Fix minor bugs associated with the new _SS_Earnings_thd policy parameter #2267
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Codecov Report
@@ Coverage Diff @@
## master #2267 +/- ##
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Coverage 100% 100%
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Files 12 12
Lines 2995 2998 +3
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+ Hits 2995 2998 +3
Continue to review full report at Codecov.
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Codecov Report
@@ Coverage Diff @@
## master #2267 +/- ##
======================================
Coverage 100% 100%
======================================
Files 12 12
Lines 2995 2997 +2
======================================
+ Hits 2995 2997 +2
Continue to review full report at Codecov.
|
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Recently we added a new policy parameter, called
_SS_Earnings_thd, to enable characterization of OASDI payroll tax reforms that tax earnings above a threshold (as well as tax earnings under a ceiling, as under current law). Examples, of this kind of reform are the Larson reform and the Sanders-DeFazio reform.The code before this pull request produces correct estimates of those reforms' effect on payroll tax liabilities because those reforms propose that the
_SS_Earnings_thdparameter is not indexed (that is, it is fixed in nominal terms). However, users of Tax-Calculator might want to specify a reform that made this parameter be indexed. This pull request indexes the_SS_Earnings_thdparameter using wages (not prices as for the income tax parameters), just as the_SS_Earnings_cparameter is wage indexed. The SSA Office of the Chief Actuary's analyses of these the reforms confirms that, if indexed, this parameter would be wage (not price) indexed.The code before this pull request produces incorrect MTRs on earnings for high-earnings individuals under these reforms when the
Calculator.mtrmethod is called with itswrt_full_compensationargument equal to True, which is its default value. Again, this bug would only affect MTR values (not payroll tax liabilities) for a few high-earners under these kinds of reforms.