024.ipynb +++ b/src/posts/articles/spring-budget-2024.ipynb @@ -4,7 +4,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "On Wednesday, 6th March, Chancellor of the Exchequer Jeremy Hunt will present the government's 2024 Spring Budget. Ahead of the announcement, media reports speculate that the Chancellor is considering cutting the main National Insurance rate, in an extension to his previous cuts in the Autumn Statement 2023 (analysed by PolicyEngine in [this report](https://policyengine.org/uk/research/autumn-statement-2023)).\n", + "On Wednesday, 6th March, Chancellor of the Exchequer Jeremy Hunt will present the government's 2024 Spring Budget. Ahead of the announcement, media reports speculate that the Chancellor is considering cutting the main National Insurance rate, in an extension to his previous cuts in the Autumn Statement 2023 (analysed by PolicyEngine in [this report](https://legacy.policyengine.org/uk/research/autumn-statement-2023)).\n", "\n", "In this post, we'll estimate the impacts of such a cut upon the budget, as well as upon society-wide economic outcomes. We'll also look at the impact these changes would have upon individual UK households.\n", "\n", @@ -204,7 +204,7 @@ " lambda x: f\"{x/1e9:+,.1f}\"\n", ")\n", "df[\"PolicyEngine\"] = df[\"PolicyEngine\"].apply(\n", - " lambda x: f\"[#{x}](https://policyengine.org/uk/policy?reform={x}&baseline=1&time_period=2024®ion=uk)\"\n", + " lambda x: f\"[#{x}](https://legacy.policyengine.org/uk/policy?reform={x}&baseline=1&time_period=2024®ion=uk)\"\n", ")\n", "df[\"Percent gaining\"] = df[\"Percent gaining\"].apply(lambda x: f\"{x:+.1%}\")\n", "df[\"Poverty change\"] = df[\"Poverty change\"].apply(lambda x: f\"{x:+.1%}\")\n", @@ -221,9 +221,9 @@ "text/markdown": [ "| Reform | Budgetary impact | Percent gaining | Poverty change | Inequality change | PolicyEngine |\n", "|:------------------|-------------------:|:------------------|:-----------------|:--------------------|:------------------------------------------------------------------------------------------------|\n", - "| 1p NI cut | -5 | +63.8% | +0.0% | +0.2% | [#49642](https://policyengine.org/uk/policy?reform=49642&baseline=1&time_period=2024®ion=uk) |\n", - "| 2p NI cut | -10 | +63.8% | -0.3% | +0.3% | [#49643](https://policyengine.org/uk/policy?reform=49643&baseline=1&time_period=2024®ion=uk) |\n", - "| 2p basic rate cut | -11.1 | +69.8% | -0.4% | +0.3% | [#49644](https://policyengine.org/uk/policy?reform=49644&baseline=1&time_period=2024®ion=uk) |" + "| 1p NI cut | -5 | +63.8% | +0.0% | +0.2% | [#49642](https://legacy.policyengine.org/uk/policy?reform=49642&baseline=1&time_period=2024®ion=uk) |\n", + "| 2p NI cut | -10 | +63.8% | -0.3% | +0.3% | [#49643](https://legacy.policyengine.org/uk/policy?reform=49643&baseline=1&time_period=2024®ion=uk) |\n", + "| 2p basic rate cut | -11.1 | +69.8% | -0.4% | +0.3% | [#49644](https://legacy.policyengine.org/uk/policy?reform=49644&baseline=1&time_period=2024®ion=uk) |" ], "text/plain": [ "" diff --git a/src/posts/articles/stamp-duties-in-policyengine-uk.md b/src/posts/articles/stamp-duties-in-policyengine-uk.md index e27ae6157..12e1cf7e9 100644 --- a/src/posts/articles/stamp-duties-in-policyengine-uk.md +++ b/src/posts/articles/stamp-duties-in-policyengine-uk.md @@ -23,13 +23,13 @@ Any! We’ve added switches to abolish each of the three Stamp Duty policies, as Here are some examples of Stamp Duty reforms you can compute in PolicyEngine: - [Repeal all three policies - ](https://policyengine.org/uk/population-impact?abolish_sdlt=1&abolish_ltt=1&abolish_lbtt=1)£16.2 billion cost in 2022 + ](https://legacy.policyengine.org/uk/population-impact?abolish_sdlt=1&abolish_ltt=1&abolish_lbtt=1)£16.2 billion cost in 2022 - [Double Stamp Duty’s first home value exemption from £500,000 to £1,000,000 - ](https://policyengine.org/uk/population-impact?sdlt_first_time_buyer_value_limit=1000000)£95 million cost in 2022 + ](https://legacy.policyengine.org/uk/population-impact?sdlt_first_time_buyer_value_limit=1000000)£95 million cost in 2022 - [Set the rate to a flat 2% on-first primary homes - ](https://policyengine.org/uk/population-impact?abolish_lbtt=1&sdlt_on_non_first_home_1_rate=2&sdlt_on_non_first_home_3_rate=2&sdlt_on_non_first_home_4_rate=2&sdlt_on_non_first_home_5_rate=2<t_on_secondary_residences_1_rate=2<t_on_secondary_residences_2_rate=2<t_on_secondary_residences_3_rate=2<t_on_secondary_residences_4_rate=2<t_on_secondary_residences_5_rate=2<t_on_secondary_residences_6_rate=2&lbtt_on_residential_property_1_rate=2&lbtt_on_residential_property_3_rate=2&lbtt_on_residential_property_4_rate=2&lbtt_on_residential_property_5_rate=2)£3.7 billion cost in 2022 + ](https://legacy.policyengine.org/uk/population-impact?abolish_lbtt=1&sdlt_on_non_first_home_1_rate=2&sdlt_on_non_first_home_3_rate=2&sdlt_on_non_first_home_4_rate=2&sdlt_on_non_first_home_5_rate=2<t_on_secondary_residences_1_rate=2<t_on_secondary_residences_2_rate=2<t_on_secondary_residences_3_rate=2<t_on_secondary_residences_4_rate=2<t_on_secondary_residences_5_rate=2<t_on_secondary_residences_6_rate=2&lbtt_on_residential_property_1_rate=2&lbtt_on_residential_property_3_rate=2&lbtt_on_residential_property_4_rate=2&lbtt_on_residential_property_5_rate=2)£3.7 billion cost in 2022 ## Exploring the results diff --git a/src/posts/articles/state-tax-model-beta.md b/src/posts/articles/state-tax-model-beta.md index 028162ac4..41d40d091 100644 --- a/src/posts/articles/state-tax-model-beta.md +++ b/src/posts/articles/state-tax-model-beta.md @@ -22,9 +22,9 @@ This launch represents a critical step towards our full launch later this year, [^1]: Currently, for the purposes of the SALT deduction and baseline net income in US simulations, we use state income tax as the Census Bureau calculates it from the Current Population Survey March Supplement, indexed for inflation. -Looking ahead, we also aspire to extend our [recently beta-launched microdata enhancement](https://policyengine.org/us/research/enhanced-cps-beta) to the state level, further improving the accuracy of state impact estimates for both state and federal reforms. We are actively seeking financial support to make this vision a reality. +Looking ahead, we also aspire to extend our [recently beta-launched microdata enhancement](https://legacy.policyengine.org/us/research/enhanced-cps-beta) to the state level, further improving the accuracy of state impact estimates for both state and federal reforms. We are actively seeking financial support to make this vision a reality. -To see examples of how to make the most of these new features, check out our state-specific launch posts for [New Mexico](https://policyengine.org/us/research/new-mexico-income-tax-launch), [Utah](https://policyengine.org/us/research/introducing-utah-state-income-tax-analysis-on-policyengine), [California](https://policyengine.org/us/research/california-income-tax), [Kansas](https://policyengine.org/us/research/kansas-income-tax), [New York](https://policyengine.org/us/research/policyengine-launches-in-new-york-state), and [Washington](https://policyengine.org/us/research/policyengine-launches-in-washington-state). +To see examples of how to make the most of these new features, check out our state-specific launch posts for [New Mexico](https://legacy.policyengine.org/us/research/new-mexico-income-tax-launch), [Utah](https://legacy.policyengine.org/us/research/introducing-utah-state-income-tax-analysis-on-policyengine), [California](https://legacy.policyengine.org/us/research/california-income-tax), [Kansas](https://legacy.policyengine.org/us/research/kansas-income-tax), [New York](https://legacy.policyengine.org/us/research/policyengine-launches-in-new-york-state), and [Washington](https://legacy.policyengine.org/us/research/policyengine-launches-in-washington-state). At PolicyEngine, we remain committed to setting new standards in policy simulations and evidence-based policymaking. By providing a powerful, transparent, and accessible platform for public policy analysis, we aim to empower policymakers, researchers, advocates, and the general public to better understand the impacts of tax and benefit policies. diff --git a/src/posts/articles/tax-cuts-for-workers-act.ipynb b/src/posts/articles/tax-cuts-for-workers-act.ipynb index 008a63668..06a94ba39 100644 --- a/src/posts/articles/tax-cuts-for-workers-act.ipynb +++ b/src/posts/articles/tax-cuts-for-workers-act.ipynb @@ -6,7 +6,7 @@ "source": [ "On April 9th, Senators Catherine Cortez Masto (NV-D) and Michael Bennet (CO-D) [introduced](https://www.cortezmasto.senate.gov/news/press-releases/cortez-masto-colleagues-introduce-bill-to-cut-taxes-for-working-americans/) the [Tax Cuts for Workers Act](https://www.cortezmasto.senate.gov/wp-content/uploads/2025/04/OTT25089.pdf), a bill that expands the Earned Income Tax Credit (EITC) for filers without qualifying children. This report describes the reform, illustrates the impact for a hypothetical household, and summarizes the nationwide impact using the PolicyEngine microsimulation model.\n", "\n", - "[See how the TCWA affects your household here.](https://policyengine.org/us/household?reform=81471&focus=intro®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps)" + "[See how the TCWA affects your household here.](https://legacy.policyengine.org/us/household?reform=81471&focus=intro®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps)" ] }, { @@ -44,7 +44,7 @@ "\n", "While the US provides the EITC to filers with and without qualifying children, it limits eligibility and reduces the amount for those without children. Such filers must be between ages 25 and 65, and the credit phases in at 7.65% of earnings until earnings reach $4,220 (in 2026). At $10,840 of adjusted gross income ($18,100 for joint filers), the credit is reduced with 7.65% of AGI.\n", "\n", - "In 2021, the US passed the American Rescue Plan Act (ARPA), which included an expansion to the EITC for filers without qualifying children. ARPA lowered the minimum age to 19 (24 for eligible students) and removed the maximum age. It also doubled the phase-in and phase-out rates to 15.3%, while increasing the earnings and AGI levels that governed the credit, thereby increasing the maximum credit value. It did not adjust the “married filing joint bonus”, an additional AGI level for joint filers before the credit starts phasing out. Read our report on the ARPA EITC [here](https://policyengine.org/us/research/restoring-arpa-eitc).\n", + "In 2021, the US passed the American Rescue Plan Act (ARPA), which included an expansion to the EITC for filers without qualifying children. ARPA lowered the minimum age to 19 (24 for eligible students) and removed the maximum age. It also doubled the phase-in and phase-out rates to 15.3%, while increasing the earnings and AGI levels that governed the credit, thereby increasing the maximum credit value. It did not adjust the “married filing joint bonus”, an additional AGI level for joint filers before the credit starts phasing out. Read our report on the ARPA EITC [here](https://legacy.policyengine.org/us/research/restoring-arpa-eitc).\n", "\n", "The TCWA restores ARPA’s EITC changes, while setting the dollar figures to their 2021 values starting in 2026 (rather than the values they would have been if ARPA were made permanent, due to inflation adjustments). Table 1 displays these parameter values under current law and TCWA as of 2026.\n" ] @@ -1972,9 +1972,9 @@ "source": [ "## Household impacts\n", "\n", - "Consider a married couple without qualifying children, residing in Colorado and earning $6,000 in 2026. The TCWA increases their net income by [$574](https://policyengine.org/us/household?reform=81471&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574), due to increased federal and Colorado EITC amounts of $459 and $115 respectively. \n", + "Consider a married couple without qualifying children, residing in Colorado and earning $6,000 in 2026. The TCWA increases their net income by [$574](https://legacy.policyengine.org/us/household?reform=81471&focus=householdOutput.netIncome®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574), due to increased federal and Colorado EITC amounts of $459 and $115 respectively. \n", "\n", - "Looking at the [net income distribution](https://policyengine.org/us/household?reform=81471&focus=householdOutput.earnings®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574) for this household, we see that the couple will experience an increase in net income until earnings of $29,000, where the federal EITC is fully phased-out under the TCWA. The maximum net income increase occurs between earnings of $10,000 and $19,000 with a spike at $18,000, due to the higher phase-out start." + "Looking at the [net income distribution](https://legacy.policyengine.org/us/household?reform=81471&focus=householdOutput.earnings®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574) for this household, we see that the couple will experience an increase in net income until earnings of $29,000, where the federal EITC is fully phased-out under the TCWA. The maximum net income increase occurs between earnings of $10,000 and $19,000 with a spike at $18,000, due to the higher phase-out start." ] }, { @@ -2486,7 +2486,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "These changes in the Earned Income Tax Credit [alter marginal tax rates](https://policyengine.org/us/household?reform=81471&focus=householdOutput.mtr®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574) from between -18 and +19 percentage points. " + "These changes in the Earned Income Tax Credit [alter marginal tax rates](https://legacy.policyengine.org/us/household?reform=81471&focus=householdOutput.mtr®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps&household=52574) from between -18 and +19 percentage points. " ] }, { @@ -2979,11 +2979,11 @@ "source": [ "## National impacts\n", "\n", - "To estimate the economic effects, we apply the PolicyEngine US 1.247.0 microsimulation model and our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). \n", + "To estimate the economic effects, we apply the PolicyEngine US 1.247.0 microsimulation model and our [Enhanced Current Population Survey](https://legacy.policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). \n", "\n", "### Budgetary impacts\n", "\n", - "Over the 2026-35 budget window, and assuming no behavioral responses, the reform would cost the federal government $65.4 billion, with costs decreasing from [$7.0 billion](https://policyengine.org/us/policy?reform=81471&focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) in 2026 to $6.1 billion in 2035." + "Over the 2026-35 budget window, and assuming no behavioral responses, the reform would cost the federal government $65.4 billion, with costs decreasing from [$7.0 billion](https://legacy.policyengine.org/us/policy?reform=81471&focus=policyOutput.budgetaryImpact.overall®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) in 2026 to $6.1 billion in 2035." ] }, { @@ -3069,7 +3069,7 @@ "\n", "Here we report various distributional impacts for 2026, assuming no behavioral responses. These account for mechanical state and local tax impacts due to EITC matches, which we project at $1.5 billion for 2026 (in addition to the $7.0 billion federal cost).\n", "\n", - "The TCWA would [increase the net income](https://policyengine.org/us/policy?reform=81471&focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) of 10% of the population, with those in the eighth decile most likely to experience an increase in household income (26%). Nobody’s net income falls." + "The TCWA would [increase the net income](https://legacy.policyengine.org/us/policy?reform=81471&focus=policyOutput.winnersAndLosers.incomeDecile®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) of 10% of the population, with those in the eighth decile most likely to experience an increase in household income (26%). Nobody’s net income falls." ] }, { @@ -3418,7 +3418,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "The TCWA would increase the [net income of households by $59](https://policyengine.org/us/policy?reform=81471&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps), with the largest increase in the first ($95) and second income deciles ($91). Households in upper income deciles still benefit as they can include multiple tax units.\n" + "The TCWA would increase the [net income of households by $59](https://legacy.policyengine.org/us/policy?reform=81471&focus=policyOutput.distributionalImpact.incomeDecile.average®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps), with the largest increase in the first ($95) and second income deciles ($91). Households in upper income deciles still benefit as they can include multiple tax units.\n" ] }, { @@ -3519,7 +3519,7 @@ "source": [ "### Poverty and inequality impacts\n", "\n", - "Our analysis finds that the TCWA would [reduce the poverty rate](https://policyengine.org/us/policy?reform=81471&focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) by 0.3% (0.1 percentage point reduction in the Supplemental Poverty Measure) in 2026, disproportionately among adults aged 18-64 (0.4%)." + "Our analysis finds that the TCWA would [reduce the poverty rate](https://legacy.policyengine.org/us/policy?reform=81471&focus=policyOutput.povertyImpact.regular.byAge®ion=us&timePeriod=2026&baseline=2&dataset=enhanced_cps) by 0.3% (0.1 percentage point reduction in the Supplemental Poverty Measure) in 2026, disproportionately among adults aged 18-64 (0.4%)." ] }, { @@ -3531,7 +3531,7 @@ "\n", "The Tax Cuts for Workers Act would cost the federal government $65.4 billion over the 2026-35 budget window, assuming no behavioral responses. Accounting for state and local tax impacts, which add 21% to the aggregate impact beyond the federal taxes, it increases net income for 10% of the population, with an average household increase of $59 ($590 per affected household). Households in the first and second income deciles would see the largest benefits ($95 and $91 respectively). The TCWA is projected to reduce poverty by 0.3% and the Gini index of income inequality by 0.05%.\n", "\n", - "We invite readers to explore this reform and others in the [PolicyEngine app](http://policyengine.org).\n" + "We invite readers to explore this reform and others in the [PolicyEngine app](http://legacy.policyengine.org).\n" ] } ], diff --git a/src/posts/articles/tax-cuts-in-prime-minister-trusss-growth-plan.md b/src/posts/articles/tax-cuts-in-prime-minister-trusss-growth-plan.md index 35c1d1dd5..2f957002b 100644 --- a/src/posts/articles/tax-cuts-in-prime-minister-trusss-growth-plan.md +++ b/src/posts/articles/tax-cuts-in-prime-minister-trusss-growth-plan.md @@ -16,7 +16,7 @@ Earlier today, UK Chancellor Kwasi Kwarteng announced the [Growth Plan 2022](htt [As we wrote yesterday](https://blog.policyengine.org/stamp-duties-in-policyengine-uk-6087dc05c135), PolicyEngine fuses property values across government surveys to provide the UK’s only publicly available model of stamp duties. Our unified, enhanced dataset and model allows us to score the Growth Plan’s Stamp Duty reforms alongside the Income Tax and National Insurance reforms, which we did [within minutes of its announcement](https://twitter.com/nikhil_woodruff/status/1573235941053026305) on Twitter. -**You can [see the population impact of the package here](https://policyengine.org/uk/population-impact?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40) and [compute the impact on your own household here](https://policyengine.org/uk/household?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40).** We’ve provided top-level results below. +**You can [see the population impact of the package here](https://legacy.policyengine.org/uk/population-impact?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40) and [compute the impact on your own household here](https://legacy.policyengine.org/uk/household?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40).** We’ve provided top-level results below. ## Impact on the UK population @@ -34,7 +34,7 @@ The policy has a larger net income benefit to those in higher income, both in re ![](https://cdn-images-1.medium.com/max/3200/0*K6sPZQEFXrGUDLLn) -[\*\*Explore more population-level charts in PolicyEngine here.](https://policyengine.org/uk/population-impact?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40)\*\* +[\*\*Explore more population-level charts in PolicyEngine here.](https://legacy.policyengine.org/uk/population-impact?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40)\*\* ## Impact on hypothetical households @@ -60,10 +60,10 @@ Their marginal tax rate falls less in the Universal Credit taper zone, by about ![](https://cdn-images-1.medium.com/max/2576/0*rBTcqEAVkIAKhnRz) -[\*\*Compute how the reform would affect your own household here.](https://policyengine.org/uk/household?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40)\*\* +[\*\*Compute how the reform would affect your own household here.](https://legacy.policyengine.org/uk/household?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40)\*\* ## Be your own Chancellor -As always, you can also [experiment with a custom reform alongside Growth Plan 2022](https://policyengine.org/uk/policy?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40). If you’d prefer an alternative reform, how would you design it? Compute the impact in PolicyEngine and [let us know](http://twitter.com/thepolicyengine)! +As always, you can also [experiment with a custom reform alongside Growth Plan 2022](https://legacy.policyengine.org/uk/policy?dividend_basic_rate=7_5÷nd_higher_rate=32_5&NI_add_rate=2&NI_class_4_add_rate=2&NI_main_rate=12&NI_class_4_main_rate=9÷nd_additional_rate=38_1&basic_rate=19&sdlt_on_non_first_home_2_rate=0&sdlt_first_time_buyer_value_limit=625000&sdlt_on_first_time_buyer_homes_2_threshold=425000&add_rate=40). If you’d prefer an alternative reform, how would you design it? Compute the impact in PolicyEngine and [let us know](http://twitter.com/thepolicyengine)! ![Labour Income Tax reforms under the Growth Plan 2022](https://cdn-images-1.medium.com/max/3200/0*4yqZPnpAmiRqYiUe)_Labour Income Tax reforms under the Growth Plan 2022_ diff --git a/src/posts/articles/tcja-extension.md b/src/posts/articles/tcja-extension.md index d4fdec8d1..a86797f06 100644 --- a/src/posts/articles/tcja-extension.md +++ b/src/posts/articles/tcja-extension.md @@ -10,7 +10,7 @@ Key results: - Increase hours worked and earnings by 0.71% and 0.78%, respectively when applying CBO elasticities. -[_Try our personalized calculator:_](https://policyengine.org/us/household?focus=intro&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2) See how extending the TCJA would affect your household. +[_Try our personalized calculator:_](https://legacy.policyengine.org/us/household?focus=intro&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2) See how extending the TCJA would affect your household. ## What did the TCJA change? @@ -68,7 +68,7 @@ Beyond these individual provisions, the TCJA permanently reduced the top corpora _Starred parameters indexed to inflation._ -[Our simulations](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) include every listed provision except the mortgage interest deduction and estate tax exemption.[^2] +[Our simulations](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) include every listed provision except the mortgage interest deduction and estate tax exemption.[^2] [^2]: PolicyEngine's US model is currently unable to evaluate the impact of the mortgage interest deduction or estate tax. Based on external analysis, the revenue gained from limiting the mortgage interest deduction partially offsets the revenue lost from doubling the estate tax exemption, suggesting our budgetary projections remain fairly accurate. Nevertheless, including these provisions in a TCJA extension would affect the distributional analysis for households subject to either or both policies. @@ -78,13 +78,13 @@ Extending the TCJA will affect households differently depending on their size, i **Table 2: Change in Net Income Based on Household Composition** -| Marital status | Children | Earnings | Change in Net Income | -| -------------- | -------- | ---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | -| Single | 0 | $15,000 | [$140](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48802) | -| Single | 1 | $30,000 | [$1,020](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=47295) | -| Married | 1 | $70,000 | [$1,170](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48807) | -| Married | 2 | $150,000 | [$5,055](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) | -| Married | 3 | $1,000,000 | [$33,053](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) | +| Marital status | Children | Earnings | Change in Net Income | +| -------------- | -------- | ---------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | +| Single | 0 | $15,000 | [$140](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48802) | +| Single | 1 | $30,000 | [$1,020](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=47295) | +| Married | 1 | $70,000 | [$1,170](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48807) | +| Married | 2 | $150,000 | [$5,055](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) | +| Married | 3 | $1,000,000 | [$33,053](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) | While taxes do not always decrease monotonically with income (see Appendix A), each household with a higher income net benefits more than another family with a lower income in these examples. This can be mainly attributed to the TCJA's lower income tax rates. Families with children see additional benefits from the expanded CTC, provided their income falls below the phase-out threshold. High-earning families experience the largest gains, as demonstrated in the final example, where their change in net income substantially exceeds other households shown in the table. Figure 1 displays the change in net income based on household income for the family composition in the fourth example. @@ -94,7 +94,7 @@ While taxes do not always decrease monotonically with income (see Appendix A), e ## Federal Budgetary Impact -Extending the TCJA would reduce federal revenues by [$4.2 trillion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) over ten years using static modeling. [When considering behavioral effects](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=69005®ion=enhanced_us&timePeriod=2026&baseline=2) (applying CBO elasticities), earnings rise 0.78%, in turn lowering the cost by 7.7% to $3.9 trillion; these effects primarily occur through the substitution effect (people working more as their marginal tax rate falls), partly offset by the income effect (people working less as they have a higher net income). The Congressional Budget Office (CBO) [currently projects](https://www.cbo.gov/publication/59710) federal deficits to total $20 trillion from 2025-2034; extending the TCJA's individual provisions, without any offsets, would thus raise deficits by roughly 20% over a decade. +Extending the TCJA would reduce federal revenues by [$4.2 trillion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48812) over ten years using static modeling. [When considering behavioral effects](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=69005®ion=enhanced_us&timePeriod=2026&baseline=2) (applying CBO elasticities), earnings rise 0.78%, in turn lowering the cost by 7.7% to $3.9 trillion; these effects primarily occur through the substitution effect (people working more as their marginal tax rate falls), partly offset by the income effect (people working less as they have a higher net income). The Congressional Budget Office (CBO) [currently projects](https://www.cbo.gov/publication/59710) federal deficits to total $20 trillion from 2025-2034; extending the TCJA's individual provisions, without any offsets, would thus raise deficits by roughly 20% over a decade. **Table 3: TCJA Federal Budgetary Impact (in billions $)** @@ -136,15 +136,15 @@ The CBO, using estimates from the Joint Committee on Taxation, projects costs 0. ## Income Distribution 2026 -Extending the TCJA would [benefit 80% of the U.S. population](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) while reducing the net income for 2% of Americans. More households in the top half of the income distribution would benefit than in the bottom half. +Extending the TCJA would [benefit 80% of the U.S. population](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) while reducing the net income for 2% of Americans. More households in the top half of the income distribution would benefit than in the bottom half. ![](https://cdn-images-1.medium.com/max/2000/0*wUuFzDjWkuLS3FRf) -In 2026, the [average household benefit](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2) when extending the TCJA is $2,338. However, the top two income deciles would receive a larger benefit as their net income would rise by $5,063 and $9,194, respectively. Conversely, on average, the bottom two deciles would see their taxes reduced by $311 or less. +In 2026, the [average household benefit](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2) when extending the TCJA is $2,338. However, the top two income deciles would receive a larger benefit as their net income would rise by $5,063 and $9,194, respectively. Conversely, on average, the bottom two deciles would see their taxes reduced by $311 or less. ![](https://cdn-images-1.medium.com/max/2000/0*vb67YpfvKS_YoCf7) -Extending the TCJA would also [reduce the Supplemental Poverty Measure](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) by 4.1% and the Supplemental Child Poverty Measure by 7.0%. +Extending the TCJA would also [reduce the Supplemental Poverty Measure](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=48809) by 4.1% and the Supplemental Child Poverty Measure by 7.0%. ![](https://cdn-images-1.medium.com/max/2000/0*ThsBUfxd5XSPzEqa) @@ -154,7 +154,7 @@ Extending the individual provisions of the TCJA would reduce federal revenues by As policymakers evaluate options for addressing these expiring provisions, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Explanation for non-monotonic impacts for a joint filer with two children @@ -170,7 +170,7 @@ Both ranges occur for similar reasons, namely the interaction between standard d To illustrate this nonmonotonicity, we calculate the effect at both ends of the range. -[At $34,600:](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49119) +[At $34,600:](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49119) Under a TCJA extension, the household has $4,000 in taxable income ($34,600 of earnings - $30,600 of their standard deduction). This translates to a $400 tax liability as their taxable income falls into the 10% tax bracket. The household's tax liability is fully offset by CTC as they receive their household maximum of $4,000. $400 is used to offset their tax liability while the remaining $3,600 is refunded to the household. @@ -178,7 +178,7 @@ Under current law, the household has no taxable income (household earnings of $3 Therefore the net benefit of extending the TCJA for this household would be $1,600 ($3,600-$2,000). -[At $37,800:](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49120) +[At $37,800:](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49120) Under a TCJA extension, the household would have $7,200 in taxable income ($37,800 of earnings - $30,600 of their standard deduction). This results in a $720 tax liability as their taxable income is solely in the 10% tax bracket. The tax liability is fully offset by CTC as they receive the maximum of $4,000. $720 is used to offset their tax liability while the remaining $3,280 is refunded to the household. @@ -192,7 +192,7 @@ The declining benefit ($1,600 -> $1,280) occurs because the TCJA's standard dedu At this income range, we see another decline in TCJA benefits due to the interaction between tax brackets and the CTC. -[At $54,850:](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49121) +[At $54,850:](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49121) Under a TCJA extension, the household has $24,250 in taxable income ($54,850 of earnings - $30,600 standard deduction). This results in a $2,425 tax liability as their taxable income falls entirely in the 10% tax bracket. The household's tax liability is fully offset by CTC as they receive their household maximum of $4,000. $2,425 is used to offset their tax liability while the remaining $1,575 is refunded to the household. @@ -200,7 +200,7 @@ Under current law, the household has $17,050 in taxable income ($54,850 of earni Therefore the net benefit of extending the TCJA for this household would be $1,280 ($1,575-$295). -[At $62,050:](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49127) +[At $62,050:](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69001®ion=enhanced_us&timePeriod=2026&baseline=2&household=49127) Under a TCJA extension, the household has $31,450 in taxable income ($62,050 of earnings - $30,600 standard deduction). This results in a $3,289 tax liability, with the first $24,250 taxed at 10% ($2,425) and the next $7,200 taxed at 12% ($864). The household's tax liability is fully offset by CTC as they receive their household maximum of $4,000. $3,289 is used to offset their tax liability while the remaining $711 is refunded to the household. diff --git a/src/posts/articles/the-child-tax-credit-in-2023.md b/src/posts/articles/the-child-tax-credit-in-2023.md index c8fc8c071..befeb5a88 100644 --- a/src/posts/articles/the-child-tax-credit-in-2023.md +++ b/src/posts/articles/the-child-tax-credit-in-2023.md @@ -32,54 +32,54 @@ Other than ARPA, the CTC structure has not changed since 2018, aside from some p ## How does the Child Tax Credit affect individual households? -We can compute the impact of the Child Tax Credit in PolicyEngine by first [abolishing the Child Tax Credit](https://policyengine.org/us/policy?focus=gov.abolitions.ctc&reform=3318®ion=us&timePeriod=2023&baseline=3318), and then swapping the baseline and reform. This tells us the impact of introducing the CTC compared to a baseline where it doesn’t exist, and we can use it for both individual and society-wide analysis. +We can compute the impact of the Child Tax Credit in PolicyEngine by first [abolishing the Child Tax Credit](https://legacy.policyengine.org/us/policy?focus=gov.abolitions.ctc&reform=3318®ion=us&timePeriod=2023&baseline=3318), and then swapping the baseline and reform. This tells us the impact of introducing the CTC compared to a baseline where it doesn’t exist, and we can use it for both individual and society-wide analysis. -Consider a [married filer with one child and $250,000 wages](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) in 2023. They would receive the full $2,000 CTC. +Consider a [married filer with one child and $250,000 wages](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) in 2023. They would receive the full $2,000 CTC. -If we [vary their earnings](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), we can see how the partial refundability effectively phases the CTC in with income, and how it phases out with income as well. +If we [vary their earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), we can see how the partial refundability effectively phases the CTC in with income, and how it phases out with income as well. ![](https://cdn-images-1.medium.com/max/2836/0*KLgJ76doY6WE95Lt) -Correspondingly, the [CTC lowers this filer’s marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) in the phase-in earnings region, and raises marginal tax rates in the phase-out region. +Correspondingly, the [CTC lowers this filer’s marginal tax rates](https://legacy.policyengine.org/us/household?focus=householdOutput.mtr&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) in the phase-in earnings region, and raises marginal tax rates in the phase-out region. ![](https://cdn-images-1.medium.com/max/3200/0*MYcUq_rSgMsHu1o9) -To see how the Child Tax Credit affects your own finances and work incentives, [enter your own household information](https://policyengine.org/us/household?focus=intro®ion=us&timePeriod=2023&baseline=3318&reform=2) and PolicyEngine will produce these personalized analytics. +To see how the Child Tax Credit affects your own finances and work incentives, [enter your own household information](https://legacy.policyengine.org/us/household?focus=intro®ion=us&timePeriod=2023&baseline=3318&reform=2) and PolicyEngine will produce these personalized analytics. ## How does the Child Tax Credit impact society? We can compute the impact of the Child Tax Credit in PolicyEngine by first abolishing the Child Tax Credit, and then swapping the baseline and reform. This tells us the impact of introducing the CTC compared to a baseline where it doesn’t exist. I showed how to design it below, but you can skip to the impact [here](http://localhost:3000/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=3318). -In 2023, we estimate that the [Child Tax Credit costs $109.9 billion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=3318). As context, the Tax Policy Center estimated in September 2021 that the CTC would cost [$126.3 billion in calendar year 2023](https://www.taxpolicycenter.org/model-estimates/tax-benefits-child-tax-credit-september-2021/t21-0223-tax-expenditure-child-tax). +In 2023, we estimate that the [Child Tax Credit costs $109.9 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=us&timePeriod=2023&baseline=3318). As context, the Tax Policy Center estimated in September 2021 that the CTC would cost [$126.3 billion in calendar year 2023](https://www.taxpolicycenter.org/model-estimates/tax-benefits-child-tax-credit-september-2021/t21-0223-tax-expenditure-child-tax). -Among the bottom 90% of households, the [CTC increases with income on average](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), due both to the partial refundability and higher income households having more children. The top income decile has a lower benefit as the credit phases out for high income filers. +Among the bottom 90% of households, the [CTC increases with income on average](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), due both to the partial refundability and higher income households having more children. The top income decile has a lower benefit as the credit phases out for high income filers. ![](https://cdn-images-1.medium.com/max/3200/0*EOZKSyWudaW5avqG) -[As a percentage of net income](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), the Child Tax Credit has the largest benefit for the fourth income decile. +[As a percentage of net income](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), the Child Tax Credit has the largest benefit for the fourth income decile. ![](https://cdn-images-1.medium.com/max/3200/0*0zeQPrJ9p_mki-gM) -[45% of Americans benefit from the Child Tax Credit.](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) For 30% of the population, the CTC increases household net income by at least 5%, disproportionately those in the fourth through sixth income deciles. +[45% of Americans benefit from the Child Tax Credit.](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) For 30% of the population, the CTC increases household net income by at least 5%, disproportionately those in the fourth through sixth income deciles. ![](https://cdn-images-1.medium.com/max/3200/0*wEG9Brxqq8ITG327) -[Without the Child Tax Credit](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), we estimate that the poverty rate would be 14.4% rather than 14.1%, and that the child poverty rate would be 9.6% instead of 8.9%. That is, we project that the current CTC cuts poverty 2.1% and child poverty 6.9%. +[Without the Child Tax Credit](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), we estimate that the poverty rate would be 14.4% rather than 14.1%, and that the child poverty rate would be 9.6% instead of 8.9%. That is, we project that the current CTC cuts poverty 2.1% and child poverty 6.9%. ![](https://cdn-images-1.medium.com/max/3200/0*WWSTQpJ4f_zu8eMh) -The [CTC reduces the deep poverty rate](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) — the population share with income below half their Supplemental Poverty Measure threshold — by less than 0.1%. +The [CTC reduces the deep poverty rate](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) — the population share with income below half their Supplemental Poverty Measure threshold — by less than 0.1%. ![](https://cdn-images-1.medium.com/max/3200/0*IW-FLe4tzpb46cbn) -The [CTC also reduces income inequality](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) using our three measures, for example cutting the Gini index by 1.1%. +The [CTC also reduces income inequality](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962) using our three measures, for example cutting the Gini index by 1.1%. ![](https://cdn-images-1.medium.com/max/3200/0*6H6JJlR5ouBqY3-c) -The [CTC reduces the prevalence and severity of cliffs by 1.0% and 0.7%](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), respectively. Cliffs occur when people who earn more have a lower net income due to taxes and withdrawn benefits. The CTC’s partial refundability lowers marginal tax rates, while its phase-out increases marginal tax rates; since low-income families disproportionately face cliffs, the marginal tax rate reductions at the low end reduce cliffs. [Read our full explainer on cliffs here.](https://policyengine.org/us/blog/how-would-reforms-affect-cliffs-c390fffcfdf7) +The [CTC reduces the prevalence and severity of cliffs by 1.0% and 0.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=2®ion=us&timePeriod=2023&baseline=3318&household=2962), respectively. Cliffs occur when people who earn more have a lower net income due to taxes and withdrawn benefits. The CTC’s partial refundability lowers marginal tax rates, while its phase-out increases marginal tax rates; since low-income families disproportionately face cliffs, the marginal tax rate reductions at the low end reduce cliffs. [Read our full explainer on cliffs here.](https://legacy.policyengine.org/us/blog/how-would-reforms-affect-cliffs-c390fffcfdf7) ![](https://cdn-images-1.medium.com/max/3200/0*dfD9j_Hng5cTIAQH) -You can view these analytics for any US state using the drop-down menu in the right panel. For example, in Pennsylvania, the Child Tax Credit [provides an aggregate $3.8 billion](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=pa&timePeriod=2023&baseline=3318) in benefits, [reduces child poverty 6.7%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=pa&timePeriod=2023&baseline=3318), and [lowers the Gini index by 1.0%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=pa&timePeriod=2023&baseline=3318). +You can view these analytics for any US state using the drop-down menu in the right panel. For example, in Pennsylvania, the Child Tax Credit [provides an aggregate $3.8 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=2®ion=pa&timePeriod=2023&baseline=3318) in benefits, [reduces child poverty 6.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=2®ion=pa&timePeriod=2023&baseline=3318), and [lowers the Gini index by 1.0%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=pa&timePeriod=2023&baseline=3318). -In conclusion, PolicyEngine provides a variety of analytics on the Child Tax Credit (CTC). Individuals can navigate the partially-refundable structure to estimate how it affects them, and explore different earnings scenarios. Those interested in broader effects can view our estimates of the CTC’s cost and distributional impacts, such as the degree to which it reduces poverty, inequality, and cliffs across the US and individual states. As policymakers explore CTC reforms, and households continue to seek information on it, we will continue to provide personalized and [increasingly accurate](https://policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) analytics on the policy’s impact. +In conclusion, PolicyEngine provides a variety of analytics on the Child Tax Credit (CTC). Individuals can navigate the partially-refundable structure to estimate how it affects them, and explore different earnings scenarios. Those interested in broader effects can view our estimates of the CTC’s cost and distributional impacts, such as the degree to which it reduces poverty, inequality, and cliffs across the US and individual states. As policymakers explore CTC reforms, and households continue to seek information on it, we will continue to provide personalized and [increasingly accurate](https://legacy.policyengine.org/us/blog/2022-12-28-enhancing-the-current-population-survey-for-policy-analysis) analytics on the policy’s impact. diff --git a/src/posts/articles/the-green-party-manifesto-at-policyfest.md b/src/posts/articles/the-green-party-manifesto-at-policyfest.md index 67fba6749..26c14637a 100644 --- a/src/posts/articles/the-green-party-manifesto-at-policyfest.md +++ b/src/posts/articles/the-green-party-manifesto-at-policyfest.md @@ -52,6 +52,6 @@ The manifesto policy reduces the number of tax parameters and makes the tax code ![*Marginal tax rates for a two-child, single-parent household with *£30,000 income and no housing costs](https://cdn-images-1.medium.com/max/3704/1*fDQGsO2DuAFM-cZvtutCSg.png)\**Marginal tax rates for a two-child, single-parent household with *£30,000 income and no housing costs\* -Overall, we find that the Green Party manifesto reduces poverty and inequality, benefits the majority of the population, simplifies tax and benefit rules, and reduces marginal tax rates on earnings, especially for low-income households. However, it produces a £15.8 billion deficit on a static basis. See the results in more detail, as well as a customizable household calculator and the option to reform the manifesto, [on PolicyEngine here](https://policyengine.org/uk/population-impact/green-party/manifesto-2019). +Overall, we find that the Green Party manifesto reduces poverty and inequality, benefits the majority of the population, simplifies tax and benefit rules, and reduces marginal tax rates on earnings, especially for low-income households. However, it produces a £15.8 billion deficit on a static basis. See the results in more detail, as well as a customizable household calculator and the option to reform the manifesto, [on PolicyEngine here](https://legacy.policyengine.org/uk/population-impact/green-party/manifesto-2019). _Updated on 2022–02–04 to reflect PolicyEngine’s new accuracy-enhancing survey weights, and to increase the higher rate threshold from £37,700 to £50,270 following discussions with the Green Party._ diff --git a/src/posts/articles/the-new-policyengine-us-population-impact-page.md b/src/posts/articles/the-new-policyengine-us-population-impact-page.md index 17e4e4ce6..38bdae3e8 100644 --- a/src/posts/articles/the-new-policyengine-us-population-impact-page.md +++ b/src/posts/articles/the-new-policyengine-us-population-impact-page.md @@ -2,7 +2,7 @@ Since we [beta-launched PolicyEngine US in March](https://blog.policyengine.org/ ## Case study: the End Child Poverty Act -As a case study, consider the [End Child Poverty Act](https://www.congress.gov/bill/117th-congress/house-bill/6598?s=1&r=4) (ECPA), which Representatives Rashida Tlaib (D-MA) and Mondaire Jones (D-NY) introduced in February 2022. This bill replaces the Child Tax Credit and Earned Income Tax Credit with a universal child allowance, an adult dependent credit, and a filer credit. [You can see a simulation of the End Child Poverty Act’s impact in PolicyEngine US here.](https://policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20) +As a case study, consider the [End Child Poverty Act](https://www.congress.gov/bill/117th-congress/house-bill/6598?s=1&r=4) (ECPA), which Representatives Rashida Tlaib (D-MA) and Mondaire Jones (D-NY) introduced in February 2022. This bill replaces the Child Tax Credit and Earned Income Tax Credit with a universal child allowance, an adult dependent credit, and a filer credit. [You can see a simulation of the End Child Poverty Act’s impact in PolicyEngine US here.](https://legacy.policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20) The Population Impact page starts with a disclaimer about the data (see the *Caveats *section of this post below), as well as some high-level measures of the reform’s impact. @@ -28,11 +28,11 @@ Finally, the Population Impact screen shows how the reform affects three measure ![](https://cdn-images-1.medium.com/max/3200/0*GkAw2gWXxfWf2T3R) -You can also see the [End Child Poverty Act’s impact on Massachusetts](https://policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&baseline_state_specific=MA) by selecting Massachusetts from the _Simulation > Geography_ page on the Policy screen. We’ll add more states to that drop-down as we implement more state income tax systems. +You can also see the [End Child Poverty Act’s impact on Massachusetts](https://legacy.policyengine.org/us/population-impact?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20&baseline_state_specific=MA) by selecting Massachusetts from the _Simulation > Geography_ page on the Policy screen. We’ll add more states to that drop-down as we implement more state income tax systems. \*Note: Our nationwide estimates of policy reforms keep state income taxes fixed at the values CPS respondents report. We simulate state income taxes only for state-specific analyses. The ECPA leaves some people worse off in the Massachusetts analysis because it repeals the EITC, which Massachusetts partially matches in its tax code.\ -As always, users can view the reform’s personalized impact by selecting the [_Your household_ tab](https://policyengine.org/us/household?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20) at the top. +As always, users can view the reform’s personalized impact by selecting the [_Your household_ tab](https://legacy.policyengine.org/us/household?abolish_eitc=1&end_child_poverty_act_adult_dependent_credit_amount=600&end_child_poverty_act_filer_credit_amount_HEAD_OF_HOUSEHOLD=600&end_child_poverty_act_filer_credit_amount_JOINT=1200&end_child_poverty_act_filer_credit_amount_SEPARATE=600&end_child_poverty_act_filer_credit_amount_SINGLE=600&end_child_poverty_act_filer_credit_amount_WIDOW=600&end_child_poverty_act_filer_credit_phase_out_start_HEAD_OF_HOUSEHOLD=20000&end_child_poverty_act_filer_credit_phase_out_start_JOINT=40000&end_child_poverty_act_filer_credit_phase_out_start_SEPARATE=20000&end_child_poverty_act_filer_credit_phase_out_start_SINGLE=20000&end_child_poverty_act_filer_credit_phase_out_start_WIDOW=20000&end_child_poverty_act_filer_credit_phase_out_rate=5&young_child_bi=4716&older_child_bi_age=19&abolish_non_refundable_ctc=1&abolish_refundable_ctc=1&young_adult_bi_age=20) at the top. ## Caveats diff --git a/src/posts/articles/trafwa-ctc.md b/src/posts/articles/trafwa-ctc.md index a0955225b..96ccb127b 100644 --- a/src/posts/articles/trafwa-ctc.md +++ b/src/posts/articles/trafwa-ctc.md @@ -1,4 +1,4 @@ -When Politico [reported](https://twitter.com/ben_guggenheim/status/1745403401695908256) the bipartisan tax package on January 11, we provided the [first budgetary and distributional analysis](https://policyengine.org/us/research/wyden-smith-ctc) of its main Child Tax Credit (CTC) provisions, that day. Today, we’re expanding that analysis to reflect all CTC provisions in the [Tax Relief for American Families and Workers Act of 2024](https://www.finance.senate.gov/imo/media/doc/the_tax_relief_for_american_families_and_workers_act_of_2024_technical_summary.pdf) (TRAFWA), which Senate Finance Committee Chair Ron Wyden (D-OR) and House Ways and Means Committee Chair Jason Smith (R-MO) [announced on January 16](https://waysandmeans.house.gov/smith-wyden-announce-agreement-on-tax-framework-to-help-families-and-main-street-businesses/). The House [passed the bill](https://www.congress.gov/bill/118th-congress/house-bill/7024/all-actions) 357–70 on January 31, and it currently sits in the Senate. +When Politico [reported](https://twitter.com/ben_guggenheim/status/1745403401695908256) the bipartisan tax package on January 11, we provided the [first budgetary and distributional analysis](https://legacy.policyengine.org/us/research/wyden-smith-ctc) of its main Child Tax Credit (CTC) provisions, that day. Today, we’re expanding that analysis to reflect all CTC provisions in the [Tax Relief for American Families and Workers Act of 2024](https://www.finance.senate.gov/imo/media/doc/the_tax_relief_for_american_families_and_workers_act_of_2024_technical_summary.pdf) (TRAFWA), which Senate Finance Committee Chair Ron Wyden (D-OR) and House Ways and Means Committee Chair Jason Smith (R-MO) [announced on January 16](https://waysandmeans.house.gov/smith-wyden-announce-agreement-on-tax-framework-to-help-families-and-main-street-businesses/). The House [passed the bill](https://www.congress.gov/bill/118th-congress/house-bill/7024/all-actions) 357–70 on January 31, and it currently sits in the Senate. From 2023 to 2025 — in our static model assuming full take-up — we project the TRAFWA’s CTC reforms would: @@ -10,7 +10,7 @@ From 2023 to 2025 — in our static model assuming full take-up — we project t - Lower the Gini index of income inequality by 0.1% in 2023, rising to 0.3% in 2025 -This report describes these results in more detail, both for individual households and society at large. We’ll show the [custom mini-app](https://policyengine.org/us/trafwa-ctc-calculator) we built to capture the multi-year effects of the bill on your own family. This is also the first analysis we’ve published using our Enhanced Current Population Survey, we’ve built to give everyone access to the most accurate tax-benefit microsimulation modeling available — learn more about our launch of this cutting-edge dataset [here](enhanced-cps-beta). We close with a comparison to the Joint Committee on Taxation’s results. +This report describes these results in more detail, both for individual households and society at large. We’ll show the [custom mini-app](https://legacy.policyengine.org/us/trafwa-ctc-calculator) we built to capture the multi-year effects of the bill on your own family. This is also the first analysis we’ve published using our Enhanced Current Population Survey, we’ve built to give everyone access to the most accurate tax-benefit microsimulation modeling available — learn more about our launch of this cutting-edge dataset [here](enhanced-cps-beta). We close with a comparison to the Joint Committee on Taxation’s results. [**Click here**](../trafwa-ctc-calculator) to see how the Tax Relief for American Families and Workers Act would affect your own household’s Child Tax Credit. @@ -30,9 +30,9 @@ The TRAFWA makes four changes to the CTC: ## Impact on a Household -In our [previous report](https://policyengine.org/us/research/wyden-smith-ctc), we showed how the TRAFWA would affect a single parent of two in 2023. That analysis still holds, so here we’ll show a more complex example: a married family with three children, in 2025, with $10,000 of earnings in 2024. This household would be affected by all TRAWFA CTC reforms: the refundability rise, phase-in rate, inflation adjustment, and lookback provision. +In our [previous report](https://legacy.policyengine.org/us/research/wyden-smith-ctc), we showed how the TRAFWA would affect a single parent of two in 2023. That analysis still holds, so here we’ll show a more complex example: a married family with three children, in 2025, with $10,000 of earnings in 2024. This household would be affected by all TRAWFA CTC reforms: the refundability rise, phase-in rate, inflation adjustment, and lookback provision. -Before getting into the analytics, let’s plug this household into our [new TRAFWA calculator](https://policyengine.org/us/trafwa-ctc-calculator). This tool lets you plug in a few pieces of information to see how the bill would affect you (we don’t collect any personally identifiable information). Let’s suppose they earned $30,000 in 2023, $10,000 in 2024, and $0 in 2025. +Before getting into the analytics, let’s plug this household into our [new TRAFWA calculator](https://legacy.policyengine.org/us/trafwa-ctc-calculator). This tool lets you plug in a few pieces of information to see how the bill would affect you (we don’t collect any personally identifiable information). Let’s suppose they earned $30,000 in 2023, $10,000 in 2024, and $0 in 2025. ![](https://cdn-images-1.medium.com/max/3200/0*-TiVkn4xxhEmM812) @@ -40,13 +40,13 @@ After clicking **Calculate**, we can see that they gain $9,225 total. $7,950 of ![](https://cdn-images-1.medium.com/max/3200/0*iirHzRPbLja-E4Yk) -Now let’s return to the main app for deeper analytics. If this family has [no earned income in 2025](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256), they would be ineligible for any credit under current law. However, TRAFWA would make them eligible for an ACTC phasing in at 45% (15% times three children) of earnings in excess of $2,500, based on their $10,000 of 2024 earnings, up to a maximum of $6,300 ($2,100 for each of three children). That’s 45% of $7,500, or $3,375, which is below the cap. +Now let’s return to the main app for deeper analytics. If this family has [no earned income in 2025](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256), they would be ineligible for any credit under current law. However, TRAFWA would make them eligible for an ACTC phasing in at 45% (15% times three children) of earnings in excess of $2,500, based on their $10,000 of 2024 earnings, up to a maximum of $6,300 ($2,100 for each of three children). That’s 45% of $7,500, or $3,375, which is below the cap. -TRAFWA would affect this family differently [depending on their earnings in 2025](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256). Under current law (gray), their ACTC phases in beginning at $2,500, up to a maximum of $5,100 when their earnings reach $36,500. Under TRAFWA, they receive $3,375 until their 2025 earnings exceed their 2024 earnings, at which point it phases in at 45% before reaching $6,300. The non-refundable CTC then displaces the ACTC at higher earnings in both scenarios. +TRAFWA would affect this family differently [depending on their earnings in 2025](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256). Under current law (gray), their ACTC phases in beginning at $2,500, up to a maximum of $5,100 when their earnings reach $36,500. Under TRAFWA, they receive $3,375 until their 2025 earnings exceed their 2024 earnings, at which point it phases in at 45% before reaching $6,300. The non-refundable CTC then displaces the ACTC at higher earnings in both scenarios. ![](https://cdn-images-1.medium.com/max/2940/0*fkV9Z2PdXtG6FUxI) -The [net effect](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256) is a gain of up to $4,200 at $16,500 earnings, stabilizing at $300 from the inflation adjustment only at $38,500 earnings. +The [net effect](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=44823®ion=us&timePeriod=2025&baseline=2&household=40256) is a gain of up to $4,200 at $16,500 earnings, stabilizing at $300 from the inflation adjustment only at $38,500 earnings. ![](https://cdn-images-1.medium.com/max/2912/0*1-gBRdTFzk20GBj1) @@ -54,15 +54,15 @@ The [net effect](https://policyengine.org/us/household?focus=householdOutput.ear Using PolicyEngine US v0.717.0 project that the TRAFWA CTC would cost $39.8 billion over the three years, with the cost rising each year. Appendix A compares the cost by year and provision to the Joint Committee on Taxation. Here we otherwise focus on 2024 impacts; to see other years, you can click the links and change the year in the right menu. -In 2024, households in the third income decile benefit most on an [absolute](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) basis, while those in the second decile benefit most on a [relative](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.decileRelativeImpact®ion=enhanced_us&timePeriod=2024&baseline=2) basis. They benefit more than lower income households who have fewer children and don’t meet the earnings requirement, and more than higher income households who take the non-refundable CTC instead. +In 2024, households in the third income decile benefit most on an [absolute](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) basis, while those in the second decile benefit most on a [relative](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.decileRelativeImpact®ion=enhanced_us&timePeriod=2024&baseline=2) basis. They benefit more than lower income households who have fewer children and don’t meet the earnings requirement, and more than higher income households who take the non-refundable CTC instead. ![](https://cdn-images-1.medium.com/max/3200/0*KYmHcVBQHNKS2M8f) -These provisions would [benefit 40% of US residents](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.intraDecileImpact®ion=enhanced_us&timePeriod=2024&baseline=2) in 2024. 4% of Americans gain at least 5% of net income, disproportionately those in the bottom four deciles. +These provisions would [benefit 40% of US residents](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.intraDecileImpact®ion=enhanced_us&timePeriod=2024&baseline=2) in 2024. 4% of Americans gain at least 5% of net income, disproportionately those in the bottom four deciles. ![](https://cdn-images-1.medium.com/max/3200/0*fCLAKxRJJbob4GOV) -The number of people with resources below the poverty line would fall 2.0%, disproportionately [children](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.povertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (6.9%), [Blacks](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.racialPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (3.6%), and [women](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.genderPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (2.2%). We project that the bill would reduce the [number of children in poverty](https://colab.research.google.com/drive/1CApzPOg-qXbvYPdwmp0gIPK__kffixQH?authuser=1#scrollTo=OqtYayw8YNhu) by 345,000 in 2023, 573,000 in 2024, and 740,000 in 2025.[^1] Deep child poverty would [fall 6.1%](https://policyengine.org/us/policy?reform=46315&focus=policyOutput.deepPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2), and the Gini index of income inequality would [fall 0.25%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=44066®ion=us&timePeriod=2023&baseline=2). +The number of people with resources below the poverty line would fall 2.0%, disproportionately [children](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.povertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (6.9%), [Blacks](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.racialPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (3.6%), and [women](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.genderPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2) (2.2%). We project that the bill would reduce the [number of children in poverty](https://colab.research.google.com/drive/1CApzPOg-qXbvYPdwmp0gIPK__kffixQH?authuser=1#scrollTo=OqtYayw8YNhu) by 345,000 in 2023, 573,000 in 2024, and 740,000 in 2025.[^1] Deep child poverty would [fall 6.1%](https://legacy.policyengine.org/us/policy?reform=46315&focus=policyOutput.deepPovertyImpact®ion=enhanced_us&timePeriod=2024&baseline=2), and the Gini index of income inequality would [fall 0.25%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=44066®ion=us&timePeriod=2023&baseline=2). [^1]: The Center on Budget and Policy Priorities [forecasted](https://www.cbpp.org/research/federal-tax/about-16-million-children-in-low-income-families-would-gain-in-first-year-of) that "In the first year, the expansion would lift as many as 400,000 children above the poverty line. [...] When the expansion is fully in effect, it would lift some 500,000 or more children above the poverty line." @@ -82,13 +82,13 @@ As shown in the table below, major differences include: 1. PolicyEngine finds a substantially larger impact of the lookback provision. We [build a panel from the 2018 and 2019 ASEC files](https://www2.census.gov/programs-surveys/cps/methodology/How%20To%20Link%20CPS%20Public%20Use%20Files.pdf), limiting to those who responded to employment and self-employment income questions, then build a quantile regression forests model to predict the distribution of prior-year earnings for each person in the CPS. This prediction algorithm adjusts the sampling distribution to match the total employment and self-employment income in the relevant year. Our model uses [these variables](https://github.com/PolicyEngine/policyengine-us/blob/1d3ca3ef54e2904a547a1e649b90979aaad0509a/policyengine_us/data/datasets/cps/enhanced_cps/enhanced_cps.py#L57-L71) as predictors. JCT shared with us that the allocation of dependents to tax units within the household likely explains the discrepancy; we have filed [this GitHub issue](https://github.com/PolicyEngine/policyengine-us/issues/4392) to improve our modeling on this front. -| Provision | 2023 (JCT) | 2023 (PE) | 2024 (JCT) | 2024 (PE) | 2025 (JCT) | 2025 (PE) | 2023-2025 (JCT) | 2023-2025 (PE) | -| :------------------- | ---------: | :-------------------------------------------------------------------------------------------------------------------------------------- | ---------: | :--------------------------------------------------------------------------------------------------------------------------------------- | ---------: | :--------------------------------------------------------------------------------------------------------------------------------------- | --------------: | -------------: | -| Per-child phase-in | 5.5 | [4.2](https://policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 6 | [5.0](https://policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 5.7 | [4.7](https://policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 17.2 | 13.9 | -| Look-back | 0 | [0.0](https://policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 0.8 | [3.7](https://policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 0.7 | [4.5](https://policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 1.5 | 8.2 | -| Refund-able increase | 2.7 | [1.7](https://policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 2.5 | [2.1](https://policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 3.4 | [3.1](https://policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 8.6 | 6.9 | -| Indexing CTC | 0 | [0.0](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 1.4 | [4.9](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 4.7 | [5.9](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 6.1 | 10.8 | -| Com-bined | 8.2 | [5.9](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 10.7 | [15.7](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 14.7 | [18.2](https://policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 33.6 | 39.8 | +| Provision | 2023 (JCT) | 2023 (PE) | 2024 (JCT) | 2024 (PE) | 2025 (JCT) | 2025 (PE) | 2023-2025 (JCT) | 2023-2025 (PE) | +| :------------------- | ---------: | :--------------------------------------------------------------------------------------------------------------------------------------------- | ---------: | :---------------------------------------------------------------------------------------------------------------------------------------------- | ---------: | :---------------------------------------------------------------------------------------------------------------------------------------------- | --------------: | -------------: | +| Per-child phase-in | 5.5 | [4.2](https://legacy.policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 6 | [5.0](https://legacy.policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 5.7 | [4.7](https://legacy.policyengine.org/us/policy?reform=49823&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 17.2 | 13.9 | +| Look-back | 0 | [0.0](https://legacy.policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 0.8 | [3.7](https://legacy.policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 0.7 | [4.5](https://legacy.policyengine.org/us/policy?reform=49855&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 1.5 | 8.2 | +| Refund-able increase | 2.7 | [1.7](https://legacy.policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 2.5 | [2.1](https://legacy.policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 3.4 | [3.1](https://legacy.policyengine.org/us/policy?reform=49861&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 8.6 | 6.9 | +| Indexing CTC | 0 | [0.0](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 1.4 | [4.9](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 4.7 | [5.9](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 6.1 | 10.8 | +| Com-bined | 8.2 | [5.9](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2023®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 10.7 | [15.7](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2024®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 14.7 | [18.2](https://legacy.policyengine.org/us/policy?reform=49862&baseline=2&timePeriod=2025®ion=enhanced_us&focus=policyOutput.policyBreakdown) | 33.6 | 39.8 | Our estimates may also differ due to different data, take-up assumptions (we assume full take-up, including of the lookback provision), and behavioral responses (though JCT said that they project minimal labor supply effects). diff --git a/src/posts/articles/trump-2024.md b/src/posts/articles/trump-2024.md index 342d61203..b3ed4a3bd 100644 --- a/src/posts/articles/trump-2024.md +++ b/src/posts/articles/trump-2024.md @@ -1,4 +1,4 @@ -Throughout the election cycle, we at PolicyEngine have covered a few of former President Trump’s policy proposals. This includes: [exempting Social Security benefits](https://policyengine.org/us/research/social-security-tax-exemption#user-content-fn-trust-fund-split) from income tax and [extending the Tax Cuts and Jobs Act](https://policyengine.org/us/research/tcja-extension) (TCJA) individual provisions. Additionally, Donald Trump has signaled that he would repeal the [SALT deduction cap](https://www.cnn.com/2024/09/17/politics/donald-trump-salt-tax/index.html), reversing the $10,000 limit he signed into law with the passage of the TCJA. We at PolicyEngine have combined these three policies into one reform to simulate the effects of at least part of Donald Trump’s economic agenda and analyze its impact on households and the U.S. economy. +Throughout the election cycle, we at PolicyEngine have covered a few of former President Trump’s policy proposals. This includes: [exempting Social Security benefits](https://legacy.policyengine.org/us/research/social-security-tax-exemption#user-content-fn-trust-fund-split) from income tax and [extending the Tax Cuts and Jobs Act](https://legacy.policyengine.org/us/research/tcja-extension) (TCJA) individual provisions. Additionally, Donald Trump has signaled that he would repeal the [SALT deduction cap](https://www.cnn.com/2024/09/17/politics/donald-trump-salt-tax/index.html), reversing the $10,000 limit he signed into law with the passage of the TCJA. We at PolicyEngine have combined these three policies into one reform to simulate the effects of at least part of Donald Trump’s economic agenda and analyze its impact on households and the U.S. economy. Key results: @@ -8,7 +8,7 @@ Key results: - Increase hours worked and earnings by 0.82% and 0.79% in 2026, respectively when applying CBO elasticities. -[_Try our personalized calculator:_](https://policyengine.org/us/2024-election-calculator) See how Donald Trump’s economic agenda would affect your household, including other policies like tariffs and income tax exemptions for tips and overtime. +[_Try our personalized calculator:_](https://legacy.policyengine.org/us/2024-election-calculator) See how Donald Trump’s economic agenda would affect your household, including other policies like tariffs and income tax exemptions for tips and overtime. ## Donald Trump’s Tax Plan @@ -22,7 +22,7 @@ Donald Trump has released several more policy proposals during the cycle. These - Extending TCJA's corporate tax provisions -While this analysis does not include these proposals, we at PolicyEngine have released a [2024 election household calculator](https://policyengine.org/us/2024-election-calculator) containing the reforms examined in this analysis and the listed provisions above. Read our previous reports on how [exempting Social Security benefits](https://policyengine.org/us/research/social-security-tax-exemption) and [extending the TCJA's individual provisions](https://policyengine.org/us/research/tcja-extension) would independently affect American households and the U.S. economy. +While this analysis does not include these proposals, we at PolicyEngine have released a [2024 election household calculator](https://legacy.policyengine.org/us/2024-election-calculator) containing the reforms examined in this analysis and the listed provisions above. Read our previous reports on how [exempting Social Security benefits](https://legacy.policyengine.org/us/research/social-security-tax-exemption) and [extending the TCJA's individual provisions](https://legacy.policyengine.org/us/research/tcja-extension) would independently affect American households and the U.S. economy. ## Household Impacts 2026 @@ -30,13 +30,13 @@ Implementing all three policies would have varying effects on American household **Table 1: Change in Net Income Based on Household Composition** -| Marital Status | Children | Earnings | Social Security Benefits | State and Local Tax | Change in Net Income | -| -------------- | -------- | ---------- | ------------------------ | ------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | -| Single | 0 | $0 | $24,000 | $0 | [$0](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49220) | -| Single | 1 | $30,000 | $0 | $0 | [$1,020](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49231) | -| Married | 0 | $70,000 | $24,000 | $0 | [$3,911](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49225) | -| Married | 2 | $150,000 | $0 | $0 | [$5,055](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49234) | -| Married | 3 | $1,000,000 | $0 | $100,000 | [$39,158](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) | +| Marital Status | Children | Earnings | Social Security Benefits | State and Local Tax | Change in Net Income | +| -------------- | -------- | ---------- | ------------------------ | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | +| Single | 0 | $0 | $24,000 | $0 | [$0](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49220) | +| Single | 1 | $30,000 | $0 | $0 | [$1,020](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49231) | +| Married | 0 | $70,000 | $24,000 | $0 | [$3,911](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49225) | +| Married | 2 | $150,000 | $0 | $0 | [$5,055](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49234) | +| Married | 3 | $1,000,000 | $0 | $100,000 | [$39,158](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) | For a single retired adult receiving just above the [average Social Security retirement benefit](https://faq.ssa.gov/en-us/Topic/article/KA-01903#:~:text=Views:,most%20convenient%20way%20to%20apply.) (first example), their net income would see no change as their benefits face zero taxation under the current structure. While net income does not always rise with increased earnings, it does for most households which can be viewed in Table 1. This trend can be mainly attributed to the reduction in income tax rates from extending the TCJA. Additionally, families with children see an increase in net income due to the changes in the child tax credit (assuming their earnings are below the phase-out threshold). Households with high earnings, like in example five, see the largest gains. If they have real estate taxes that can be deducted using the SALT deduction, they benefit even more. Figure 1 shows how net income changes as household income rises for a married couple with two children (example four). @@ -46,7 +46,7 @@ For a single retired adult receiving just above the [average Social Security ret ## Federal Budgetary Impact -Donald Trump’s three policies would reduce federal revenues by $5.8 trillion over ten years when utilizing [static modeling](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69665®ion=enhanced_us&timePeriod=2025&baseline=2). [When considering behavioral effects](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69666®ion=enhanced_us&timePeriod=2025&baseline=2) (applying [CBO’s central elasticities](https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/43674-laborsupplyfiscalpolicy.pdf#page=4)), the cost drops to $5.4 trillion. In 2025, the [budgetary impact](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=69665®ion=enhanced_us&timePeriod=2025&baseline=2&household=49239) of the proposals is much smaller as the extension of the TCJA’s individual provisions does not come into effect until tax year 2026. Additionally, the number of total hours worked and earnings would decrease in 2025 before increasing as compared to the current baseline in subsequent years. As mentioned in our TCJA analysis, the [CBO projects](https://www.cbo.gov/publication/59710) that federal deficits would total $20 trillion over the next decade. Implementing all three policies, without any offsets, would raise deficits by roughly 27% using our dynamic estimate. +Donald Trump’s three policies would reduce federal revenues by $5.8 trillion over ten years when utilizing [static modeling](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69665®ion=enhanced_us&timePeriod=2025&baseline=2). [When considering behavioral effects](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=69666®ion=enhanced_us&timePeriod=2025&baseline=2) (applying [CBO’s central elasticities](https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/43674-laborsupplyfiscalpolicy.pdf#page=4)), the cost drops to $5.4 trillion. In 2025, the [budgetary impact](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=69665®ion=enhanced_us&timePeriod=2025&baseline=2&household=49239) of the proposals is much smaller as the extension of the TCJA’s individual provisions does not come into effect until tax year 2026. Additionally, the number of total hours worked and earnings would decrease in 2025 before increasing as compared to the current baseline in subsequent years. As mentioned in our TCJA analysis, the [CBO projects](https://www.cbo.gov/publication/59710) that federal deficits would total $20 trillion over the next decade. Implementing all three policies, without any offsets, would raise deficits by roughly 27% using our dynamic estimate. **Table 2: Federal Budgetary Impact of Three of Donald Trump’s Tax Policies (in billions $)** @@ -66,15 +66,15 @@ Donald Trump’s three policies would reduce federal revenues by $5.8 trillion o ## Income Distribution 2026 -Enacting these reform policies would [increase the net income of 81.6%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) of Americans in 2026. 0.6% of Americans see lower net income, likely due to state tax interactions. A larger share of households in the upper half of the income distribution would benefit compared to those in the lower half. Our distributional estimates assume no behavioral responses. +Enacting these reform policies would [increase the net income of 81.6%](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) of Americans in 2026. 0.6% of Americans see lower net income, likely due to state tax interactions. A larger share of households in the upper half of the income distribution would benefit compared to those in the lower half. Our distributional estimates assume no behavioral responses. ![](https://cdn-images-1.medium.com/max/2000/0*0PnM-e-gieyUTSW1) -In 2026, the average household benefit when enacting these reforms is [$3,570](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239). However, the families in the top income decile would receive an average benefit of $16,608, while the lowest decile would receive just $345, assuming no behavioral responses. +In 2026, the average household benefit when enacting these reforms is [$3,570](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239). However, the families in the top income decile would receive an average benefit of $16,608, while the lowest decile would receive just $345, assuming no behavioral responses. ![](https://cdn-images-1.medium.com/max/2000/0*9BPsZ7C5woD91CYq) -Donald Trump’s three policies would also [reduce the Supplemental Poverty Measure by 4.6%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) in 2026, assuming no behavioral effects. Additionally, senior and child poverty would drop by 7.0% and 8.2%, respectively. +Donald Trump’s three policies would also [reduce the Supplemental Poverty Measure by 4.6%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=69665®ion=enhanced_us&timePeriod=2026&baseline=2&household=49239) in 2026, assuming no behavioral effects. Additionally, senior and child poverty would drop by 7.0% and 8.2%, respectively. ![](https://cdn-images-1.medium.com/max/2000/0*DMAUDgM1BG7e3wv9) @@ -84,4 +84,4 @@ Implementing three of Donald Trump’s tax proposals would reduce federal revenu As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. diff --git a/src/posts/articles/uk-2024-spring-budget.ipynb b/src/posts/articles/uk-2024-spring-budget.ipynb index dca82caa3..a976b31b6 100644 --- a/src/posts/articles/uk-2024-spring-budget.ipynb +++ b/src/posts/articles/uk-2024-spring-budget.ipynb @@ -6,7 +6,7 @@ "source": [ "Today, Chancellor of the Exchequer Jeremy Hunt announced the Government's Spring Budget 2024. This budget includes a variety of reforms, delineated by the Treasury [here](https://www.gov.uk/government/publications/spring-budget-2024).\n", "\n", - "In this post, PolicyEngine will model the budgetary, societal, and distributional impacts of the budget's reforms to National Insurance, the High Income Child Benefit Charge, and the fuel duty. *To view the impacts of these reforms upon society in PolicyEngine's interactive reform modeling tool, visit [this link](https://policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024).*\n", + "In this post, PolicyEngine will model the budgetary, societal, and distributional impacts of the budget's reforms to National Insurance, the High Income Child Benefit Charge, and the fuel duty. *To view the impacts of these reforms upon society in PolicyEngine's interactive reform modeling tool, visit [this link](https://legacy.policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024).*\n", "\n", "## Spring Budget 2024 reforms\n", "The Spring 2024 Budget includes reforms to various different segments of the tax code. Of these, PolicyEngine will be modelling the following in this article:\n", @@ -199,7 +199,7 @@ " lambda x: f\"{x/1e9:+,.1f}\"\n", ")\n", "df[\"PolicyEngine\"] = df[\"PolicyEngine\"].apply(\n", - " lambda x: f\"[#{x}](https://policyengine.org/uk/policy?reform={x}&baseline=1&time_period=2024®ion=uk)\"\n", + " lambda x: f\"[#{x}](https://legacy.policyengine.org/uk/policy?reform={x}&baseline=1&time_period=2024®ion=uk)\"\n", ")\n", "df[\"Percent gaining\"] = df[\"Percent gaining\"].apply(lambda x: f\"{x:+.1%}\")\n", "df[\"Poverty change\"] = df[\"Poverty change\"].apply(lambda x: f\"{x:+.1%}\")\n", @@ -216,11 +216,11 @@ "text/markdown": [ "| Reform | Budgetary impact | Percent gaining | Poverty change | Inequality change | PolicyEngine |\n", "|:-----------------|-------------------:|:------------------|:-----------------|:--------------------|:------------------------------------------------------------------------------------------------|\n", - "| Fuel duty freeze | -1.7 | +44.7% | -0.2% | -0.1% | [#49760](https://policyengine.org/uk/policy?reform=49760&baseline=1&time_period=2024®ion=uk) |\n", - "| CB HITC cut | -1.4 | +7.0% | +0.0% | +0.0% | [#49761](https://policyengine.org/uk/policy?reform=49761&baseline=1&time_period=2024®ion=uk) |\n", - "| NI class 1 cut | -10 | +63.8% | +0.0% | +0.3% | [#49643](https://policyengine.org/uk/policy?reform=49643&baseline=1&time_period=2024®ion=uk) |\n", - "| NI class 4 cut | -1 | +8.0% | +0.0% | +0.0% | [#49762](https://policyengine.org/uk/policy?reform=49762&baseline=1&time_period=2024®ion=uk) |\n", - "| Combined | -14.1 | +78.9% | -0.4% | +0.3% | [#49773](https://policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk) |" + "| Fuel duty freeze | -1.7 | +44.7% | -0.2% | -0.1% | [#49760](https://legacy.policyengine.org/uk/policy?reform=49760&baseline=1&time_period=2024®ion=uk) |\n", + "| CB HITC cut | -1.4 | +7.0% | +0.0% | +0.0% | [#49761](https://legacy.policyengine.org/uk/policy?reform=49761&baseline=1&time_period=2024®ion=uk) |\n", + "| NI class 1 cut | -10 | +63.8% | +0.0% | +0.3% | [#49643](https://legacy.policyengine.org/uk/policy?reform=49643&baseline=1&time_period=2024®ion=uk) |\n", + "| NI class 4 cut | -1 | +8.0% | +0.0% | +0.0% | [#49762](https://legacy.policyengine.org/uk/policy?reform=49762&baseline=1&time_period=2024®ion=uk) |\n", + "| Combined | -14.1 | +78.9% | -0.4% | +0.3% | [#49773](https://legacy.policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk) |" ], "text/plain": [ "" @@ -252,7 +252,7 @@ "source": [ "## Budgetary impacts\n", "\n", - "The PolicyEngine microsimulation model projects that the six reforms covered in this article will cost a combined [£14.1 billion in 2024](https://policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024). This is only slightly higher than the Treasury's projected cost of [£13.7 billion](https://assets.publishing.service.gov.uk/media/65e7920c08eef600155a5617/Published_Costing_Document_Spring_Budget_2024_Final.pdf) for the same six reforms in fiscal year 2024-2025. Some of the variance in these projections are attributable to HM Treasury's inclusion of behavioural responses to policy reforms, as well as Treasury's modelling over a the fiscal year, as opposed to the calendar year.\n", + "The PolicyEngine microsimulation model projects that the six reforms covered in this article will cost a combined [£14.1 billion in 2024](https://legacy.policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024). This is only slightly higher than the Treasury's projected cost of [£13.7 billion](https://assets.publishing.service.gov.uk/media/65e7920c08eef600155a5617/Published_Costing_Document_Spring_Budget_2024_Final.pdf) for the same six reforms in fiscal year 2024-2025. Some of the variance in these projections are attributable to HM Treasury's inclusion of behavioural responses to policy reforms, as well as Treasury's modelling over a the fiscal year, as opposed to the calendar year.\n", "\n", "Table 2 below presents PolicyEngine's broader estimates over 2024, 2025, and 2026, as compared to HM Treasury's [estimates](https://assets.publishing.service.gov.uk/media/65e8578eb559930011ade2cb/E03057752_HMT_Spring_Budget_Mar_24_Web_Accessible__2_.pdf) over the corresponding fiscal years (2024-2025, etc.) for the six policies investigated in this article." ] @@ -1851,9 +1851,9 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "For the same hypothetical person, if their income falls within the range specified above, the tax reforms analysed here would yield a 2% drop in their marginal tax rate; all others would see no change. *View this household in the interactive PolicyEngine tax calculator [here](https://policyengine.org/uk/household?reform=49773&baseline=1&time_period=2024®ion=uk&focus=householdOutput.netIncome&timePeriod=2024&household=42359).*\n", + "For the same hypothetical person, if their income falls within the range specified above, the tax reforms analysed here would yield a 2% drop in their marginal tax rate; all others would see no change. *View this household in the interactive PolicyEngine tax calculator [here](https://legacy.policyengine.org/uk/household?reform=49773&baseline=1&time_period=2024®ion=uk&focus=householdOutput.netIncome&timePeriod=2024&household=42359).*\n", "\n", - "For a married couple with two children, the impacts of this reform package are slightly more complext. Again, these reforms would produce no increase to post-tax income until the head of household earns £12,750 per year, after which the families net income will rise, until reaching a peak of £2,874 when the head makes £60,000. After this point, the post-tax benefit drops as the High Income Child Benefit Charge phases in, until the end of its taper at £80,000, at which all households see a net income increase of £754. These figures do not include the impact of the fuel duty freeze. *View this household in the interactive PolicyEngine tax calculator [here](https://policyengine.org/uk/household?reform=49773&baseline=1&time_period=2024®ion=uk&focus=householdOutput.earnings&timePeriod=2024&household=42361).*" + "For a married couple with two children, the impacts of this reform package are slightly more complext. Again, these reforms would produce no increase to post-tax income until the head of household earns £12,750 per year, after which the families net income will rise, until reaching a peak of £2,874 when the head makes £60,000. After this point, the post-tax benefit drops as the High Income Child Benefit Charge phases in, until the end of its taper at £80,000, at which all households see a net income increase of £754. These figures do not include the impact of the fuel duty freeze. *View this household in the interactive PolicyEngine tax calculator [here](https://legacy.policyengine.org/uk/household?reform=49773&baseline=1&time_period=2024®ion=uk&focus=householdOutput.earnings&timePeriod=2024&household=42361).*" ] }, { @@ -3204,7 +3204,7 @@ "metadata": {}, "source": [ "## Conclusion\n", - "PolicyEngine estimates the cost of the Spring Budget 2023's reforms to National Insurance, the High Income Child Benefit Charge, and the fuel duty at £14.1 billion in 2024. Cumulatively, these reforms will raise the net income of 77.4% of British households, with a disproportionately positive impact upon higher-income households. We also find a small effect on poverty reduction, as well as a 0.5% increase in inequality. For readers interested in generating their own society-wide tax reform simulations or better understanding how these reforms will impact their household in the coming fiscal year, we invite you to use our personalised [PolicyEngine calculator](https://policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024), available on desktop and mobile devices." + "PolicyEngine estimates the cost of the Spring Budget 2023's reforms to National Insurance, the High Income Child Benefit Charge, and the fuel duty at £14.1 billion in 2024. Cumulatively, these reforms will raise the net income of 77.4% of British households, with a disproportionately positive impact upon higher-income households. We also find a small effect on poverty reduction, as well as a 0.5% increase in inequality. For readers interested in generating their own society-wide tax reform simulations or better understanding how these reforms will impact their household in the coming fiscal year, we invite you to use our personalised [PolicyEngine calculator](https://legacy.policyengine.org/uk/policy?reform=49773&baseline=1&time_period=2024®ion=uk&focus=policyOutput.policyBreakdown&timePeriod=2024), available on desktop and mobile devices." ] } ], diff --git a/src/posts/articles/uk-benefits-post.md b/src/posts/articles/uk-benefits-post.md index e7883d9c1..87fd21618 100644 --- a/src/posts/articles/uk-benefits-post.md +++ b/src/posts/articles/uk-benefits-post.md @@ -6,28 +6,28 @@ Table 1 summarises estimates for each benefit in the UK system, comparing Policy **Table 1: Summary of UK benefit expenditure estimates** -| Programme | PolicyEngine estimate 2025 (£bn) | OBR estimate 2025-26 (£bn) | PolicyEngine affected population estimate 2025 (%) | -| ----------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | -| Universal Credit | 79.4 | [77.4](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 21.8 | -| Housing Benefit | [7.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80663) | [11.6](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 2.9 | -| Tax Credits | [<1.0](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80677) | [<1.0](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 0.1 | -| Pension Credit | [7.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80685) | [6.0](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-pensioner-benefits/) | 3.6 | -| Personal Independence Payment | [30.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80686) | [28.7](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 10.3 | -| Disability Living Allowance | [9.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80689) | [7.5](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 4.5 | -| Attendance Allowance | [10.2](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80692) | [8.0](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 3.9 | -| Child Benefit | [12.3](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80696) | [12.5](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-child-benefit/#:~:text=Child%20benefit%20is%20a%20cash,the%20UK%20in%202023%2D24.) | 31.3 | -| Winter Fuel Payment | [<1.0](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80702) | [<1.0](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 2.7 | +| Programme | PolicyEngine estimate 2025 (£bn) | OBR estimate 2025-26 (£bn) | PolicyEngine affected population estimate 2025 (%) | +| ----------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | +| Universal Credit | 79.4 | [77.4](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 21.8 | +| Housing Benefit | [7.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80663) | [11.6](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 2.9 | +| Tax Credits | [<1.0](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80677) | [<1.0](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 0.1 | +| Pension Credit | [7.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80685) | [6.0](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-pensioner-benefits/) | 3.6 | +| Personal Independence Payment | [30.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80686) | [28.7](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 10.3 | +| Disability Living Allowance | [9.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80689) | [7.5](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 4.5 | +| Attendance Allowance | [10.2](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80692) | [8.0](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) | 3.9 | +| Child Benefit | [12.3](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80696) | [12.5](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-child-benefit/#:~:text=Child%20benefit%20is%20a%20cash,the%20UK%20in%202023%2D24.) | 31.3 | +| Winter Fuel Payment | [<1.0](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80702) | [<1.0](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) | 2.7 | As government estimates for childcare programmes are available for the 2024 fiscal year, we present them separately in the table below. Table 2 compares UK childcare programme costs, showing PolicyEngine's expenditure estimates for 2025 alongside both previous year estimates and official government projections. **Table 2: Summary of UK childcare programmes expenditure estimates** -| Programme | PolicyEngine estimate 2025 (£bn) | PolicyEngine estimate 2024 (£bn) | Government report 2024 (£bn) | PolicyEngine affected population estimate 2025 (%) | -| ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | -| Tax-free childcare | [0.7](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) | [0.6](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) | [0.6](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) | 2.8 | -| Extended childcare | [4.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613&uk_local_areas_beta=true) | [2.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) | [2.5](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 4.3 | -| Universal childcare | [1.8](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) | [1.6](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) | [1.7](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 2.6 | -| Targeted childcare | [0.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) | [0.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) | [0.6](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 0.5 | +| Programme | PolicyEngine estimate 2025 (£bn) | PolicyEngine estimate 2024 (£bn) | Government report 2024 (£bn) | PolicyEngine affected population estimate 2025 (%) | +| ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | +| Tax-free childcare | [0.7](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) | [0.6](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) | [0.6](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) | 2.8 | +| Extended childcare | [4.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613&uk_local_areas_beta=true) | [2.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) | [2.5](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 4.3 | +| Universal childcare | [1.8](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) | [1.6](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) | [1.7](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 2.6 | +| Targeted childcare | [0.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) | [0.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) | [0.6](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 0.5 | This post has two main sections. The first covers means-tested benefits—such as Universal Credit, legacy programmes, and pension-age benefits—which vary with household income and savings. The second examines non-means-tested benefits, including disability, child, and retirement programmes, which are based on individual circumstances rather than income. For each benefit, the post details eligibility criteria, calculation methods, and how payments differ across the income distribution. @@ -151,7 +151,7 @@ PolicyEngine projects that Universal Credit will cost £79.4 billion in 2025-26, #### Gross salary vs take-home pay at the household level -To show the impact of Universal Credit on household finances, we plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=84661®ion=uk&timePeriod=2025&baseline=1&household=50678) with two 10-year-old children. Abolishing this benefit reduces the household's net income in the low-income range. Figure 2 shows this effect on household net income. +To show the impact of Universal Credit on household finances, we plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=84661®ion=uk&timePeriod=2025&baseline=1&household=50678) with two 10-year-old children. Abolishing this benefit reduces the household's net income in the low-income range. Figure 2 shows this effect on household net income. **Figure 2. Household net income with and without Universal Credit** @@ -167,7 +167,7 @@ DWP [excludes](https://github.com/PolicyEngine/policyengine-uk/blob/master/polic #### Economic analysis -PolicyEngine projects that Housing Benefit will cost [£7.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80663) in 2025-26, 34.5% less than the UK government's estimate of [£11.6 billion](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) for 2025-26. Figure 3 shows the distributional impact of this programme. +PolicyEngine projects that Housing Benefit will cost [£7.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80663) in 2025-26, 34.5% less than the UK government's estimate of [£11.6 billion](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2024) for 2025-26. Figure 3 shows the distributional impact of this programme. ```plotly { @@ -295,7 +295,7 @@ HMRC reduces Tax Credits by 41% of income above the relevant threshold: £7,455 #### Economic analysis -PolicyEngine projects that Tax Credits will cost less than [£1 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80677) in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26. +PolicyEngine projects that Tax Credits will cost less than [£1 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80677) in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26. ### Pension Credit @@ -321,7 +321,7 @@ Pension Credit includes two main components, which we describe in detail below: #### Economic analysis -PolicyEngine projects that Pension Credit will cost [£7.4 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80685) in 2025-26, 23.3% more than the UK government's estimate of [£6.0 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-pensioner-benefits/) for 2025-26. Figure 5 shows the distributional impact of this programme. +PolicyEngine projects that Pension Credit will cost [£7.4 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80685) in 2025-26, 23.3% more than the UK government's estimate of [£6.0 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-pensioner-benefits/) for 2025-26. Figure 5 shows the distributional impact of this programme. ```plotly { @@ -421,7 +421,7 @@ PolicyEngine projects that Pension Credit will cost [£7.4 billion](https://poli #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.pythonReproducibility&reform=1®ion=uk&timePeriod=2025&baseline=80685&household=53633) with a 70-year-old adult. Removing Pension Credit reduces the household’s net income in the low-income range. Figure 6 shows this effect on household net income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.pythonReproducibility&reform=1®ion=uk&timePeriod=2025&baseline=80685&household=53633) with a 70-year-old adult. Removing Pension Credit reduces the household’s net income in the low-income range. Figure 6 shows this effect on household net income. **Figure 6. Household net income with and without Pension Credit** @@ -446,7 +446,7 @@ For 2025, the [daily living](https://github.com/PolicyEngine/policyengine-uk/blo #### Economic analysis -PolicyEngine projects that PIP will cost [£30.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80686) in 2025-26, 6.6% more than the UK government's estimate of [£28.7 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 7 shows the distributional impact of this programme. +PolicyEngine projects that PIP will cost [£30.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80686) in 2025-26, 6.6% more than the UK government's estimate of [£28.7 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 7 shows the distributional impact of this programme. ```plotly { @@ -546,7 +546,7 @@ PolicyEngine projects that PIP will cost [£30.6 billion](https://policyengine.o #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80686&household=53477). When the individual receives the mobility component of PIP, they also receive the disability component of Universal Credit, which raises take-home income compared to the scenario without PIP. At lower income levels, this additional benefit increases household income. As earnings rise and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 8 shows take-home income under both scenarios. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80686&household=53477). When the individual receives the mobility component of PIP, they also receive the disability component of Universal Credit, which raises take-home income compared to the scenario without PIP. At lower income levels, this additional benefit increases household income. As earnings rise and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 8 shows take-home income under both scenarios. **Figure 8. Household net income with and without PIP** @@ -567,7 +567,7 @@ For 2025, the [self-care](https://github.com/PolicyEngine/policyengine-uk/blob/m #### Economic analysis -PolicyEngine projects that Disability Living Allowance will cost [£9.3 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80689) in 2025-26, 24.0% more than the UK government's estimate of [£7.5 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 9 shows the distributional impact of this programme. +PolicyEngine projects that Disability Living Allowance will cost [£9.3 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80689) in 2025-26, 24.0% more than the UK government's estimate of [£7.5 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 9 shows the distributional impact of this programme. ```plotly { @@ -667,7 +667,7 @@ PolicyEngine projects that Disability Living Allowance will cost [£9.3 billion] #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.netIncome&reform=1®ion=uk&timePeriod=2025&baseline=80689&household=53482). When the individual receives the mobility component of Disability Living Allowance (DLA), they also qualify for the disability component of Universal Credit, which increases take-home income compared to the scenario without DLA. At lower income levels, this additional benefit raises household income. As earnings increase and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 10 shows take-home income under both scenarios. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.netIncome&reform=1®ion=uk&timePeriod=2025&baseline=80689&household=53482). When the individual receives the mobility component of Disability Living Allowance (DLA), they also qualify for the disability component of Universal Credit, which increases take-home income compared to the scenario without DLA. At lower income levels, this additional benefit raises household income. As earnings increase and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 10 shows take-home income under both scenarios. **Figure 10. Household net income with and without DLA** @@ -687,7 +687,7 @@ For 2025, the higher rate is £108.55 per week and the lower rate is £72.65 per #### Economic analysis -PolicyEngine projects that Attendance Allowance will cost [£10.2 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80692) in 2025-26, 27.5% more than the UK government's estimate of [£8.0 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 11 shows the distributional impact of this programme. +PolicyEngine projects that Attendance Allowance will cost [£10.2 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80692) in 2025-26, 27.5% more than the UK government's estimate of [£8.0 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-disability-benefits/) for 2025-26. Figure 11 shows the distributional impact of this programme. ```plotly { @@ -787,7 +787,7 @@ PolicyEngine projects that Attendance Allowance will cost [£10.2 billion](https #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80692&household=53560) receiving £5,000 per year in Attendance Allowance. Removing this benefit reduces the household’s net income. Figure 12 shows this effect on household finances. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80692&household=53560) receiving £5,000 per year in Attendance Allowance. Removing this benefit reduces the household’s net income. Figure 12 shows this effect on household finances. **Figure 12. Household net income with and without Attendance Allowance** @@ -809,7 +809,7 @@ The [High Income Child Benefit Charge (HITC)](https://github.com/PolicyEngine/po #### Economic analysis -PolicyEngine projects that Child Benefit will cost [£12.3 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80696) in 2025-26, 1.6% less than the UK government's estimate of [£12.5 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-child-benefit/#:~:text=Child%20benefit%20is%20a%20cash,the%20UK%20in%202023%2D24.) for 2025-26. Figure 13 shows the distributional impact of this programme. +PolicyEngine projects that Child Benefit will cost [£12.3 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80696) in 2025-26, 1.6% less than the UK government's estimate of [£12.5 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-child-benefit/#:~:text=Child%20benefit%20is%20a%20cash,the%20UK%20in%202023%2D24.) for 2025-26. Figure 13 shows the distributional impact of this programme. ```plotly { @@ -909,7 +909,7 @@ PolicyEngine projects that Child Benefit will cost [£12.3 billion](https://poli #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=80696&household=53314) with £10,000 in annual childcare expenses. Removing Child Benefit reduces the household’s net income. Figure 14 shows this effect on household net income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=80696&household=53314) with £10,000 in annual childcare expenses. Removing Child Benefit reduces the household’s net income. Figure 14 shows this effect on household net income. **Figure 14. Household net income with and without Child Benefit** @@ -947,7 +947,7 @@ In Scotland, the Pension Age Winter Heating Payment (PAWHP) has [replaced](https #### Economic analysis -PolicyEngine projects that Winter Fuel Payment will cost less than [£1 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80702) in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26. +PolicyEngine projects that Winter Fuel Payment will cost less than [£1 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80702) in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26. ### Tax-free childcare @@ -962,7 +962,7 @@ In 2025, the government contributes 20% of childcare costs, effectively adding #### Economic analysis -PolicyEngine projects that tax-free childcare will cost [£0.6 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) in 2024-25, in line with the UK government's estimate of [£0.6 billion](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) for 2024-25. Figure 15 shows the distributional effect of this benefit. +PolicyEngine projects that tax-free childcare will cost [£0.6 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) in 2024-25, in line with the UK government's estimate of [£0.6 billion](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) for 2024-25. Figure 15 shows the distributional effect of this benefit. ```plotly { @@ -1062,7 +1062,7 @@ PolicyEngine projects that tax-free childcare will cost [£0.6 billion](https:// #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=73038®ion=uk&timePeriod=2025&baseline=76821&household=51616) with one child aged 3. These households become eligible for Tax-Free Childcare (TFC) when the earner makes at least [£9,516](https://www.gov.uk/tax-free-childcare) per year at age 21 or older. The benefit ends at £100,000, creating a drop in take-home income. This threshold creates a gap between households just above and just below the eligibility cutoff. Figure 16 shows this effect on household net income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=73038®ion=uk&timePeriod=2025&baseline=76821&household=51616) with one child aged 3. These households become eligible for Tax-Free Childcare (TFC) when the earner makes at least [£9,516](https://www.gov.uk/tax-free-childcare) per year at age 21 or older. The benefit ends at £100,000, creating a drop in take-home income. This threshold creates a gap between households just above and just below the eligibility cutoff. Figure 16 shows this effect on household net income. **Figure 16. Household net income with and without TFC** @@ -1084,7 +1084,7 @@ In 2025, the entitlement provides 570 hours per year—equivalent to 15 hours pe #### Economic analysis -PolicyEngine projects that universal childcare entitlement will cost [£1.6 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) in 2024-25, 5.9% less than the UK government's estimate of [£1.7 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 17 shows the distributional impact of this benefit. +PolicyEngine projects that universal childcare entitlement will cost [£1.6 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) in 2024-25, 5.9% less than the UK government's estimate of [£1.7 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 17 shows the distributional impact of this benefit. ```plotly { @@ -1184,7 +1184,7 @@ PolicyEngine projects that universal childcare entitlement will cost [£1.6 bill #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=82975&household=53312) with one child aged 3. Households cannot receive Tax-Free Childcare (TFC) and universal childcare at the same time. Figure 18 shows household net income based on the head's employment income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=82975&household=53312) with one child aged 3. Households cannot receive Tax-Free Childcare (TFC) and universal childcare at the same time. Figure 18 shows household net income based on the head's employment income. **Figure 18. Household net income with and without universal childcare entitlement** @@ -1207,7 +1207,7 @@ The funding rates vary by age: £11.22 per hour for children under 2, £8.28 per #### Economic analysis -PolicyEngine projects that extended childcare entitlement will cost [£2.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) in 2024-25, 4.0% more than the UK government's estimate of [£2.5 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 19 shows the distributional effect of this benefit. +PolicyEngine projects that extended childcare entitlement will cost [£2.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) in 2024-25, 4.0% more than the UK government's estimate of [£2.5 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 19 shows the distributional effect of this benefit. ```plotly { @@ -1307,7 +1307,7 @@ PolicyEngine projects that extended childcare entitlement will cost [£2.6 billi #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80613&household=53312) with one child aged 3. Households become eligible for extended childcare entitlement when earning at least [£9,516 annually](https://www.gov.uk/free-childcare-if-working/check-youre-eligible) for adults aged 21 or over. The benefit ends at £100,000, causing a drop in take-home pay. Households earning above this threshold lose eligibility entirely. Figure 20 shows this effect on household net income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=80613&household=53312) with one child aged 3. Households become eligible for extended childcare entitlement when earning at least [£9,516 annually](https://www.gov.uk/free-childcare-if-working/check-youre-eligible) for adults aged 21 or over. The benefit ends at £100,000, causing a drop in take-home pay. Households earning above this threshold lose eligibility entirely. Figure 20 shows this effect on household net income. **Figure 20. Household net income with and without extended childcare entitlement** @@ -1328,7 +1328,7 @@ In 2025, the programme provides 570 hours per year (15 hours per week over 38 we #### Economic analysis -PolicyEngine projects that targeted childcare entitlement will cost [£0.5 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) in 2024-25, in line with the UK government's estimate of [£0.6 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 21 shows the distributional effect of this benefit. +PolicyEngine projects that targeted childcare entitlement will cost [£0.5 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) in 2024-25, in line with the UK government's estimate of [£0.6 billion](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) for 2024-25. Figure 21 shows the distributional effect of this benefit. ```plotly { @@ -1428,7 +1428,7 @@ PolicyEngine projects that targeted childcare entitlement will cost [£0.5 billi #### Gross salary vs take-home pay at the household level -We plot net income for a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=82974&household=53310) with one child aged 2. Figure 22 shows household net income based on the head’s employment income. +We plot net income for a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=82974&household=53310) with one child aged 2. Figure 22 shows household net income based on the head’s employment income. **Figure 22. Household net income with and without targeted childcare entitlement** diff --git a/src/posts/articles/uk-calibration-2023-q4.ipynb b/src/posts/articles/uk-calibration-2023-q4.ipynb index ddd33d2d3..2170ad6b3 100644 --- a/src/posts/articles/uk-calibration-2023-q4.ipynb +++ b/src/posts/articles/uk-calibration-2023-q4.ipynb @@ -2546,7 +2546,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "We've also made all our calibration validation results available in an interactive dashboard, which is available on GitHub [here](https://github.com/nikhilwoodruff/policyengine-uk-validation) (screenshot below). We welcome feedback or comments on our approach- feel free to [get in touch](https://policyengine.org/uk/contact).\n", + "We've also made all our calibration validation results available in an interactive dashboard, which is available on GitHub [here](https://github.com/nikhilwoodruff/policyengine-uk-validation) (screenshot below). We welcome feedback or comments on our approach- feel free to [get in touch](https://legacy.policyengine.org/uk/contact).\n", "\n", "![Figure 3: PolicyEngine UK's calibration validation dashboard](https://github.com/PolicyEngine/policyengine-app/assets/35577657/c4d0e71e-cc6b-4191-aaaa-5970f4ac3cc9)" ] diff --git a/src/posts/articles/uk-carbon-tax-dividend.md b/src/posts/articles/uk-carbon-tax-dividend.md index ae37ec03f..a7e1377e4 100644 --- a/src/posts/articles/uk-carbon-tax-dividend.md +++ b/src/posts/articles/uk-carbon-tax-dividend.md @@ -10,10 +10,10 @@ In this policy experiment, the government applies carbon taxes at £100 and £20 The following table presents the total revenue generated from carbon taxation under each scenario in 2026-27: -| Carbon tax rate | Total revenue | Dividend amount (per person per week) | -| :-------------- | :---------------------------------------------------------------------------------------------------------------------------------------- | :------------------------------------ | -| £100/tonne | [£67.3 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=75542®ion=uk&timePeriod=2026&baseline=1) | £19 | -| £200/tonne | [£134.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92939®ion=uk&timePeriod=2026&baseline=1) | £37 | +| Carbon tax rate | Total revenue | Dividend amount (per person per week) | +| :-------------- | :----------------------------------------------------------------------------------------------------------------------------------------------- | :------------------------------------ | +| £100/tonne | [£67.3 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=75542®ion=uk&timePeriod=2026&baseline=1) | £19 | +| £200/tonne | [£134.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92939®ion=uk&timePeriod=2026&baseline=1) | £37 | The Department for Environment, Food & Rural Affairs [reports](https://www.gov.uk/government/statistics/uks-carbon-footprint/carbon-footprint-for-the-uk-and-england-to-2022) greenhouse gas emissions associated with consumption in 2022 at 740 MtCO2e. At the rate of £100/tonne, the revenue estimation in 2022 would be £74 billion. @@ -503,12 +503,12 @@ As illustrated in Figures 3 and 4, the distribution indicates that lower income This section examines how carbon dividend policies affect poverty rates across different demographic groups. Poverty is measured as absolute before housing costs. The following table shows the relative change in poverty rates by demographic group for each scenario in 2026-27: -| Demographic group | £100/tonne | £200/tonne | -| :----------------- | :-------------------------------------------------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------------------- | -| Children | [\-0.5%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.7%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | -| Working-age adults | [\-0.2%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.3%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | -| Seniors | [\-0.6%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.6%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | -| All populations | [\-0.3%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.5%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Demographic group | £100/tonne | £200/tonne | +| :----------------- | :--------------------------------------------------------------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------------------------------------------------------- | +| Children | [\-0.5%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.7%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Working-age adults | [\-0.2%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Seniors | [\-0.6%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.6%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| All populations | [\-0.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-0.5%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | The carbon dividend policy shows poverty-reducing effects across all demographic groups, with the largest improvements for children at £200/tonne (-0.7%). The £200/tonne rate produces more poverty reduction. @@ -516,11 +516,11 @@ The carbon dividend policy shows poverty-reducing effects across all demographic This section analyses how carbon dividend policies affect income inequality using standard inequality measures. The following table presents the relative change in inequality measures for each scenario in 2026-27: -| Inequality measure | £100/tonne | £200/tonne | -| :----------------- | :-------------------------------------------------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------------------- | -| Gini index | [\-0.2%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\+0.4%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | -| Top 10% share | [\-1.2%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-1.2%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | -| Top 1% share | [\-0.7%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-1.1%](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Inequality measure | £100/tonne | £200/tonne | +| :----------------- | :--------------------------------------------------------------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------------------------------------------------------- | +| Gini index | [\-0.2%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\+0.4%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Top 10% share | [\-1.2%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-1.2%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | +| Top 1% share | [\-0.7%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92873®ion=uk&timePeriod=2026&baseline=1) | [\-1.1%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=92996®ion=uk&timePeriod=2026&baseline=1) | The analysis shows that the Gini coefficient decreases by 0.2% at £100/tonne but increases by 0.4% at £200/tonne. The income share of the top 10% and top 1% declines under both scenarios. @@ -530,7 +530,7 @@ This section presents a geographical analysis of how carbon dividend policies af ### £100/tonne carbon dividend: -The £100/tonne carbon dividend [shows](https://policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=92873®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true) geographically concentrated benefits, with urban constituencies experiencing the largest gains. +The £100/tonne carbon dividend [shows](https://legacy.policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=92873®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true) geographically concentrated benefits, with urban constituencies experiencing the largest gains. **Figure 5**: £100/tonne carbon dividend constituency map @@ -665,7 +665,7 @@ The regional breakdown shows that England benefits most from the £100/tonne car ### £200/tonne carbon dividend: -The higher carbon tax rate [amplifies](https://policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=92996®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true) the geographical patterns, with more constituencies experiencing gains. +The higher carbon tax rate [amplifies](https://legacy.policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=92996®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true) the geographical patterns, with more constituencies experiencing gains. **Figure 7**: £200/tonne carbon dividend constituency map @@ -807,4 +807,4 @@ Our analysis shows that carbon dividend policies would benefit approximately 71% Lower-income households in deciles 1-6 would see net income gains under both scenarios, while higher-income households in deciles 8-10 would experience net losses. The geographic distribution reveals 265 constituencies gaining at £100/tonne and 294 at £200/tonne in 2026-27. -We invite you to explore the [PolicyEngine webapp](https://policyengine.org/) to model your own customised carbon tax and dividend reforms. +We invite you to explore the [PolicyEngine webapp](https://legacy.policyengine.org/) to model your own customised carbon tax and dividend reforms. diff --git a/src/posts/articles/uk-childcare-report.md b/src/posts/articles/uk-childcare-report.md index 6b0cb2806..360b8c059 100644 --- a/src/posts/articles/uk-childcare-report.md +++ b/src/posts/articles/uk-childcare-report.md @@ -14,12 +14,12 @@ Table 1 compares PolicyEngine’s estimates of the budgetary impact of the main **Table 1. Budgetary estimates for childcare programmes (PolicyEngine vs government)** -| Programme | PolicyEngine estimate 2025 (£bn) | PolicyEngine estimate 2024 (£bn) | Government report 2024 (£bn) | Relative error in estimate 2024 (%) | -| ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ----------------------------------- | -| Tax-Free Childcare | [0.7](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) | [0.6](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) | [0.6](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) | -0.7 | -| Extended childcare | [4.4](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613&uk_local_areas_beta=true) | [2.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) | [2.5](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 3.8 | -| Universal childcare | [1.8](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) | [1.6](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) | [1.7](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | -5.9 | -| Targeted childcare | [0.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) | [0.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) | [0.6](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | -10.0 | +| Programme | PolicyEngine estimate 2025 (£bn) | PolicyEngine estimate 2024 (£bn) | Government report 2024 (£bn) | Relative error in estimate 2024 (%) | +| ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ----------------------------------- | +| Tax-Free Childcare | [0.7](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) | [0.6](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83892) | [0.6](https://www.gov.uk/government/statistics/tax-free-childcare-statistics-september-2024) | -0.7 | +| Extended childcare | [4.4](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613&uk_local_areas_beta=true) | [2.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83897&uk_local_areas_beta=true) | [2.5](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | 3.8 | +| Universal childcare | [1.8](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) | [1.6](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2024&baseline=83887) | [1.7](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | -5.9 | +| Targeted childcare | [0.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) | [0.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2024&baseline=83888) | [0.6](https://skillsfunding.service.gov.uk/view-latest-funding/national-funding-allocations/DSG/2024-to-2025) | -10.0 | Table 2 compares PolicyEngine’s estimates of programme caseloads for the main childcare programmes with those reported by the government. @@ -70,7 +70,7 @@ Finally, for eligible households, we [calculate](https://github.com/PolicyEngine #### Gross salary vs take-home pay at the household level -To show the impact of TFC on household finances, we start with an example of a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=73038®ion=uk&timePeriod=2025&baseline=76821&household=51616) with one child aged 3. These households become eligible for TFC when the earner is aged 21 or over and earning at least [£9,516](https://www.gov.uk/tax-free-childcare) annually. The benefit continues until £100,000, where eligibility ends, creating a decline in take-home pay. This creates a divergence between those receiving and not receiving TFC at higher income levels, as shown in Figure 1. +To show the impact of TFC on household finances, we start with an example of a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=73038®ion=uk&timePeriod=2025&baseline=76821&household=51616) with one child aged 3. These households become eligible for TFC when the earner is aged 21 or over and earning at least [£9,516](https://www.gov.uk/tax-free-childcare) annually. The benefit continues until £100,000, where eligibility ends, creating a decline in take-home pay. This creates a divergence between those receiving and not receiving TFC at higher income levels, as shown in Figure 1. **Figure 1. Household net income with and without Tax-Free Childcare** @@ -82,7 +82,7 @@ This decline at £100,000 creates an earnings dead zone, which is the width of t #### Budgetary and distributional impacts -PolicyEngine [projects](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) that the UK government will spend £0.7 billion on Tax-Free Childcare in 2025. Figure 2 shows the distributional impact of this programme: +PolicyEngine [projects](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82972) that the UK government will spend £0.7 billion on Tax-Free Childcare in 2025. Figure 2 shows the distributional impact of this programme: ```plotly { @@ -321,7 +321,7 @@ We [determine](https://github.com/PolicyEngine/policyengine-uk/tree/20ed1a9d77a3 #### Gross salary vs take-home pay at the household level -To show the impact of extended childcare entitlement on household finances, we start with an example of a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.pythonReproducibility&reform=1®ion=uk&timePeriod=2025&baseline=84515&household=53312) with one child aged 3. These households become eligible for extended childcare when earning at least [£9,516 annually](https://www.gov.uk/free-childcare-if-working/check-youre-eligible) for those aged 21 or over. The benefit continues until £100,000, where eligibility ends, creating a decline in take-home pay. This creates a divergence between those receiving and not receiving extended childcare at higher income levels, as shown in Figure 5. +To show the impact of extended childcare entitlement on household finances, we start with an example of a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.pythonReproducibility&reform=1®ion=uk&timePeriod=2025&baseline=84515&household=53312) with one child aged 3. These households become eligible for extended childcare when earning at least [£9,516 annually](https://www.gov.uk/free-childcare-if-working/check-youre-eligible) for those aged 21 or over. The benefit continues until £100,000, where eligibility ends, creating a decline in take-home pay. This creates a divergence between those receiving and not receiving extended childcare at higher income levels, as shown in Figure 5. **Figure 5. Household net income with and without extended childcare** @@ -331,7 +331,7 @@ To show the impact of extended childcare entitlement on household finances, we s #### Budgetary and distributional impacts -PolicyEngine [projects](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613) that the UK government will spend £4.4 billion on extended childcare entitlement in 2025. Figure 6 shows the distributional impact of this programme: +PolicyEngine [projects](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80613) that the UK government will spend £4.4 billion on extended childcare entitlement in 2025. Figure 6 shows the distributional impact of this programme: ```plotly { @@ -545,7 +545,7 @@ We determine the weekly hours based on the child's age and apply the funding rat #### Gross salary vs take-home pay at the household level -To show how the universal childcare entitlement affects household finances, we examine a [single-earner household](https://policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=82975&household=53312) with one child aged 3. The household cannot [claim](https://www.childcarechoices.gov.uk/combining-schemes) both universal childcare and Tax-Free Childcare at the same time. Figure 9 shows how net income changes with the head of household’s earnings under each option. +To show how the universal childcare entitlement affects household finances, we examine a [single-earner household](https://legacy.policyengine.org/uk/household?reform=1&focus=householdOutput.earnings®ion=uk&timePeriod=2025&baseline=82975&household=53312) with one child aged 3. The household cannot [claim](https://www.childcarechoices.gov.uk/combining-schemes) both universal childcare and Tax-Free Childcare at the same time. Figure 9 shows how net income changes with the head of household’s earnings under each option. **Figure 9. Household net income with and without universal childcare** @@ -555,7 +555,7 @@ To show how the universal childcare entitlement affects household finances, we e #### Budgetary and distributional impacts -PolicyEngine [projects](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) that the UK government will spend £1.8 billion on universal childcare entitlement in 2025. Figure 10 shows the distributional impact of this programme: +PolicyEngine [projects](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=82975) that the UK government will spend £1.8 billion on universal childcare entitlement in 2025. Figure 10 shows the distributional impact of this programme: ```plotly { @@ -779,7 +779,7 @@ The UK government [provides](https://github.com/PolicyEngine/policyengine-uk/blo #### Gross salary vs take-home pay at the household level -To show the impact of targeted childcare entitlement on household finances, we start with an example of a [single-earner household](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=82974&household=53310) with one child aged 2. Figure 13 shows household net income based on head employment income. +To show the impact of targeted childcare entitlement on household finances, we start with an example of a [single-earner household](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=1®ion=uk&timePeriod=2025&baseline=82974&household=53310) with one child aged 2. Figure 13 shows household net income based on head employment income. **Figure 13. Household net income with and without targeted childcare** @@ -789,7 +789,7 @@ To show the impact of targeted childcare entitlement on household finances, we s #### Budgetary and distributional impacts -PolicyEngine [projects](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) that the UK government will spend £0.5 billion on targeted childcare entitlement in 2025. Figure 14 shows the distributional impact of this programme: +PolicyEngine [projects](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=82974) that the UK government will spend £0.5 billion on targeted childcare entitlement in 2025. Figure 14 shows the distributional impact of this programme: ```plotly { diff --git a/src/posts/articles/uk-household-ai.md b/src/posts/articles/uk-household-ai.md index 43f7c5343..f86bd60fa 100644 --- a/src/posts/articles/uk-household-ai.md +++ b/src/posts/articles/uk-household-ai.md @@ -2,13 +2,13 @@ PolicyEngine has developed a new artificial intelligence feature that transforms
-Users frequently encounter intricate calculations spanning multiple programmes, each with distinct thresholds, phase-outs, and dependencies. Our solution combines PolicyEngine’s open-source rules engine with artificial intelligence to explain these calculations in plain language, building on our [previous work applying AI to policy analysis](https://policyengine.org/uk/research/gpt-analysis). +Users frequently encounter intricate calculations spanning multiple programmes, each with distinct thresholds, phase-outs, and dependencies. Our solution combines PolicyEngine’s open-source rules engine with artificial intelligence to explain these calculations in plain language, building on our [previous work applying AI to policy analysis](https://legacy.policyengine.org/uk/research/gpt-analysis). # Technical architecture The system integrates PolicyEngine’s tax-benefit rules with Anthropic’s Claude 3.5 Sonnet API. When calculating programme amounts like Universal Credit or Income Tax, PolicyEngine processes thousands of intermediate calculations involving household income, deductions, and other eligibility factors. Our new explanation system passes these complex intermediate calculations to the AI system, which generates natural language explanations. -For example, consider [an individual earning £15,000](https://policyengine.org/uk/household?focus=householdOutput.netIncome&household=50185). PolicyEngine calculates that they pay £486 in Income Tax. Users can now click a tooltip followed by an “**Explain with AI ✨**” button to receive a comprehensive explanation of this amount, including the Personal Allowance and potential changes that could affect their tax. +For example, consider [an individual earning £15,000](https://legacy.policyengine.org/uk/household?focus=householdOutput.netIncome&household=50185). PolicyEngine calculates that they pay £486 in Income Tax. Users can now click a tooltip followed by an “**Explain with AI ✨**” button to receive a comprehensive explanation of this amount, including the Personal Allowance and potential changes that could affect their tax. The AI system analyses both final outcomes and the intermediate calculations contributing to them. Many variables in PolicyEngine’s system involve dozens of intermediate steps, calculated at both monthly and annual levels. This new feature makes these calculation chains transparent and comprehensible. @@ -20,7 +20,7 @@ Following PolicyEngine’s existing policy analysis framework, the explanations # Development roadmap -Having launched this feature in the PolicyEngine web app, we will extend it to [API](https://policyengine.org/uk/api) customers in Q1 2025. PolicyEngine welcomes feedback on improving accessibility across user groups as we continue development. +Having launched this feature in the PolicyEngine web app, we will extend it to [API](https://legacy.policyengine.org/uk/api) customers in Q1 2025. PolicyEngine welcomes feedback on improving accessibility across user groups as we continue development. --- diff --git a/src/posts/articles/uk-pip-reforms.md b/src/posts/articles/uk-pip-reforms.md index 3967bb70b..af9cb5f94 100644 --- a/src/posts/articles/uk-pip-reforms.md +++ b/src/posts/articles/uk-pip-reforms.md @@ -18,7 +18,7 @@ DWP qualifies people for PIP based on a [points system](https://www.legislation. | Daily living part | £72.65 | £108.55 | | Mobility part | £28.70 | £75.75 | -We uprate these elements with inflation, projecting that by 2029, the daily living part will be [£80.31 (lower)](https://policyengine.org/uk/policy?reform=1&focus=gov.dwp.pip.daily_living.standard) and [£119.99 (higher)](https://policyengine.org/uk/policy?reform=1&focus=gov.dwp.pip.daily_living.enhanced) per week. +We uprate these elements with inflation, projecting that by 2029, the daily living part will be [£80.31 (lower)](https://legacy.policyengine.org/uk/policy?reform=1&focus=gov.dwp.pip.daily_living.standard) and [£119.99 (higher)](https://legacy.policyengine.org/uk/policy?reform=1&focus=gov.dwp.pip.daily_living.enhanced) per week. ## The reform diff --git a/src/posts/articles/uk-spi-validation.ipynb b/src/posts/articles/uk-spi-validation.ipynb index 3979371de..d63c34618 100644 --- a/src/posts/articles/uk-spi-validation.ipynb +++ b/src/posts/articles/uk-spi-validation.ipynb @@ -58,7 +58,7 @@ "1. Cases where an individual near the Personal Allowance taper value who claims Gift Aid receives a full Personal Allowance of £12,500 within the SPI model. The SPI model's Gift Aid variable signifies the amount an individual deducts due to Gift Aid donations, while PolicyEngine's represents an individual's total Gift Aid-eligible donations. We then calculate the indivdual's deduction amount from this value. This error represents 738 records (0.1% of total).\n", "\n", "## Conclusion\n", - "PolicyEngine's UK model shows a high level of parity with the SPI's 2020/21 data, with almost 93% of records with the same inputs returning the same total income tax calculation. While some discrepancies exist, they are limited in scope and often attributable to either testability limitations within the SPI's structure or to inputs that the SPI has not made publicly available. This validation exercise builds upon our previous validations, such as our [Autumn 2023 model calibration](https://policyengine.org/uk/research/uk-calibration-2023-q4). We welcome questions and comments on our findings or methodology - please feel free to [get in touch](mailto:contact@policyengine.org)." + "PolicyEngine's UK model shows a high level of parity with the SPI's 2020/21 data, with almost 93% of records with the same inputs returning the same total income tax calculation. While some discrepancies exist, they are limited in scope and often attributable to either testability limitations within the SPI's structure or to inputs that the SPI has not made publicly available. This validation exercise builds upon our previous validations, such as our [Autumn 2023 model calibration](https://legacy.policyengine.org/uk/research/uk-calibration-2023-q4). We welcome questions and comments on our findings or methodology - please feel free to [get in touch](mailto:contact@policyengine.org)." ] }, { diff --git a/src/posts/articles/uk-taxes-post.md b/src/posts/articles/uk-taxes-post.md index 02fb88d23..817535149 100644 --- a/src/posts/articles/uk-taxes-post.md +++ b/src/posts/articles/uk-taxes-post.md @@ -8,15 +8,15 @@ Table 1 below summarises key metrics for each tax in the UK system, comparing Po **Table 1: Summary of UK tax revenue estimates for 2025-26 (£ billions)** -| Programme | PolicyEngine | Government | Agency | Difference | -| ----------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | ---------- | -| Income tax | [322.2](https://gist.github.com/vahid-ahmadi/505f1a571d3e71e594a4565b75380c56) | [328.7](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/income-tax/) | OBR | -2.0% | -| National Insurance | [179.7](https://gist.github.com/vahid-ahmadi/699656a3705a44c817473d06c7f5d8f6) | [198.8](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/national-insurance-contributions-nics/) | OBR | -9.6% | -| Capital gains tax | [17.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79852) | [16.2](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/capital-gains-tax/) | OBR | +6.8% | -| VAT | [198.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79853) | [182.1](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/vat/) | OBR | +9.1% | -| Fuel duty | [28.3](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79854) | [27.3](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/fuel-duties/) | OBR | +3.7% | -| Property transaction taxes | [12.5](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=81619) | [15.1](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/property-transaction-taxes/) | OBR | -17.2% | -| Business rates (England only) | [24.3](https://gist.github.com/vahid-ahmadi/1d2f4af86a1f171b8339b860beb4cc37) | [27.8](https://www.gov.uk/government/statistics/national-non-domestic-rates-collected-by-councils-in-england-forecast-2025-to-2026/national-non-domestic-rates-collected-by-councils-in-england-forecast-for-2025-to-2026#:~:text=Local%20authorities%20estimate%20the%20non,scheme%20are%20taken%20into%20consideration.) | DLUHC | -12.6% | +| Programme | PolicyEngine | Government | Agency | Difference | +| ----------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | ---------- | +| Income tax | [322.2](https://gist.github.com/vahid-ahmadi/505f1a571d3e71e594a4565b75380c56) | [328.7](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/income-tax/) | OBR | -2.0% | +| National Insurance | [179.7](https://gist.github.com/vahid-ahmadi/699656a3705a44c817473d06c7f5d8f6) | [198.8](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/national-insurance-contributions-nics/) | OBR | -9.6% | +| Capital gains tax | [17.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79852) | [16.2](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/capital-gains-tax/) | OBR | +6.8% | +| VAT | [198.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79853) | [182.1](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/vat/) | OBR | +9.1% | +| Fuel duty | [28.3](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79854) | [27.3](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/fuel-duties/) | OBR | +3.7% | +| Property transaction taxes | [12.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=81619) | [15.1](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/property-transaction-taxes/) | OBR | -17.2% | +| Business rates (England only) | [24.3](https://gist.github.com/vahid-ahmadi/1d2f4af86a1f171b8339b860beb4cc37) | [27.8](https://www.gov.uk/government/statistics/national-non-domestic-rates-collected-by-councils-in-england-forecast-2025-to-2026/national-non-domestic-rates-collected-by-councils-in-england-forecast-for-2025-to-2026#:~:text=Local%20authorities%20estimate%20the%20non,scheme%20are%20taken%20into%20consideration.) | DLUHC | -12.6% | ## Direct taxes @@ -297,9 +297,9 @@ Capital gains tax is charged on the profit when selling or disposing of an asset Since capital gains are not directly observed in the Family Resources Survey (FRS) data, they are imputed using a joint distribution approach based on data from "[Capital Gains and UK Inequality](https://ideas.repec.org/p/wrk/warwec/1260.html)" paper by Arun Advani and Andy Summers. This dataset provides detailed percentiles of capital gains (p05, p10, p25, p50, p75, p90, p95) across more than 60 income bands, enabling the model to fit a spline to each band's percentiles to create a joint distribution. For each individual in the simulation, the probability of having capital gains is determined by their income band, and if they are modelled to have gains, the amount is randomly sampled from the relevant spline. These values are then uprated from 2017 to present day using the OBR's non-labour income forecast, allowing the model to accurately account for the concentration of capital gains among higher income individuals. **Behavioural responses**: -The PolicyEngine-UK model incorporates behavioural responses through the [`capital_gains_behavioural_response`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/variables/gov/hmrc/capital_gains_tax/responses.py) variable, which captures how individuals change realisation decisions in response to tax changes. This modelling is controlled by an elasticity parameter, which can be adjusted to simulate different levels of taxpayer sensitivity. For more information, you can read [this post](https://policyengine.org/uk/research/behavioural-responses). +The PolicyEngine-UK model incorporates behavioural responses through the [`capital_gains_behavioural_response`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/variables/gov/hmrc/capital_gains_tax/responses.py) variable, which captures how individuals change realisation decisions in response to tax changes. This modelling is controlled by an elasticity parameter, which can be adjusted to simulate different levels of taxpayer sensitivity. For more information, you can read [this post](https://legacy.policyengine.org/uk/research/behavioural-responses). -PolicyEngine projects that the UK will collect [£17.3 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79852) in capital gains tax revenue in 2025, 6.8% more than the OBR's forecast of [£16.2 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/capital-gains-tax/). Figure 3 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£17.3 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79852) in capital gains tax revenue in 2025, 6.8% more than the OBR's forecast of [£16.2 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/capital-gains-tax/). Figure 3 shows the distributional impact of this programme. ```plotly { @@ -421,7 +421,7 @@ The VAT calculation sums the tax from standard-rated items (consumption × 20%) **Data imputation**: The consumption data for VAT calculations comes from the Living Costs and Food Survey (LCFS), which follows the Classification of Individual Consumption by Purpose (COICOP) system. Due to under-reporting in survey data, the calculation is divided by 0.38 to match official HMRC VAT receipts. The model assumes that approximately 50% of consumption is subject to the standard VAT rate, while about 3% is subject to the reduced rate (primarily domestic fuel), as specified by the [`reduced_rate_share`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/vat/reduced_rate_share.yaml) parameter. The remaining consumption is either zero-rated or exempt. Consumption data is uprated using the OBR's Consumer Price Index forecast. -PolicyEngine projects that the UK will collect [£198.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79853) in value added tax (VAT) revenue in 2025, 9.1% more than the OBR's forecast of [£182.1 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/vat/). Figure 4 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£198.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79853) in value added tax (VAT) revenue in 2025, 9.1% more than the OBR's forecast of [£182.1 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/vat/). Figure 4 shows the distributional impact of this programme. ```plotly { @@ -528,7 +528,7 @@ Fuel duty is an excise tax charged on purchases of petrol, diesel and other fuel - **Petrol and diesel rates**: Set at £0.5795 per litre for both petrol and diesel in 2025, defined by the [`petrol_and_diesel`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/fuel_duty/petrol_and_diesel.yaml) parameter. -PolicyEngine projects that the UK will collect [£28.3 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79854) in fuel duty revenue in 2025, 3.7% more than the OBR's forecast of [£27.3 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/fuel-duties/). Figure 5 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£28.3 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79854) in fuel duty revenue in 2025, 3.7% more than the OBR's forecast of [£27.3 billion](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/fuel-duties/). Figure 5 shows the distributional impact of this programme. ```plotly { @@ -653,7 +653,7 @@ SDLT is a tax paid when purchasing property over certain price thresholds in Eng - **Purchase rates**: Rates apply in bands from the nil-rate band to portions over higher thresholds, defined by non-residential purchase parameters in [`purchase.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/stamp_duty/non_residential/purchase.yaml). - **Rental agreements**: SDLT applies to the net present value of commercial lease rent above a threshold, defined by non-residential rent parameters in [`rent.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/stamp_duty/non_residential/rent.yaml). -PolicyEngine projects that the UK will collect [£11.4 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79870) in stamp duty revenue in 2025. Figure 6 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£11.4 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=79870) in stamp duty revenue in 2025. Figure 6 shows the distributional impact of this programme. ```plotly { @@ -771,7 +771,7 @@ Scotland uses a different property transaction tax than England and Northern Ire - **Purchase rates**: Rates apply in bands from the nil-rate band to portions over higher thresholds, defined by specific band parameters in [`non_residential.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/revenue_scotland/lbtt/non_residential.yaml). - **Rental agreements**: LBTT applies to the net present value of commercial lease rent above a threshold, defined by specific rent parameters in [`rent.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/revenue_scotland/lbtt/rent.yaml). -PolicyEngine projects that the UK will collect [£669.0 million](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80006) in land and buildings transaction tax revenue in 2025. Figure 7 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£669.0 million](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=1®ion=uk&timePeriod=2025&baseline=80006) in land and buildings transaction tax revenue in 2025. Figure 7 shows the distributional impact of this programme. ```plotly { @@ -888,7 +888,7 @@ Wales has its own property transaction tax system. Land Transaction Tax (LTT) is - **Purchase rates**: Rates apply in bands from the nil-rate band to portions over higher thresholds, defined by specific band parameters in [`non_residential.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/wra/land_transaction_tax/non_residential.yaml). - **Rental agreements**: LTT applies to the net present value of commercial lease rent with threshold and rate structures, defined by specific rental parameters in [`rent.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/wra/land_transaction_tax/rent.yaml). -PolicyEngine projects that the UK will collect [£388.3 million](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80023) in land transaction tax revenue in 2025. Figure 8 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£388.3 million](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80023) in land transaction tax revenue in 2025. Figure 8 shows the distributional impact of this programme. ```plotly { @@ -995,7 +995,7 @@ The UK imposes annual taxes on property occupation, including business rates for - **Corporate tax on non-domestic properties**: Calculated as a percentage (the multiplier) of a property's assessed rateable value, defined in business rates statistics parameters in [`statistics.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/business_rates/statistics.yaml). - **Regional variation (England, Scotland, Wales, Northern Ireland)**: Each nation sets its own multipliers and relief schemes, creating regional differences, defined in region-specific sections within [`statistics.yaml`](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/business_rates/statistics.yaml). -PolicyEngine projects that the UK will collect [£24.3 billion](https://policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80029) in business rates revenue in 2025, 12.6% less than the UK government's estimate of [£27.8 billion](https://www.gov.uk/government/statistics/national-non-domestic-rates-collected-by-councils-in-england-forecast-2025-to-2026/national-non-domestic-rates-collected-by-councils-in-england-forecast-for-2025-to-2026#:~:text=Local%20authorities%20estimate%20the%20non,scheme%20are%20taken%20into%20consideration.) for England alone in 2025-2026. Figure 9 shows the distributional impact of this programme. +PolicyEngine projects that the UK will collect [£24.3 billion](https://legacy.policyengine.org/uk/policy?reform=1&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=80029) in business rates revenue in 2025, 12.6% less than the UK government's estimate of [£27.8 billion](https://www.gov.uk/government/statistics/national-non-domestic-rates-collected-by-councils-in-england-forecast-2025-to-2026/national-non-domestic-rates-collected-by-councils-in-england-forecast-for-2025-to-2026#:~:text=Local%20authorities%20estimate%20the%20non,scheme%20are%20taken%20into%20consideration.) for England alone in 2025-2026. Figure 9 shows the distributional impact of this programme. ```plotly { diff --git a/src/posts/articles/uk-the-new-policyengine.md b/src/posts/articles/uk-the-new-policyengine.md index a9c93f469..62609a35d 100644 --- a/src/posts/articles/uk-the-new-policyengine.md +++ b/src/posts/articles/uk-the-new-policyengine.md @@ -20,7 +20,7 @@ If you’ve used PolicyEngine before, we think you’ll find the new version eas For more information: -1. [Read our companion blog post](https://policyengine.org/uk/blog/2023-01-12-from-idea-to-impact-scoring-a-policy-reform-on-the-new-policyengine-uk) which walks through how to use the new app, using the [Child Benefit High Income Tax Charge](https://policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=5®ion=uk&timePeriod=2023&baseline=1) as a case study +1. [Read our companion blog post](https://legacy.policyengine.org/uk/blog/2023-01-12-from-idea-to-impact-scoring-a-policy-reform-on-the-new-policyengine-uk) which walks through how to use the new app, using the [Child Benefit High Income Tax Charge](https://legacy.policyengine.org/uk/policy?focus=policyOutput.netIncome&reform=5®ion=uk&timePeriod=2023&baseline=1) as a case study 1. [Follow us on Twitter](http://twitter.com/thepolicyengine), where we’ll share tips and examples diff --git a/src/posts/articles/uk-two-child-limit.md b/src/posts/articles/uk-two-child-limit.md index 007592763..cfb182cd6 100644 --- a/src/posts/articles/uk-two-child-limit.md +++ b/src/posts/articles/uk-two-child-limit.md @@ -8,7 +8,7 @@ In this analysis, we examine the impact of removing the two-child limit on house ## Household impact -The reform would increase Universal Credit or Child Tax Credit payments for affected families by removing the restriction on child elements. For a sample household of two parents with three children aged 3, 5, and 7 in 2026-27, Figure 1 [shows](https://policyengine.org/uk/household?focus=householdOutput.earnings&reform=93219®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true&household=56008) how household net income changes across different employment income levels. +The reform would increase Universal Credit or Child Tax Credit payments for affected families by removing the restriction on child elements. For a sample household of two parents with three children aged 3, 5, and 7 in 2026-27, Figure 1 [shows](https://legacy.policyengine.org/uk/household?focus=householdOutput.earnings&reform=93219®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true&household=56008) how household net income changes across different employment income levels. **Figure 1: Household net income by employment income** @@ -154,7 +154,7 @@ By income decile, removing the two-child limit would provide the largest relativ }, "images": [ { - "source": "https://policyengine.org/images/logos/policyengine/blue.png", + "source": "https://legacy.policyengine.org/images/logos/policyengine/blue.png", "x": 1, "y": -0.15, "xref": "paper", @@ -313,27 +313,27 @@ Figure 3 shows that 4.6% of the population would see income gains from removing By age group, removing the two-child limit would reduce poverty rates most for children across all years. Using the absolute poverty measure before housing costs, the child poverty rate would fall by 13.6% in 2025-26 and by 15.5% in 2029-30, while the overall poverty rate would decline by 6.5% in 2025-26 and by 7.3% in 2029-30. -| Year | Children | All | -| ---- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -| 2025 | [-13.6%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2025&baseline=1) | [-6.5%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2025&baseline=1) | -| 2026 | [-15.7%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | [-7.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | -| 2027 | [-15.8%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2027&baseline=1) | [-7.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2027&baseline=1) | -| 2028 | [-16.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2028&baseline=1) | [-7.8%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2028&baseline=1) | -| 2029 | [-15.5%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2029&baseline=1) | [-7.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2029&baseline=1) | +| Year | Children | All | +| ---- | -------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | +| 2025 | [-13.6%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2025&baseline=1) | [-6.5%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2025&baseline=1) | +| 2026 | [-15.7%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | [-7.4%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | +| 2027 | [-15.8%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2027&baseline=1) | [-7.4%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2027&baseline=1) | +| 2028 | [-16.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2028&baseline=1) | [-7.8%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2028&baseline=1) | +| 2029 | [-15.5%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2029&baseline=1) | [-7.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219®ion=uk&timePeriod=2029&baseline=1) | ## Inequality impact Removing the two-child limit in 2026-27 would reduce income inequality. The Gini index would fall by 0.6%, while the top 10% income share would decrease by 0.1% and the top 1% income share would decline by 0.1%. -| Metric | Change | -| ------------- | --------------------------------------------------------------------------------------------------------------------------------- | -| Gini index | [-0.6%](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | -| Top 10% share | [-0.1%](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | -| Top 1% share | [-0.1%](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | +| Metric | Change | +| ------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | +| Gini index | [-0.6%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | +| Top 10% share | [-0.1%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | +| Top 1% share | [-0.1%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=93219®ion=uk&timePeriod=2026&baseline=1) | ## Geographic impact -The impact of removing the two-child limit [varies](https://policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=93219®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true&household=56008) across parliamentary constituencies, as shown in Figure 4. +The impact of removing the two-child limit [varies](https://legacy.policyengine.org/uk/policy?focus=policyOutput.constituencies.relative&reform=93219®ion=uk&timePeriod=2026&baseline=1&uk_local_areas_beta=true&household=56008) across parliamentary constituencies, as shown in Figure 4. **Figure 4: Geographic distribution of relative income change by parliamentary constituency** @@ -345,22 +345,22 @@ The constituencies experiencing the largest relative income gains include Bradfo Removing the two-child benefit limit would cost £2.7 billion in 2025-26, rising to £3.1 billion by 2029-30. The reform would reduce absolute child poverty (before housing costs) by 13.6% and overall absolute poverty by 6.5% in 2025-26. -We invite you to explore the [PolicyEngine webapp](https://policyengine.org/) to model your own customised reforms. +We invite you to explore the [PolicyEngine webapp](https://legacy.policyengine.org/) to model your own customised reforms. ## Appendix: Cost estimates by organisation and year The following table compares cost estimates for abolishing the two-child limit from different organisations. -| Year | PolicyEngine | IFS | JRF | Resolution Foundation | -| ----------------- | --------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---------- | --------------------- | -| 2024-25 | — | — | — | £2.5bn | -| 2025-26 | [£2.7bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2025&baseline=1) | — | £2.7bn[^1] | — | -| 2026-27 | [£2.8bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2026&baseline=1) | — | — | — | -| 2027-28 | [£2.9bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2027&baseline=1) | — | — | — | -| 2028-29 | [£3.0bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2028&baseline=1) | — | — | — | -| 2029-30 | [£3.1bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2029&baseline=1) | — | £2.8bn[^2] | — | -| Long run | — | £2.5bn[^3] | — | — | -| Full coverage[^4] | — | — | — | £3.6bn | +| Year | PolicyEngine | IFS | JRF | Resolution Foundation | +| ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---------- | --------------------- | +| 2024-25 | — | — | — | £2.5bn | +| 2025-26 | [£2.7bn](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2025&baseline=1) | — | £2.7bn[^1] | — | +| 2026-27 | [£2.8bn](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2026&baseline=1) | — | — | — | +| 2027-28 | [£2.9bn](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2027&baseline=1) | — | — | — | +| 2028-29 | [£3.0bn](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2028&baseline=1) | — | — | — | +| 2029-30 | [£3.1bn](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219®ion=uk&timePeriod=2029&baseline=1) | — | £2.8bn[^2] | — | +| Long run | — | £2.5bn[^3] | — | — | +| Full coverage[^4] | — | — | — | £3.6bn | [^1]: JRF estimate includes both two-child limit and benefit cap removal. Source: JRF analysis using IPPR tax-benefit model (Parkes et al 2025). JRF's earlier estimate from May 2025 showed £2.0bn for two-child limit only in 2025/26 diff --git a/src/posts/articles/uk-year-in-review-2024.md b/src/posts/articles/uk-year-in-review-2024.md index 03cc706af..16f26642d 100644 --- a/src/posts/articles/uk-year-in-review-2024.md +++ b/src/posts/articles/uk-year-in-review-2024.md @@ -1,4 +1,4 @@ -In 2024, PolicyEngine UK made significant strides in democratising policy analysis through technological innovation and comprehensive coverage of major policy developments. Together with our [achievements in the US](https://policyengine.org/us/research/us-year-in-review-2024), we've expanded the frontier of evidence-based policymaking on both sides of the Atlantic. Here’s a detailed look at our achievements and impact this year. +In 2024, PolicyEngine UK made significant strides in democratising policy analysis through technological innovation and comprehensive coverage of major policy developments. Together with our [achievements in the US](https://legacy.policyengine.org/us/research/us-year-in-review-2024), we've expanded the frontier of evidence-based policymaking on both sides of the Atlantic. Here’s a detailed look at our achievements and impact this year.
@@ -8,11 +8,11 @@ Our platform underwent major technological advances to enhance both capability a ### Behavioural response modelling -We introduced sophisticated [behavioural response modelling](https://policyengine.org/uk/research/behavioural-responses) for both labour supply and capital gains, enabling more nuanced analysis of how policy changes influence individual economic decisions. This advancement allows users to better understand the dynamic effects of tax and benefit reforms. +We introduced sophisticated [behavioural response modelling](https://legacy.policyengine.org/uk/research/behavioural-responses) for both labour supply and capital gains, enabling more nuanced analysis of how policy changes influence individual economic decisions. This advancement allows users to better understand the dynamic effects of tax and benefit reforms. ### AI-powered explanations -Our new [AI-powered tax and benefit explanations](https://policyengine.org/uk/research/uk-household-ai) break down complex calculations into clear, understandable language. This feature makes policy analysis more accessible to users regardless of their technical background. +Our new [AI-powered tax and benefit explanations](https://legacy.policyengine.org/uk/research/uk-household-ai) break down complex calculations into clear, understandable language. This feature makes policy analysis more accessible to users regardless of their technical background. ![](https://cdn-images-1.medium.com/max/2000/0*JlUblY7SyFZ-6W-2) @@ -26,13 +26,13 @@ The introduction of user accounts now allows researchers and policy analysts to In preparation for the election, we provided detailed analysis of major party manifestos: -- [Labour](https://policyengine.org/uk/research/labour-2024-manifesto) +- [Labour](https://legacy.policyengine.org/uk/research/labour-2024-manifesto) -- [Conservatives](https://policyengine.org/uk/research/conservative-2024-manifesto) +- [Conservatives](https://legacy.policyengine.org/uk/research/conservative-2024-manifesto) -- [Liberal Democrats](https://policyengine.org/uk/research/lib-dem-2024-manifesto) +- [Liberal Democrats](https://legacy.policyengine.org/uk/research/lib-dem-2024-manifesto) -Our innovative [manifesto comparison calculator](https://policyengine.org/uk/2024-manifestos) enabled citizens to understand both personal and societal impacts of each party’s platform. +Our innovative [manifesto comparison calculator](https://legacy.policyengine.org/uk/2024-manifestos) enabled citizens to understand both personal and societal impacts of each party’s platform. ![](https://cdn-images-1.medium.com/max/2198/0*dsVB47oKiySshCUP) @@ -40,7 +40,7 @@ Our innovative [manifesto comparison calculator](https://policyengine.org/uk/202 We delivered comprehensive analysis of both major fiscal events: -Our [Spring Budget 2024](https://policyengine.org/uk/research/uk-2024-spring-budget) assessment covered: +Our [Spring Budget 2024](https://legacy.policyengine.org/uk/research/uk-2024-spring-budget) assessment covered: - National Insurance reforms @@ -50,13 +50,13 @@ Our [Spring Budget 2024](https://policyengine.org/uk/research/uk-2024-spring-bud For the Autumn Budget, we examined: -- [Changes to employer National Insurance](https://policyengine.org/uk/research/autumn-budget-24-employer-ni) +- [Changes to employer National Insurance](https://legacy.policyengine.org/uk/research/autumn-budget-24-employer-ni) -- [Capital Gains Tax reforms](https://policyengine.org/uk/research/cgt-autumn-budget) +- [Capital Gains Tax reforms](https://legacy.policyengine.org/uk/research/cgt-autumn-budget) -- [Private school VAT implementation](https://policyengine.org/uk/research/vat-school-comparison) +- [Private school VAT implementation](https://legacy.policyengine.org/uk/research/vat-school-comparison) -- [Fuel duty freeze continuation](https://policyengine.org/uk/research/autumn-budget-24-fuel-duty) +- [Fuel duty freeze continuation](https://legacy.policyengine.org/uk/research/autumn-budget-24-fuel-duty) ![](https://cdn-images-1.medium.com/max/2000/0*uWZp_57V9_wILFjm) @@ -64,7 +64,7 @@ For the Autumn Budget, we examined: ![](https://cdn-images-1.medium.com/max/2000/0*9jZJm9_IHxclHfdA) -With [support from the Nuffield Foundation](https://policyengine.org/uk/research/uk-nuffield-grant), we’re embarking on several initiatives to further enhance PolicyEngine UK in 2025: +With [support from the Nuffield Foundation](https://legacy.policyengine.org/uk/research/uk-nuffield-grant), we’re embarking on several initiatives to further enhance PolicyEngine UK in 2025: - Creating representative micro-datasets for each local authority and constituency @@ -78,4 +78,4 @@ With [support from the Nuffield Foundation](https://policyengine.org/uk/research ## Learn more -Watch our [end-of-year webinar ](https://www.youtube.com/watch?v=1JAjg_sBZSs)for a comprehensive review of our achievements and platform capabilities. Visit [policyengine.org](https://policyengine.org) to explore our tools and contribute to evidence-based policy discussions. +Watch our [end-of-year webinar ](https://www.youtube.com/watch?v=1JAjg_sBZSs)for a comprehensive review of our achievements and platform capabilities. Visit [policyengine.org](https://legacy.policyengine.org) to explore our tools and contribute to evidence-based policy discussions. diff --git a/src/posts/articles/us-behavioral-responses.md b/src/posts/articles/us-behavioral-responses.md index b7c676f77..30f4215ed 100644 --- a/src/posts/articles/us-behavioral-responses.md +++ b/src/posts/articles/us-behavioral-responses.md @@ -26,15 +26,15 @@ How much people work often depends on their take-home pay per extra hour. The su To see how these elasticities work in practice, let’s examine how a Massachusetts worker earning $50,000 annually would respond to a potential increase in the state income tax rate from 5% to 6%: -| Measure | Baseline | Reform | Difference | -| :----------------------- | :----------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------------------------------------- | :-------------- | -| Hourly wage | $25.00 | $25.00 | \- | -| Annual hours | 2,000 | 2,000 | \- | -| Annual Earnings | $50,000 | $50,000 | \- | -| State Income Tax Rate | 5% | 6% | \+1pp | -| Net income | [$40,034](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=49486) | [$39,598](https://policyengine.org/us/household?focus=householdOutput.netIncome®ion=ma&timePeriod=2025&baseline=2&reform=70814&mode=full&household=49486) | \-$436 (1.09%) | -| Marginal Tax Rate | 24.7% | 25.7% | \+1pp | -| Net Marginal Hourly Wage | $18.83 | $18.58 | \-$0.25 (-1.3%) | +| Measure | Baseline | Reform | Difference | +| :----------------------- | :------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------------------------------------ | :-------------- | +| Hourly wage | $25.00 | $25.00 | \- | +| Annual hours | 2,000 | 2,000 | \- | +| Annual Earnings | $50,000 | $50,000 | \- | +| State Income Tax Rate | 5% | 6% | \+1pp | +| Net income | [$40,034](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=49486) | [$39,598](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome®ion=ma&timePeriod=2025&baseline=2&reform=70814&mode=full&household=49486) | \-$436 (1.09%) | +| Marginal Tax Rate | 24.7% | 25.7% | \+1pp | +| Net Marginal Hourly Wage | $18.83 | $18.58 | \-$0.25 (-1.3%) | Our Massachusetts worker earns $25.00 per hour, working 2,000 hours annually for $50,000 total earnings. Their net income changes from $40,034 to $39,598 due to an increase in state income tax from 5% to 6%. This $436 reduction represents a 1.09% drop in their current net income ($436 / $40,034 = 0.0109 = 1.09%). The percentage differs from the 1pp tax rate increase because the tax applies to gross income while the percentage change is relative to net income, which is lower due to taxes and deductions. @@ -114,15 +114,15 @@ After adjusting how much each worker earns, we apply the microsimulation model a # Macro effects of behavioral responses -To demonstrate how behavioral responses affect the broader fiscal impact, let’s examine the revenue implications of raising the Massachusetts state income tax rate from 5% to 6%. [Applying CBO’s elasticities](https://policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.hours&reform=72611®ion=ma&timePeriod=2025&baseline=2), we find that the reform would reduce hours worked by 0.24%. While the income effect raises employment by 1,700 full-time equivalents (since the tax lowers the net income of affected workers), the substitution effect lowers employment by 9,900 full-time equivalents (since affected workers see their net-of-tax wage rate fall), for a net effect of 8,200 FTEs. +To demonstrate how behavioral responses affect the broader fiscal impact, let’s examine the revenue implications of raising the Massachusetts state income tax rate from 5% to 6%. [Applying CBO’s elasticities](https://legacy.policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.hours&reform=72611®ion=ma&timePeriod=2025&baseline=2), we find that the reform would reduce hours worked by 0.24%. While the income effect raises employment by 1,700 full-time equivalents (since the tax lowers the net income of affected workers), the substitution effect lowers employment by 9,900 full-time equivalents (since affected workers see their net-of-tax wage rate fall), for a net effect of 8,200 FTEs. ![](https://cdn-images-1.medium.com/max/3200/0*bJLkz2SVHiZfy04i) -In turn, [earnings fall 0.27%](https://policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.earnings.overall.relative&reform=72611®ion=ma&timePeriod=2025&baseline=2); this exceeds the hours worked effect because low-income workers, who pay no state tax under current law due to various deductions, exemptions, and non-refundable credits, are unaffected by the reform. Extended visualizations show how these effects vary with income decile. +In turn, [earnings fall 0.27%](https://legacy.policyengine.org/us/policy?focus=policyOutput.laborSupplyImpact.earnings.overall.relative&reform=72611®ion=ma&timePeriod=2025&baseline=2); this exceeds the hours worked effect because low-income workers, who pay no state tax under current law due to various deductions, exemptions, and non-refundable credits, are unaffected by the reform. Extended visualizations show how these effects vary with income decile. ![](https://cdn-images-1.medium.com/max/3200/0*-MxdT_8m74KZCM5C) -Finally, the reduced earnings in turn reduce the revenue projection from [$3.6 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72337®ion=ma&timePeriod=2025&baseline=2) without behavioral responses to [$3.2 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72338®ion=ma&timePeriod=2025&baseline=2) with them (an 11% reduction). PolicyEngine estimates the effect of behavioral responses on other outcomes too; for example, without behavioral responses, the tax reform lowers the net income share held by the top 10% by [0.2%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=72337®ion=ma&timePeriod=2025&baseline=2) without behavioral responses, but [0.3%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=72338®ion=ma&timePeriod=2025&baseline=2) with them. +Finally, the reduced earnings in turn reduce the revenue projection from [$3.6 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72337®ion=ma&timePeriod=2025&baseline=2) without behavioral responses to [$3.2 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=72338®ion=ma&timePeriod=2025&baseline=2) with them (an 11% reduction). PolicyEngine estimates the effect of behavioral responses on other outcomes too; for example, without behavioral responses, the tax reform lowers the net income share held by the top 10% by [0.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=72337®ion=ma&timePeriod=2025&baseline=2) without behavioral responses, but [0.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=72338®ion=ma&timePeriod=2025&baseline=2) with them. # Conclusion diff --git a/src/posts/articles/us-household-ai.md b/src/posts/articles/us-household-ai.md index 1f6d7d338..97b61c2d7 100644 --- a/src/posts/articles/us-household-ai.md +++ b/src/posts/articles/us-household-ai.md @@ -2,13 +2,13 @@ PolicyEngine has developed a new artificial intelligence feature that transforms
-Users frequently encounter intricate calculations spanning multiple programs, each with distinct thresholds, phase-outs, and dependencies. Our solution combines PolicyEngine’s open-source rules engine with artificial intelligence to explain these calculations in plain language, building on our [previous work applying AI to policy analysis](https://policyengine.org/us/research/gpt-analysis). +Users frequently encounter intricate calculations spanning multiple programs, each with distinct thresholds, phase-outs, and dependencies. Our solution combines PolicyEngine’s open-source rules engine with artificial intelligence to explain these calculations in plain language, building on our [previous work applying AI to policy analysis](https://legacy.policyengine.org/us/research/gpt-analysis). # Technical architecture The system integrates PolicyEngine’s tax-benefit rules with Anthropic’s Claude 3.5 Sonnet API. When calculating program amounts like the Child Tax Credit or Supplemental Security Income, PolicyEngine processes thousands of intermediate calculations involving household income, deductions, and other eligibility factors. Our new explanation system passes these complex intermediate calculations to the AI system, which generates natural language explanations. -For example, consider [a family of four in Connecticut](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=50156) with a three-year-old child and $47,000 income. PolicyEngine calculates that they qualify for $475 in annual benefits from WIC, the Special Supplemental Nutrition Program for Women, Infants, and Children. Users can now click a tooltip followed by an “**Explain with AI ✨**” button to receive a comprehensive explanation of their eligibility and potential changes that could affect their benefit amount. +For example, consider [a family of four in Connecticut](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=50156) with a three-year-old child and $47,000 income. PolicyEngine calculates that they qualify for $475 in annual benefits from WIC, the Special Supplemental Nutrition Program for Women, Infants, and Children. Users can now click a tooltip followed by an “**Explain with AI ✨**” button to receive a comprehensive explanation of their eligibility and potential changes that could affect their benefit amount. ![](https://cdn-images-1.medium.com/max/2000/0*x0qcBrqb0Zapj8Ob) @@ -22,7 +22,7 @@ Following PolicyEngine’s existing policy analysis framework, the explanations # Development roadmap -Having launched this feature in the PolicyEngine web app, we will extend it to [API](https://policyengine.org/us/api) customers in Q1 2025. PolicyEngine welcomes feedback on improving accessibility across user groups as we continue development. +Having launched this feature in the PolicyEngine web app, we will extend it to [API](https://legacy.policyengine.org/us/api) customers in Q1 2025. PolicyEngine welcomes feedback on improving accessibility across user groups as we continue development. --- diff --git a/src/posts/articles/us-the-new-policyengine.md b/src/posts/articles/us-the-new-policyengine.md index 029363b24..4e132ce6c 100644 --- a/src/posts/articles/us-the-new-policyengine.md +++ b/src/posts/articles/us-the-new-policyengine.md @@ -20,7 +20,7 @@ If you’ve used the beta app, we think you’ll find the new version easier to For more information: -1. [Read our companion blog post](https://policyengine.org/us/blog/2023-01-12-from-idea-to-impact-scoring-a-policy-reform-on-the-new-policyengine-us) which walks through how to use the new app, using [full Child Tax Credit refundability](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=14®ion=us&timePeriod=2023&baseline=2) as a case study +1. [Read our companion blog post](https://legacy.policyengine.org/us/blog/2023-01-12-from-idea-to-impact-scoring-a-policy-reform-on-the-new-policyengine-us) which walks through how to use the new app, using [full Child Tax Credit refundability](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=14®ion=us&timePeriod=2023&baseline=2) as a case study 1. [Follow us on Twitter](http://twitter.com/thepolicyengine), where we’ll share tips and examples diff --git a/src/posts/articles/us-year-in-review-2024.md b/src/posts/articles/us-year-in-review-2024.md index cfaa23579..fd08a338d 100644 --- a/src/posts/articles/us-year-in-review-2024.md +++ b/src/posts/articles/us-year-in-review-2024.md @@ -1,34 +1,34 @@ -In 2024, PolicyEngine US achieved significant milestones in democratizing policy analysis through technological innovation and comprehensive coverage of major policy developments. Together with our [achievements in the UK](https://policyengine.org/uk/research/uk-year-in-review-2024), we've expanded the frontier of evidence-based policymaking on both sides of the Atlantic.Here’s a detailed look at our achievements and impact this year. +In 2024, PolicyEngine US achieved significant milestones in democratizing policy analysis through technological innovation and comprehensive coverage of major policy developments. Together with our [achievements in the UK](https://legacy.policyengine.org/uk/research/uk-year-in-review-2024), we've expanded the frontier of evidence-based policymaking on both sides of the Atlantic.Here’s a detailed look at our achievements and impact this year. ## Evolving the platform -Our platform underwent major technological advances to enhance both capability and accessibility. We launched the [Enhanced Current Population Survey dataset](https://policyengine.org/us/research/enhanced-cps-beta), which leverages machine learning to provide more accurate microsimulation modeling. This advancement allows for more precise analysis of policy impacts across different demographic groups. +Our platform underwent major technological advances to enhance both capability and accessibility. We launched the [Enhanced Current Population Survey dataset](https://legacy.policyengine.org/us/research/enhanced-cps-beta), which leverages machine learning to provide more accurate microsimulation modeling. This advancement allows for more precise analysis of policy impacts across different demographic groups. -We introduced comprehensive [state income tax models](https://policyengine.org/us/research/state-tax-model-beta) for all 50 states and DC, enabling analysis of state-specific reforms and their interaction with federal policy. +We introduced comprehensive [state income tax models](https://legacy.policyengine.org/us/research/state-tax-model-beta) for all 50 states and DC, enabling analysis of state-specific reforms and their interaction with federal policy. ![](https://cdn-images-1.medium.com/max/2000/0*uDx8olHGnjSz4CbK) -Our new [behavioral response capabilities](https://policyengine.org/us/research/us-behavioral-response) capture how policy reforms affect labor supply based on customizable elasticities, enabling more nuanced analysis of how tax and benefit changes influence individual economic decisions. +Our new [behavioral response capabilities](https://legacy.policyengine.org/us/research/us-behavioral-response) capture how policy reforms affect labor supply based on customizable elasticities, enabling more nuanced analysis of how tax and benefit changes influence individual economic decisions. -This fall, we launched our [AI-powered tax and benefit explanations system](https://policyengine.org/us/research/us-household-ai), which translates complex calculations into clear, understandable language. This feature makes policy analysis more accessible to users regardless of their technical background. +This fall, we launched our [AI-powered tax and benefit explanations system](https://legacy.policyengine.org/us/research/us-household-ai), which translates complex calculations into clear, understandable language. This feature makes policy analysis more accessible to users regardless of their technical background. ![](https://cdn-images-1.medium.com/max/2000/0*i6vTPu1E2W-ujch_) ## Informing the electorate -During this election year, we developed comprehensive analyses of major policy proposals, including a [calculator](https://policyengine.org/us/2024-election-calculator) showing the personal impacts of presidential candidates’ tax plans. We analyzed Harris’ [Child Tax Credit](https://policyengine.org/us/research/harris-ctc) and [Earned Income Tax Credit](https://policyengine.org/us/research/harris-eitc) expansions, as well as Trump’s [Social Security tax exemption](https://policyengine.org/us/research/social-security-tax-exemption) and [Tax Cuts and Jobs Act extension](https://policyengine.org/us/research/tcja-extension). Our analysis extended to state-level policies, including the [Oregon Rebate ballot measure](https://policyengine.org/us/research/oregon-rebate). +During this election year, we developed comprehensive analyses of major policy proposals, including a [calculator](https://legacy.policyengine.org/us/2024-election-calculator) showing the personal impacts of presidential candidates’ tax plans. We analyzed Harris’ [Child Tax Credit](https://legacy.policyengine.org/us/research/harris-ctc) and [Earned Income Tax Credit](https://legacy.policyengine.org/us/research/harris-eitc) expansions, as well as Trump’s [Social Security tax exemption](https://legacy.policyengine.org/us/research/social-security-tax-exemption) and [Tax Cuts and Jobs Act extension](https://legacy.policyengine.org/us/research/tcja-extension). Our analysis extended to state-level policies, including the [Oregon Rebate ballot measure](https://legacy.policyengine.org/us/research/oregon-rebate). ![](https://cdn-images-1.medium.com/max/3200/0*kPmEReMyo2sa9vZ-) ## Expanding benefit access and personal tax insights -We broadened our suite of specialized calculators and tools in 2024, launching the country’s first standalone [Child Tax Credit calculator](https://policyengine.org/us/child-tax-credit-calculator) and introducing [GiveCalc](https://policyengine.org/us/research/givecalc) to help donors understand the tax implications of their charitable contributions. Our API now powers innovative services like [MyFriendBen](https://www.myfriendben.org/), which received a [$2.4 million grant](http://awarded) from the Bill and Melinda Gates Foundation, and [Benefit Navigator](https://www.imaginela.org/benefit-navigator), which serves over 500 case managers across Los Angeles County. +We broadened our suite of specialized calculators and tools in 2024, launching the country’s first standalone [Child Tax Credit calculator](https://legacy.policyengine.org/us/child-tax-credit-calculator) and introducing [GiveCalc](https://legacy.policyengine.org/us/research/givecalc) to help donors understand the tax implications of their charitable contributions. Our API now powers innovative services like [MyFriendBen](https://www.myfriendben.org/), which received a [$2.4 million grant](http://awarded) from the Bill and Melinda Gates Foundation, and [Benefit Navigator](https://www.imaginela.org/benefit-navigator), which serves over 500 case managers across Los Angeles County. ## Growing our impact Our research and tools gained recognition across sectors throughout 2024. We presented our work at major academic conferences including the National Tax Association Spring Symposium and Annual Conference, APPAM, BenCon, and the Open Sustainability Summit. Universities including UC Berkeley, Northwestern University, and George Mason University invited us to share our research. -Our analysis informed policy discussions at various levels, from Congress — where Rep. Morgan McGarvey [referenced our work](https://mcgarvey.house.gov/media/press-releases/congressman-morgan-mcgarvey-introduces-young-adult-tax-credit-act) in the Young Adult Tax Credit Act — to think tanks, with organizations like the Niskanen Center utilizing our tools for [policy analysis](https://policyengine.org/us/research/niskanen-center-analysis). +Our analysis informed policy discussions at various levels, from Congress — where Rep. Morgan McGarvey [referenced our work](https://mcgarvey.house.gov/media/press-releases/congressman-morgan-mcgarvey-introduces-young-adult-tax-credit-act) in the Young Adult Tax Credit Act — to think tanks, with organizations like the Niskanen Center utilizing our tools for [policy analysis](https://legacy.policyengine.org/us/research/niskanen-center-analysis). ## Planning for a transformative 2025 @@ -38,6 +38,6 @@ Looking ahead to 2025, we’re expanding our capabilities with API access to our ## Acknowledging our support -This work wouldn’t be possible without support from [NEO Philanthropy](https://policyengine.org/us/research/neo-philanthropy), [Arnold Ventures](https://www.arnoldventures.org/), the [Gerald Huff Fund for Humanity](https://fundforhumanity.org/), the [PSL Foundation](http://psl-foundation.org), and the Corvus Oaks Foundation. We’re also grateful to our API customers [MyFriendBen](https://www.myfriendben.org/) and [Benefit Navigator](https://www.imaginela.org/benefit-navigator) for their continued collaboration. +This work wouldn’t be possible without support from [NEO Philanthropy](https://legacy.policyengine.org/us/research/neo-philanthropy), [Arnold Ventures](https://www.arnoldventures.org/), the [Gerald Huff Fund for Humanity](https://fundforhumanity.org/), the [PSL Foundation](http://psl-foundation.org), and the Corvus Oaks Foundation. We’re also grateful to our API customers [MyFriendBen](https://www.myfriendben.org/) and [Benefit Navigator](https://www.imaginela.org/benefit-navigator) for their continued collaboration. -Visit [policyengine.org](https://policyengine.org) to explore our tools and contribute to evidence-based policy discussions. +Visit [policyengine.org](https://legacy.policyengine.org) to explore our tools and contribute to evidence-based policy discussions. diff --git a/src/posts/articles/utah-income-tax-changes.ipynb b/src/posts/articles/utah-income-tax-changes.ipynb index ae9609542..2bcd99f78 100644 --- a/src/posts/articles/utah-income-tax-changes.ipynb +++ b/src/posts/articles/utah-income-tax-changes.ipynb @@ -17,7 +17,7 @@ "* Has no effect on the Supplemental Poverty Measure \n", "* Lowers the Gini index of inequality by 0.001%\n", "\n", - "*Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=ut&timePeriod=2025&baseline=81314) or calculate the [effect on your household.](https://policyengine.org/us/household?focus=intro&reform=2®ion=ut&timePeriod=2025&baseline=81314)*\n", + "*Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=2®ion=ut&timePeriod=2025&baseline=81314) or calculate the [effect on your household.](https://legacy.policyengine.org/us/household?focus=intro&reform=2®ion=ut&timePeriod=2025&baseline=81314)*\n", "\n", "[^1]: HB106 also reduces the state’s corporate tax rate to 4.5% and establishes a nonrefundable credit for employer-provided childcare. We did not include these provisions in our analysis. \n" ] @@ -71,7 +71,7 @@ "## Household Impacts\n", "\n", "As there are several components to the tax package, different household compositions will see unique impacts to their net income.\n", - "Most households will benefit solely from the reduction in the state's income tax rate. However, additional benefits apply to two groups: middle-income households with newborns and 5 year old children or families that receive Social Security benefits and have earnings above the old Social Security credit thresholds. For example, a single adult earning $50,000 will see a [$25 reduction in their tax liability](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52568) solely due to the income tax rate cut. However, a single parent with the same annual income and a child who is 5 years old would [gain $325](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52567) as the nonrefundable Child Tax Credit would lower their tax liability by an additional $300. Figure 1 displays the change in net income for this household as earnings rise. \n" + "Most households will benefit solely from the reduction in the state's income tax rate. However, additional benefits apply to two groups: middle-income households with newborns and 5 year old children or families that receive Social Security benefits and have earnings above the old Social Security credit thresholds. For example, a single adult earning $50,000 will see a [$25 reduction in their tax liability](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52568) solely due to the income tax rate cut. However, a single parent with the same annual income and a child who is 5 years old would [gain $325](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52567) as the nonrefundable Child Tax Credit would lower their tax liability by an additional $300. Figure 1 displays the change in net income for this household as earnings rise. \n" ] }, { @@ -2167,7 +2167,7 @@ "source": [ "While this household now qualifies for the $1,000 CTC, they will not be eligible for the maximum amount at any income level. Since the household’s tax liability does not reach $1,000 until the CTC begins to phase out at $43,000, the maximum benefit that the household will receive from the CTC is $699.\n", "\n", - "For an elderly couple where one spouse earns $60,000 from their job and the other receives $30,000 from Social Security, their [net income increases by $293.](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The reduction of the income tax rate would decrease their tax liability by $43, while increasing the Social Security credit’s phaseout threshold would allow the household to receive $250 more from the credit. Figure 2 shows the change in net income for this household as earnings rise. \n" + "For an elderly couple where one spouse earns $60,000 from their job and the other receives $30,000 from Social Security, their [net income increases by $293.](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The reduction of the income tax rate would decrease their tax liability by $43, while increasing the Social Security credit’s phaseout threshold would allow the household to receive $250 more from the credit. Figure 2 shows the change in net income for this household as earnings rise. \n" ] }, { @@ -3548,9 +3548,9 @@ "source": [ "## Statewide Impacts\n", "\n", - "For tax year 2025, Utah’s latest income tax changes will [reduce state revenues by $95.5 million,](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) according to PolicyEngine’s static modeling.\n", + "For tax year 2025, Utah’s latest income tax changes will [reduce state revenues by $95.5 million,](https://legacy.policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) according to PolicyEngine’s static modeling.\n", "\n", - "The tax changes will raise the net income of [62.3% of residents in Utah.](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The percentage of residents in each income decile who are net beneficiaries will vary. For example, 13% of residents in the lowest income decile will see their net income increase, while 89% in the highest decile will have a larger after-tax income.\n" + "The tax changes will raise the net income of [62.3% of residents in Utah.](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The percentage of residents in each income decile who are net beneficiaries will vary. For example, 13% of residents in the lowest income decile will see their net income increase, while 89% in the highest decile will have a larger after-tax income.\n" ] }, { @@ -3903,7 +3903,7 @@ "id": "f94929b0", "metadata": {}, "source": [ - "Utah’s new tax package will provide an [average benefit of $82](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) per household, ranging from $8 in the bottom income decile to $249 in the top decile (as defined by the nationwide income distribution).\n" + "Utah’s new tax package will provide an [average benefit of $82](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) per household, ranging from $8 in the bottom income decile to $249 in the top decile (as defined by the nationwide income distribution).\n" ] }, { @@ -4003,7 +4003,7 @@ "id": "6a495589", "metadata": {}, "source": [ - "We project the tax changes to have [no effect on poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) or deep poverty while reducing the state’s Gini index of inequality by [0.001%.](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) \n" + "We project the tax changes to have [no effect on poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) or deep poverty while reducing the state’s Gini index of inequality by [0.001%.](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) \n" ] }, { @@ -4013,11 +4013,11 @@ "source": [ "## Conclusion\n", "\n", - "Utah’s changes to its individual income tax will lower state revenues by $96 million in 2025. The provisions will provide an average benefit of $82 to households; those in higher-income deciles will benefit more than lower-income households in [dollar terms.](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The bill will not affect the state’s Supplemental Poverty Measure, and it lower the Gini index of income inequality by 0.001%.\n", + "Utah’s changes to its individual income tax will lower state revenues by $96 million in 2025. The provisions will provide an average benefit of $82 to households; those in higher-income deciles will benefit more than lower-income households in [dollar terms.](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.relative&reform=2®ion=ut&timePeriod=2025&baseline=81314&household=52553) The bill will not affect the state’s Supplemental Poverty Measure, and it lower the Gini index of income inequality by 0.001%.\n", "\n", "As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy.\n", "\n", - "We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms.\n" + "We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms.\n" ] } ], diff --git a/src/posts/articles/vance-ctc.md b/src/posts/articles/vance-ctc.md index b58056611..5653fb258 100644 --- a/src/posts/articles/vance-ctc.md +++ b/src/posts/articles/vance-ctc.md @@ -14,11 +14,11 @@ While not a formal policy proposal, these statements provide insight into his th ## Background on the Child Tax Credit -The current CTC provides up to $2,000 per child, with a partial refundability structure, as our [CTC explainer](https://policyengine.org/us/research/the-child-tax-credit-in-2023) details. Low-income parents who don’t benefit from the $2,000 non-refundable credit can receive the Additional Child Tax Credit, a refundable credit that phases in with earnings above $2,500. The credit then begins to phase out at incomes of $200,000 for single filers and $400,000 for joint filers. PolicyEngine projects that this phase-out structure will reduce the program’s cost by [$5 billion in 2025](https://policyengine.org/us/policy?reform=63060&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2), or [$4 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63085&baseline=2&timePeriod=2025®ion=enhanced_us) accounting for behavioral responses. +The current CTC provides up to $2,000 per child, with a partial refundability structure, as our [CTC explainer](https://legacy.policyengine.org/us/research/the-child-tax-credit-in-2023) details. Low-income parents who don’t benefit from the $2,000 non-refundable credit can receive the Additional Child Tax Credit, a refundable credit that phases in with earnings above $2,500. The credit then begins to phase out at incomes of $200,000 for single filers and $400,000 for joint filers. PolicyEngine projects that this phase-out structure will reduce the program’s cost by [$5 billion in 2025](https://legacy.policyengine.org/us/policy?reform=63060&focus=policyOutput.policyBreakdown®ion=enhanced_us&timePeriod=2025&baseline=2), or [$4 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63085&baseline=2&timePeriod=2025®ion=enhanced_us) accounting for behavioral responses. ![](https://cdn-images-1.medium.com/max/3200/0*pEOu1VXlahfSP2g8) -The most recent attempt to expand the CTC came in the Tax Relief for American Families and Workers Act (TRAFWA). The House [passed](https://www.congress.gov/bill/118th-congress/house-bill/7024/all-actions) this bill 357–70 in January. However, on August 1, the Senate fell short of the votes needed to pass it, with a 48–44 vote; Vance was absent for this vote. We [analyzed](https://policyengine.org/us/research/trafwa-ctc) the potential impacts of TRAFWA in March. +The most recent attempt to expand the CTC came in the Tax Relief for American Families and Workers Act (TRAFWA). The House [passed](https://www.congress.gov/bill/118th-congress/house-bill/7024/all-actions) this bill 357–70 in January. However, on August 1, the Senate fell short of the votes needed to pass it, with a 48–44 vote; Vance was absent for this vote. We [analyzed](https://legacy.policyengine.org/us/research/trafwa-ctc) the potential impacts of TRAFWA in March. ## Household Impacts @@ -30,11 +30,11 @@ Vance’s suggested policy would provide up to $5,000 per child, though specific Regardless of refundability, parents with income above certain levels would gain $5,000 per child; for example, a married family with . For low-income parents, the fully refundable version could provide up to $5,000 per child in additional benefits. Otherwise, both versions provide an additional $3,000 per child for most families currently receiving the full $2,000 credit, except those in the phase-in region of the partially-refundable version. -For personalized calculations, you can use our calculators for the version with [current refundability](https://policyengine.org/us/household?focus=intro&reform=63077&baseline=2&timePeriod=2025®ion=enhanced_us) and [full refundability](https://policyengine.org/us/household?focus=intro&reform=63076&baseline=2&timePeriod=2025®ion=enhanced_us). +For personalized calculations, you can use our calculators for the version with [current refundability](https://legacy.policyengine.org/us/household?focus=intro&reform=63077&baseline=2&timePeriod=2025®ion=enhanced_us) and [full refundability](https://legacy.policyengine.org/us/household?focus=intro&reform=63076&baseline=2&timePeriod=2025®ion=enhanced_us). ## Societal Impacts -Applying the PolicyEngine US 1.45.2 microsimulation model and Enhanced CPS data, we project that the CTC expansion would cost $106 billion and $241 billion in 2025 if maintaining or expanding refundability, respectively, while reducing poverty and inequality (we display the Gini index below, though other measures also fall).[^crfb] You can view the full results in PolicyEngine for the [current](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=63077&baseline=2&timePeriod=2025®ion=enhanced_us) and [full](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63076&baseline=2&timePeriod=2025®ion=enhanced_us) refundability versions. The below table summarizes these impacts: +Applying the PolicyEngine US 1.45.2 microsimulation model and Enhanced CPS data, we project that the CTC expansion would cost $106 billion and $241 billion in 2025 if maintaining or expanding refundability, respectively, while reducing poverty and inequality (we display the Gini index below, though other measures also fall).[^crfb] You can view the full results in PolicyEngine for the [current](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=63077&baseline=2&timePeriod=2025®ion=enhanced_us) and [full](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63076&baseline=2&timePeriod=2025®ion=enhanced_us) refundability versions. The below table summarizes these impacts: [^crfb]: Comparing our budgetary projections to the Committee for Responsible Federal Budget's ["Build Your Own Child Tax Credit"](https://www.crfb.org/build-your-own-child-tax-credit) tool, we find similar results with full refundability, but significantly lower results with current refundability. Specifically, their estimates for no full refundability were \$238 billion (CRFB) versus \$106 billion (PolicyEngine), and with full refundability, \$264 billion (CRFB) versus \$241 billion (PolicyEngine). They shared that their estimates do not rely on microsimulation modeling, and could as a result become inaccurate for larger reforms. @@ -63,9 +63,9 @@ The incorporation of labor supply responses based on CBO elasticities reveals di | **Current refundability** | +0.45% | +0.27% | -8.3% | | **Fully refundability** | -0.25% | -0.11% | +1.7% | -Without changing refundability, income effects reduce labor supply, but substitution effects from removing the additional 5 percentage point marginal tax rate in the CTC phase-out region dominate, resulting in a net increase in labor supply. [See the full results in PolicyEngine.](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63079&baseline=2&timePeriod=2025®ion=enhanced_us) +Without changing refundability, income effects reduce labor supply, but substitution effects from removing the additional 5 percentage point marginal tax rate in the CTC phase-out region dominate, resulting in a net increase in labor supply. [See the full results in PolicyEngine.](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63079&baseline=2&timePeriod=2025®ion=enhanced_us) -With full refundability, income effects lower labor supply, and substitution effects operate in both directions: lower marginal tax rates from removing the phase-out, but higher marginal tax rates from removing the phase-in. The net effect is lower labor supply from both income and substitution effects, with income effects having a larger impact. [See the full results in PolicyEngine.](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63081&baseline=2&timePeriod=2025®ion=enhanced_us) +With full refundability, income effects lower labor supply, and substitution effects operate in both directions: lower marginal tax rates from removing the phase-out, but higher marginal tax rates from removing the phase-in. The net effect is lower labor supply from both income and substitution effects, with income effects having a larger impact. [See the full results in PolicyEngine.](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=63081&baseline=2&timePeriod=2025®ion=enhanced_us) ## Conclusion diff --git a/src/posts/articles/vat-school-comparison.md b/src/posts/articles/vat-school-comparison.md index a412b0e54..03d03d43d 100644 --- a/src/posts/articles/vat-school-comparison.md +++ b/src/posts/articles/vat-school-comparison.md @@ -1,20 +1,20 @@ -[_See the full impact on PolicyEngine here._](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) +[_See the full impact on PolicyEngine here._](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) The Autumn Budget 2024 confirms the previously signalled intention to levy VAT on private school fees. Using PolicyEngine's open-source model, we analyse the fiscal and distributional implications of this reform. ## Budgetary impacts -We project the private school VAT reform will raise [£1.5 to £1.6 billion](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) per year, totalling £7.7 billion from 2025 to 2029\. +We project the private school VAT reform will raise [£1.5 to £1.6 billion](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) per year, totalling £7.7 billion from 2025 to 2029\. Projections from [HM Treasury](https://assets.publishing.service.gov.uk/media/6721d2c54da1c0d41942a8d2/Policy_Costing_Document_-_Autumn_Budget_2024.pdf#page=34) and the [OBR](https://obr.uk/docs/dlm_uploads/OBR_Economic_and_fiscal_outlook_Oct_2024.pdf#page=66) each total £8.6 billion, 12% higher than ours, as shown below. #### Revenue from private school VAT by scorekeeper (£ billions) -| Fiscal Year | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | Total | -| :----------- | :------ | :------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------ | :---------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------------------------- | :---- | -| PolicyEngine | 0.0 | [1.5](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) | [1.5](https://policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2026&baseline=1) | [1.5](https://policyengine.org/uk/policy?focus=gov&reform=60649®ion=uk&timePeriod=2027&baseline=1) | [1.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60649®ion=uk&timePeriod=2028&baseline=1) | [1.6](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60649®ion=uk&timePeriod=2029&baseline=1) | 7.7 | -| HM Treasury | 0.5 | 1.5 | 1.6 | 1.6 | 1.7 | 1.7 | 8.6 | -| OBR | 0.5 | 1.5 | 1.6 | 1.6 | 1.7 | 1.7 | 8.6 | +| Fiscal Year | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | Total | +| :----------- | :------ | :------------------------------------------------------------------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------- | :----------------------------------------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------ | :---- | +| PolicyEngine | 0.0 | [1.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2025&baseline=1) | [1.5](https://legacy.policyengine.org/uk/policy?focus=policyOutput.inequalityImpact&reform=60649®ion=uk&timePeriod=2026&baseline=1) | [1.5](https://legacy.policyengine.org/uk/policy?focus=gov&reform=60649®ion=uk&timePeriod=2027&baseline=1) | [1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60649®ion=uk&timePeriod=2028&baseline=1) | [1.6](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=60649®ion=uk&timePeriod=2029&baseline=1) | 7.7 | +| HM Treasury | 0.5 | 1.5 | 1.6 | 1.6 | 1.7 | 1.7 | 8.6 | +| OBR | 0.5 | 1.5 | 1.6 | 1.6 | 1.7 | 1.7 | 8.6 | The variations between our estimates and official projections may stem from different assumptions about the total value of private school fees or varying projections of future enrollment patterns. diff --git a/src/posts/articles/ways-and-means-salt-cap.md b/src/posts/articles/ways-and-means-salt-cap.md index fd0a03706..f348ec4f8 100644 --- a/src/posts/articles/ways-and-means-salt-cap.md +++ b/src/posts/articles/ways-and-means-salt-cap.md @@ -12,7 +12,7 @@ Key results (static): - Lowers the Gini index of income inequality by 0.4% -_Use PolicyEngine to [view the full results](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) or calculate the [effect on your household](https://policyengine.org/us/household?focus=intro&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps)._ +_Use PolicyEngine to [view the full results](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) or calculate the [effect on your household](https://legacy.policyengine.org/us/household?focus=intro&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps)._ ## Summary of SALT Provisions @@ -26,7 +26,7 @@ The SALT deduction is set to become uncapped starting in 2026 after being limite ## Household Impacts -As we are only comparing how the SALT deduction would affect households as a part of the full bill, only households that itemize their deductions and have state and local tax expenses would be affected. For example, a single adult in New York making $500,000 and $45,000 in property taxes would see a [reduction in their net income of $21,053](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps&household=53326) in 2026.[^2] Figure 2 displays how the single adult’s net income would change as their household earnings vary. While rising at certain points, net income generally falls as household income increases. +As we are only comparing how the SALT deduction would affect households as a part of the full bill, only households that itemize their deductions and have state and local tax expenses would be affected. For example, a single adult in New York making $500,000 and $45,000 in property taxes would see a [reduction in their net income of $21,053](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps&household=53326) in 2026.[^2] Figure 2 displays how the single adult’s net income would change as their household earnings vary. While rising at certain points, net income generally falls as household income increases. [^2]: This assumes a home price of $2,800,000 with an average property tax rate of 1.6%. @@ -68,13 +68,13 @@ Using PolicyEngine’s static microsimulation model, we project that the $30,000 | 2035 | 119.3 | | **2026-2035** | **937.2** | -The SALT cap would [reduce the net income of 5.2% of American residents](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) in 2026. The top income decile would see the greatest number of residents who are made worse off by the SALT cap. +The SALT cap would [reduce the net income of 5.2% of American residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) in 2026. The top income decile would see the greatest number of residents who are made worse off by the SALT cap. **Figure 5: Distribution of the SALT Cap Under the W&M Bill (2026)** ![](https://cdn-images-1.medium.com/max/3200/0*bitAetgKi4pRc7eH) -Households in the top decile would pay an average of [$4,405 more](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) in taxes, a larger amount than other deciles. +Households in the top decile would pay an average of [$4,405 more](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) in taxes, a larger amount than other deciles. **Figure 6: Average Impact of the SALT Cap Under the W&M Bill (2026)** @@ -82,19 +82,19 @@ Households in the top decile would pay an average of [$4,405 more](https://polic When it comes to poverty and inequality, the SALT cap would, in 2026: -- [Increase poverty](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 0.02%, +- [Increase poverty](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps) (as defined by the Supplemental Poverty Measure) by 0.02%, -- Increase deep poverty and deep child poverty [by 0.06% and 0.11%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps), respectively, +- Increase deep poverty and deep child poverty [by 0.06% and 0.11%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps), respectively, -- Reduce the Gini index of inequality [by 0.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=84006®ion=us&timePeriod=2026&baseline=84008&dataset=enhanced_cps), and the top 1%’s share of net income by 1.0% +- Reduce the Gini index of inequality [by 0.4%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=84006®ion=us&timePeriod=2026&baseline=84008&dataset=enhanced_cps), and the top 1%’s share of net income by 1.0% ## Conclusion -Conditional on other provisions in the Ways and Means Committee’s bill, we find that its SALT cap raises federal revenues by $937 billion over ten years, assuming no behavioral responses. Our projection exceeds JCT’s by 2.2%, though we score from 2026–2035 rather than 2025–2034. The limitation would reduce the after-tax incomes of 5% of the population in 2026, with households in the top income decile experiencing the greatest losses on an [absolute basis](https://policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps). The $30,000 cap is projected to increase poverty by 0.02%, while lowering the Gini index by 0.4%. +Conditional on other provisions in the Ways and Means Committee’s bill, we find that its SALT cap raises federal revenues by $937 billion over ten years, assuming no behavioral responses. Our projection exceeds JCT’s by 2.2%, though we score from 2026–2035 rather than 2025–2034. The limitation would reduce the after-tax incomes of 5% of the population in 2026, with households in the top income decile experiencing the greatest losses on an [absolute basis](https://legacy.policyengine.org/us/policy?focus=policyOutput.distributionalImpact.incomeDecile.average&reform=84044®ion=us&timePeriod=2026&baseline=84050&dataset=enhanced_cps). The $30,000 cap is projected to increase poverty by 0.02%, while lowering the Gini index by 0.4%. As policymakers evaluate reforms such as these, analytical tools like PolicyEngine offer critical insights into the impacts on diverse household compositions and the broader economy. -We invite you to explore our [additional analyses](https://policyengine.org/us/research) and use [PolicyEngine](https://policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. +We invite you to explore our [additional analyses](https://legacy.policyengine.org/us/research) and use [PolicyEngine](https://legacy.policyengine.org/us) to calculate your own tax benefits or design custom policy reforms. ## Appendix A: Baseline Details diff --git a/src/posts/articles/wfa-means-test.ipynb b/src/posts/articles/wfa-means-test.ipynb index f0a23653b..603822360 100644 --- a/src/posts/articles/wfa-means-test.ipynb +++ b/src/posts/articles/wfa-means-test.ipynb @@ -31,7 +31,7 @@ "\n", "## Economic impacts\n", "\n", - "We [estimate](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=85980®ion=uk&timePeriod=2025&baseline=1) this reform will increase the deficit by £1.33 billion per year (the government estimates £1.26 billion in 2025/26), totaling £6.6 billion over the next five years.\n", + "We [estimate](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=85980®ion=uk&timePeriod=2025&baseline=1) this reform will increase the deficit by £1.33 billion per year (the government estimates £1.26 billion in 2025/26), totaling £6.6 billion over the next five years.\n", "\n", "| Net revenue impact (billions) | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2025-30 |\n", "|-------------------------------|---------|---------|---------|---------|---------|---------|\n", @@ -81,7 +81,7 @@ { "data": { "text/markdown": [ - "[See the forecast change in PolicyEngine](https://policyengine.org/uk/policy?reform=85983&baseline=85984®ion=uk&timePeriod=2029)" + "[See the forecast change in PolicyEngine](https://legacy.policyengine.org/uk/policy?reform=85983&baseline=85984®ion=uk&timePeriod=2029)" ], "text/plain": [ "" @@ -144,7 +144,7 @@ "baseline = Reform.from_dict(ORIGINAL_MEANS_TESTED, country_id=\"uk\")\n", "reform = Reform.from_dict(NEW_MEANS_TESTED, country_id=\"uk\")\n", "\n", - "link = f\"https://policyengine.org/uk/policy?reform={reform.api_id}&baseline={baseline.api_id}®ion=uk&timePeriod=2029\"\n", + "link = f\"https://legacy.policyengine.org/uk/policy?reform={reform.api_id}&baseline={baseline.api_id}®ion=uk&timePeriod=2029\"\n", "\n", "Markdown(f\"[See the forecast change in PolicyEngine]({link})\")" ] @@ -648,7 +648,7 @@ "cell_type": "markdown", "metadata": {}, "source": [ - "View the full PolicyEngine analysis [here](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=85980®ion=uk&timePeriod=2025&baseline=1) and use our household [calculator](https://policyengine.org/uk/household?focus=intro&reform=85980®ion=uk&timePeriod=2025&baseline=1) to see how these changes affect individual households." + "View the full PolicyEngine analysis [here](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=85980®ion=uk&timePeriod=2025&baseline=1) and use our household [calculator](https://legacy.policyengine.org/uk/household?focus=intro&reform=85980®ion=uk&timePeriod=2025&baseline=1) to see how these changes affect individual households." ] } ], diff --git a/src/posts/articles/winship-individualized-eitc.md b/src/posts/articles/winship-individualized-eitc.md index 17fad996d..9d9209c86 100644 --- a/src/posts/articles/winship-individualized-eitc.md +++ b/src/posts/articles/winship-individualized-eitc.md @@ -1,6 +1,6 @@ On Monday, Scott Winship, senior fellow and the director of the Center on Opportunity and Social Mobility at the American Enterprise Institute, published [“Reforming the EITC to Reduce Single Parenthood and Ease Work-Family Balance”](https://ifstudies.org/blog/reforming-the-eitc-to-reduce-single-parenthood-and-ease-work-family-balance) for the Institute for Family Studies. The blog proposed a set of reforms to the Earned Income Tax Credit, most notably basing eligibility on individual rather than joint earnings for married earners. It would also limit EITC eligibility to filers with combined income below $100,000. This report reviews the individual, budgetary, and distributional impacts of that reform using PolicyEngine. -[**_See how an individualized EITC would affect you._**](https://policyengine.org/us/household?focus=intro&reform=17331®ion=us&timePeriod=2023&baseline=2) +[**_See how an individualized EITC would affect you._**](https://legacy.policyengine.org/us/household?focus=intro&reform=17331®ion=us&timePeriod=2023&baseline=2) ## EITC marriage incentives @@ -14,13 +14,13 @@ PolicyEngine confirms these results, and also provides total net income after ta **Table 1: EITC and net income for a sample household under current law** -| Household | EITC | Net income | -| --------------------------------------------------------------------------------------------------------------------------------- | ------ | ---------- | -| [Single parent of two, $20,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32119) | $6,604 | $35,073 | -| [Single person, no kids, $30,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32120) | $0 | $25,987 | -| Total if unmarried | $6,604 | $61,060 | -| [Married parents of two, $50,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32121) | $1,998 | $51,600 | -| Marriage penalty | $4,606 | $9,460 | +| Household | EITC | Net income | +| ---------------------------------------------------------------------------------------------------------------------------------------- | ------ | ---------- | +| [Single parent of two, $20,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32119) | $6,604 | $35,073 | +| [Single person, no kids, $30,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32120) | $0 | $25,987 | +| Total if unmarried | $6,604 | $61,060 | +| [Married parents of two, $50,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32121) | $1,998 | $51,600 | +| Marriage penalty | $4,606 | $9,460 | The EITC therefore contributes about half of the total marriage penalty faced by this couple, with other tax and benefit provisions contributing the other half. If they marry, they will lose $9,460, or 15% of their net income if unmarried. @@ -32,17 +32,17 @@ Returning to the previous household (if married), they would see their EITC rise **Table 2: EITC and net income for a sample household under Winship’s individualized EITC** -| Household | EITC | Net income | -| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ---------- | -| [Single parent of two, $20,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32119®ion=us&timePeriod=2023&baseline=2&reform=17331) | $6,604 | $35,073 | -| [Single person, no kids, $30,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32120®ion=us&timePeriod=2023&baseline=2&reform=17331) | $0 | $25,987 | -| Total if unmarried | $6,604 | $61,060 | -| [Married parents of two, $50,000 earnings](https://policyengine.org/us/household?focus=householdOutput.netIncome&household=32121®ion=us&timePeriod=2023&baseline=2&reform=17331) | $12,814 | $62,416 | -| Marriage penalty | -$6,210 | -$1,356 | +| Household | EITC | Net income | +| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------- | ---------- | +| [Single parent of two, $20,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32119®ion=us&timePeriod=2023&baseline=2&reform=17331) | $6,604 | $35,073 | +| [Single person, no kids, $30,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32120®ion=us&timePeriod=2023&baseline=2&reform=17331) | $0 | $25,987 | +| Total if unmarried | $6,604 | $61,060 | +| [Married parents of two, $50,000 earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&household=32121®ion=us&timePeriod=2023&baseline=2&reform=17331) | $12,814 | $62,416 | +| Marriage penalty | -$6,210 | -$1,356 | -We can also examine the “shape” of the reform by [varying the head’s earnings](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=17331®ion=us&timePeriod=2023&baseline=2&household=32055), holding the spouse’s earnings constant at $20,000. +We can also examine the “shape” of the reform by [varying the head’s earnings](https://legacy.policyengine.org/us/household?focus=householdOutput.earnings&reform=17331®ion=us&timePeriod=2023&baseline=2&household=32055), holding the spouse’s earnings constant at $20,000. -Under current law (gray), the head starts on the “plateau” of the EITC due to their spouse’s earnings. As they earn more, they get no additional EITC, and then it phases out. In the reform (blue), their spouse’s EITC is constant, and their own EITC stacks atop it until it fully phases around $59,000 earnings. When the head earns $80,000, they hit the $100,000 AGI cap, and both the head and spouse lose their EITC, creating a [cliff](https://policyengine.org/us/blog/how-would-reforms-affect-cliffs). +Under current law (gray), the head starts on the “plateau” of the EITC due to their spouse’s earnings. As they earn more, they get no additional EITC, and then it phases out. In the reform (blue), their spouse’s EITC is constant, and their own EITC stacks atop it until it fully phases around $59,000 earnings. When the head earns $80,000, they hit the $100,000 AGI cap, and both the head and spouse lose their EITC, creating a [cliff](https://legacy.policyengine.org/us/blog/how-would-reforms-affect-cliffs). ![](https://cdn-images-1.medium.com/max/3040/0*0EhFGZyfMcDJ5bi5) @@ -54,25 +54,25 @@ The difference between these lines indicates the net effect of the reform. For s PolicyEngine’s microsimulation model estimates budgetary and distributional impacts of policy reforms. The model runs over the Current Population Survey and is static: it does not assume any behavioral effects with respect to labor supply, marriage, child development, fertility, economic growth, or other factors. The model finds that Winship’s reform would: -- [Cost $38.2 billion in 2023](https://policyengine.org/us/policy?focus=policyOutput.netIncome&reform=17331®ion=us&timePeriod=2023&baseline=2) +- [Cost $38.2 billion in 2023](https://legacy.policyengine.org/us/policy?focus=policyOutput.netIncome&reform=17331®ion=us&timePeriod=2023&baseline=2) -- [Benefit 13% of the population](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) +- [Benefit 13% of the population](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) -- [Lower poverty by 0.7% and child poverty by 1.3%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2), [disproportionately among Hispanic Americans](https://policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) +- [Lower poverty by 0.7% and child poverty by 1.3%](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2), [disproportionately among Hispanic Americans](https://legacy.policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) -- [Lower deep poverty by 0.4% and deep child poverty by 0.6%](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) +- [Lower deep poverty by 0.4% and deep child poverty by 0.6%](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) -- [Lower the Gini index of income inequality by 0.7%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) +- [Lower the Gini index of income inequality by 0.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) -- [Increase the share of households facing cliffs by 16%](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=17331®ion=us&timePeriod=2023&baseline=2)[^1] +- [Increase the share of households facing cliffs by 16%](https://legacy.policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=17331®ion=us&timePeriod=2023&baseline=2)[^1] [^1]: Winship shared with me that he intended for legislative staff to shift the cliff to a phase-out. -[Households in the fifth income decile](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) would gain the largest share of their income, at 1.4%. +[Households in the fifth income decile](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=17331®ion=us&timePeriod=2023&baseline=2) would gain the largest share of their income, at 1.4%. ![](https://cdn-images-1.medium.com/max/3200/0*dt4R1nm9QxO11v28) -[The reform would benefit 13% of Americans](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=17331®ion=us&timePeriod=2023&baseline=2), and 8% of Americans would see their net income rise at least 5% (dark green). Gains are most concentrated in the fifth income decile, 29% of whom would benefit. +[The reform would benefit 13% of Americans](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=17331®ion=us&timePeriod=2023&baseline=2), and 8% of Americans would see their net income rise at least 5% (dark green). Gains are most concentrated in the fifth income decile, 29% of whom would benefit. ![](https://cdn-images-1.medium.com/max/3200/0*gSnAHg8M-S9Hxhv1) @@ -82,7 +82,7 @@ When Winship first released his blog post, he estimated that the reform would co [^2]: Winship and Yang did not report distributional impacts. -To produce this cost estimate, Winship ran the open source Tax-Calculator microsimulation model over the IRS Public Use File (PUF). As a sample of tax returns, analysts generally regard the PUF as a more accurate source of income data than the CPS — and we are currently [incorporating that information into our data](https://policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis). However, the PUF lacks information on each spouse’s earnings, since filers only need to report the combined total on tax forms. To fill this gap, the Tax-Calculator project determines the average split of income between filer and spouse from the CPS, and applies that equally to PUF records. +To produce this cost estimate, Winship ran the open source Tax-Calculator microsimulation model over the IRS Public Use File (PUF). As a sample of tax returns, analysts generally regard the PUF as a more accurate source of income data than the CPS — and we are currently [incorporating that information into our data](https://legacy.policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis). However, the PUF lacks information on each spouse’s earnings, since filers only need to report the combined total on tax forms. To fill this gap, the Tax-Calculator project determines the average split of income between filer and spouse from the CPS, and applies that equally to PUF records. PolicyEngine instead uses the CPS directly, where respondents report the income of each person separately. As a result, we capture the diversity of couples with respect to spousal earnings splits. Because this reform disproportionately affects those with large earnings differences between spouses, this difference is material. We believe our $38 billion estimate is more accurate, because it uses income splits directly from the Current Population Survey (CPS). @@ -92,7 +92,7 @@ This instance taught three lessons in our view: 1. **Open source models facilitate better policy analysis.** We were only able to diagnose the discrepancy because the [Tax-Calculator](https://github.com/PSLmodels/Tax-Calculator/blob/master/taxcalc/calcfunctions.py#L2327) and [Tax-Data](https://github.com/PSLmodels/taxdata/blob/master/taxdata/puf/finalprep.py#L219) code are publicly available on GitHub, as was AEI analyst Bodi Yang’s [code](https://github.com/bodiyang/EITC-reform/tree/main) that produced the estimates. Those who have identified opportunities to improve our own open source software have improved our policy analysis as well. -1. **The Current Population Survey outperforms the IRS Public Use File for some policy questions.** We use the CPS to capture personal relationships within a household, benefit receipt, poverty, and other factors absent from the sample of tax returns in the IRS Public Use File. This comes at a cost: the CPS truncates income more than the PUF, has more measurement error, and lacks some characteristics like specific deductions. We will address those deficiencies by [integrating the datasets](https://policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) later this year, but in the meantime, this analysis revealed a particular research question where the CPS can outperform the PUF. +1. **The Current Population Survey outperforms the IRS Public Use File for some policy questions.** We use the CPS to capture personal relationships within a household, benefit receipt, poverty, and other factors absent from the sample of tax returns in the IRS Public Use File. This comes at a cost: the CPS truncates income more than the PUF, has more measurement error, and lacks some characteristics like specific deductions. We will address those deficiencies by [integrating the datasets](https://legacy.policyengine.org/us/blog/enhancing-the-current-population-survey-for-policy-analysis) later this year, but in the meantime, this analysis revealed a particular research question where the CPS can outperform the PUF. 1. **Stochastic imputations produce more realistic data.** If Tax-Data applied a stochastic technique, such as [quantile regression](https://towardsdatascience.com/quantile-regression-from-linear-models-to-trees-to-deep-learning-af3738b527c3), it would have produced greater spread of the spousal earnings share, compared to the constant approach. When we integrate PUF information into the CPS, we will do so using the [survey-enhance](https://github.com/PolicyEngine/survey-enhance) software package we developed to combine the accuracy of machine learning with the stochasticity of quantile regression ([here’s our working paper](https://github.com/PolicyEngine/survey-enhance/blob/main/docs/paper/project_paper.pdf)). diff --git a/src/posts/articles/wyden-smith-ctc.md b/src/posts/articles/wyden-smith-ctc.md index bdcfb4b3b..dd21dc67b 100644 --- a/src/posts/articles/wyden-smith-ctc.md +++ b/src/posts/articles/wyden-smith-ctc.md @@ -10,7 +10,7 @@ From 2023 to 2025 — in our static model assuming full take-up — we project t - Lower the Gini index of income inequality by 0.2% -[**_Click here to see how the Wyden-Smith proposal would affect your own household’s 2023 taxes._**](https://policyengine.org/us/household?focus=intro&reform=44066®ion=us&timePeriod=2023&baseline=2) +[**_Click here to see how the Wyden-Smith proposal would affect your own household’s 2023 taxes._**](https://legacy.policyengine.org/us/household?focus=intro&reform=44066®ion=us&timePeriod=2023&baseline=2) ## How Wyden-Smith Would Reform the Child Tax Credit @@ -28,7 +28,7 @@ As the TCJA is set to expire after 2025, including its CTC expansion provisions, ## Impact on a Household -Shortly after Guggenheim reported the reform, Sharon Parrott, President of the [Center on Budget and Policy Priorities](https://www.cbpp.org/), [tweeted an example](https://twitter.com/ParrottCBPP/status/1745497766137053289): “A mom w/ 2 kids who earns $15k wld get a $3600 #CTC in ’23, up from $1,875 under current law.” PolicyEngine reproduces that example, showing they [gain $1,725](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=44066®ion=us&timePeriod=2023&baseline=2&household=39725). Rather than being partly phased in to the $3,200 ACTC ($1,600 for each of two children), the faster phase-in (30% instead of 15%) brings them all the way up to the $3,600 ACTC. +Shortly after Guggenheim reported the reform, Sharon Parrott, President of the [Center on Budget and Policy Priorities](https://www.cbpp.org/), [tweeted an example](https://twitter.com/ParrottCBPP/status/1745497766137053289): “A mom w/ 2 kids who earns $15k wld get a $3600 #CTC in ’23, up from $1,875 under current law.” PolicyEngine reproduces that example, showing they [gain $1,725](https://legacy.policyengine.org/us/household?focus=householdOutput.netIncome&reform=44066®ion=us&timePeriod=2023&baseline=2&household=39725). Rather than being partly phased in to the $3,200 ACTC ($1,600 for each of two children), the faster phase-in (30% instead of 15%) brings them all the way up to the $3,600 ACTC. **Figure 1: Refundable Child Tax Credit with respect to earnings for a single parent of two children, under current law and the Wyden-Smith reform proposal.** @@ -54,26 +54,26 @@ Breaking this down between the provisions reveals that they amplify each other: **Table 1: Cost of Wyden-Smith Child Tax Credit reform by provision and year.** -| | **Refundable amount** | **Phase-in rate** | **Combined** | -| ------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | -| **2023** | [\$0.5 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&timePeriod=2023®ion=us&baseline=2&reform=44046) | [\$3.6 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2023&baseline=2) | [\$5.1 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44066®ion=us&timePeriod=2023&baseline=2) | -| **2024** | [\$0.4 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44043®ion=us&timePeriod=2024&baseline=2) | [\$4.1 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2024&baseline=2) | [\$5.5 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44099®ion=us&timePeriod=2024&baseline=2) | -| **2025** | [\$0.6 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=43895®ion=us&timePeriod=2024&baseline=2) | [\$4.1 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2024&baseline=2) | [\$5.9 billion](https://policyengine.org/us/policy?reform=44131&focus=policyOutput.policyBreakdown®ion=us&timePeriod=2024&baseline=2) | -| **2023-2025** | \$1.5 billion | \$11.8 billion | \$16.4 billion | +| | **Refundable amount** | **Phase-in rate** | **Combined** | +| ------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | +| **2023** | [\$0.5 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&timePeriod=2023®ion=us&baseline=2&reform=44046) | [\$3.6 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2023&baseline=2) | [\$5.1 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44066®ion=us&timePeriod=2023&baseline=2) | +| **2024** | [\$0.4 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44043®ion=us&timePeriod=2024&baseline=2) | [\$4.1 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2024&baseline=2) | [\$5.5 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44099®ion=us&timePeriod=2024&baseline=2) | +| **2025** | [\$0.6 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=43895®ion=us&timePeriod=2024&baseline=2) | [\$4.1 billion](https://legacy.policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=44030®ion=us&timePeriod=2024&baseline=2) | [\$5.9 billion](https://legacy.policyengine.org/us/policy?reform=44131&focus=policyOutput.policyBreakdown®ion=us&timePeriod=2024&baseline=2) | +| **2023-2025** | \$1.5 billion | \$11.8 billion | \$16.4 billion | -Households in the third income decile benefit most on both an [absolute](https://policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) and [relative](https://policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) basis. They benefit more than lower income households who have fewer children and don’t meet the earnings requirement, and more than higher income households who take the non-refundable CTC instead. +Households in the third income decile benefit most on both an [absolute](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileAverageImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) and [relative](https://legacy.policyengine.org/us/policy?focus=policyOutput.decileRelativeImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) basis. They benefit more than lower income households who have fewer children and don’t meet the earnings requirement, and more than higher income households who take the non-refundable CTC instead. **Figure 4: Impact of Wyden-Smith Child Tax Credit reform proposal by income decile.** ![](https://cdn-images-1.medium.com/max/2580/0*ZO7CVih4HQQ6BiN4) -These provisions [benefit 6.4% of US residents](https://policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=44066®ion=us&timePeriod=2023&baseline=2): 2.3% who gain at least 5% of net income, and 4.1% who gain less. Again, the prevalence of gains concentrates in the third income decile. +These provisions [benefit 6.4% of US residents](https://legacy.policyengine.org/us/policy?focus=policyOutput.intraDecileImpact&reform=44066®ion=us&timePeriod=2023&baseline=2): 2.3% who gain at least 5% of net income, and 4.1% who gain less. Again, the prevalence of gains concentrates in the third income decile. **Figure 5: Population share gaining from Wyden-Smith Child Tax Credit reform proposal by income decile.** ![](https://cdn-images-1.medium.com/max/2564/0*buBusyS9y4OmYCjA) -The number of people with resources below the poverty line would fall 1.3%, disproportionately [children](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (4.3%), [Hispanics](https://policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (2.4%), and [men](https://policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (1.5%). The number of children in deep poverty would also [fall 0.7%](https://policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2), and the Gini index of income inequality would [fall 0.2%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=44066®ion=us&timePeriod=2023&baseline=2). +The number of people with resources below the poverty line would fall 1.3%, disproportionately [children](https://legacy.policyengine.org/us/policy?focus=policyOutput.povertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (4.3%), [Hispanics](https://legacy.policyengine.org/us/policy?focus=policyOutput.racialPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (2.4%), and [men](https://legacy.policyengine.org/us/policy?focus=policyOutput.genderPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2) (1.5%). The number of children in deep poverty would also [fall 0.7%](https://legacy.policyengine.org/us/policy?focus=policyOutput.deepPovertyImpact&reform=44066®ion=us&timePeriod=2023&baseline=2), and the Gini index of income inequality would [fall 0.2%](https://legacy.policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=44066®ion=us&timePeriod=2023&baseline=2). Results are similar in 2024 and 2025, with child poverty falling by 3.8% or 3.9%, rather than 4.3%. @@ -85,4 +85,4 @@ The estimated impacts of the first two provisions on households include adjustme From 2023 to 2025, the first two provisions would cost $16.4 billion, cut child poverty about 4%, benefit about 6% of Americans, and reduce deep poverty and income inequality. These impacts are relatively stable across the three years, and we do not project further due to the expiration of the Tax Cuts and Jobs Act after 2025. -As negotiations proceed, we will continue to develop our software platform to support a range of Child Tax Credit analyses, including those like the third provision to base the credit on prior years’ income (which also require further definition). Stay tuned and [**check out our personalized calculator**](https://policyengine.org/us/household?focus=intro&reform=44066®ion=us&timePeriod=2023&baseline=2) to see how the reform would affect you. +As negotiations proceed, we will continue to develop our software platform to support a range of Child Tax Credit analyses, including those like the third provision to base the credit on prior years’ income (which also require further definition). Stay tuned and [**check out our personalized calculator**](https://legacy.policyengine.org/us/household?focus=intro&reform=44066®ion=us&timePeriod=2023&baseline=2) to see how the reform would affect you. diff --git a/src/posts/articles/young-child-exemption-two-child-limit.md b/src/posts/articles/young-child-exemption-two-child-limit.md index 02dee1f6e..28f04e8d9 100644 --- a/src/posts/articles/young-child-exemption-two-child-limit.md +++ b/src/posts/articles/young-child-exemption-two-child-limit.md @@ -29,8 +29,8 @@ We model the first of these options: exempting parents of children under 5 years # Economic impact of the reform -Using PolicyEngine’s microsimulation model, we estimate that exempting parents of children under 5 years old from the two-child limit would cost [£504 million](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=77114®ion=uk&timePeriod=2025&baseline=1) in 2025: [£480 million](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=77113®ion=uk&timePeriod=2025&baseline=1) from UC and [£25 million](https://policyengine.org/uk/policy?reform=77112&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) from the CTC. +Using PolicyEngine’s microsimulation model, we estimate that exempting parents of children under 5 years old from the two-child limit would cost [£504 million](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=77114®ion=uk&timePeriod=2025&baseline=1) in 2025: [£480 million](https://legacy.policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=77113®ion=uk&timePeriod=2025&baseline=1) from UC and [£25 million](https://legacy.policyengine.org/uk/policy?reform=77112&focus=policyOutput.policyBreakdown®ion=uk&timePeriod=2025&baseline=1) from the CTC. -The exemption would [reduce overall poverty by 0.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=77113®ion=uk&timePeriod=2025&baseline=1) and child poverty by 0.6%. It would also reduce the Gini index of income inequality by 0.09%. 5% of Britons would benefit from the reform, with those in the fifth income decile most likely to gain. +The exemption would [reduce overall poverty by 0.3%](https://legacy.policyengine.org/uk/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=77113®ion=uk&timePeriod=2025&baseline=1) and child poverty by 0.6%. It would also reduce the Gini index of income inequality by 0.09%. 5% of Britons would benefit from the reform, with those in the fifth income decile most likely to gain. -We invite users to experiment with other age thresholds for this exemption in the [PolicyEngine interface](https://policyengine.org/uk/policy?focus=gov.contrib.two_child_limit.age_exemption.universal_credit&reform=77113®ion=uk&timePeriod=2025&baseline=1). +We invite users to experiment with other age thresholds for this exemption in the [PolicyEngine interface](https://legacy.policyengine.org/uk/policy?focus=gov.contrib.two_child_limit.age_exemption.universal_credit&reform=77113®ion=uk&timePeriod=2025&baseline=1).