Internet TAXSIM

Version 2.(BETA)

TAXSIM is the NBER's FORTRAN program for calculating liabilities under US Federal and State income tax laws from individual data. Scholars interested in using TAXSIM to calculate tax libiabilities should follow the these instructions for submitting data. The program itself is not released.

Version 2.0Beta introduces:

File to upload:
Column Labels: Yes No
Summary: Yes No

Instructions for preparing data for TAXSIM.

We use the little known file upload feature of recent browsers. This is supported in Netscape 3.0 and MS IE 4.0, so you may have to upgrade or use a different computer. When the data file is ready enter the filename in the box and select "calculate".

Please submit a rectangular delimited ASCII file with one case per record, and the following variables for each case:

  1. Case ID (must be numeric)
  2. Tax year (4 digits between 1979 and 1999, but state must be 0 if year is after 1993 because we haven't finished coding the state tax laws).
  3. State (see list below,but must be zero for years after 1993).
  4. Marital Status (see list below)
  5. Dependent Exemptions (number of children)
  6. Age exemptions (number of taxpayers over 65 years of age)
  7. Wage and salary income of Taxpayer
  8. Wage and salary income of Spouse
  9. Dividend income
  10. Other property income, including Self-employment, may be negative.
  11. Pensions
  12. Gross Social Security Income
  13. Other transfer Income (Welfare, municipal bond interest)
  14. Rent Paid (for state property tax rebates)
  15. Property taxes paid
  16. Itemized deductions except state income tax and local property tax
  17. Child care expenses
  18. Unemployment compensation (New Variable in Version 2.)

Marital Status:

  1. single
  2. joint
  3. head of household (single parent)
State: 0.state unknown 1.alabama 2.alaska 3.arizona 4.arkansas 5.california 6.colorado 7.conn 8.delaware 9.dc 10.florida 11.georgia 12.hawaii 13.idaho 14.illinois 15.indiana 16.iowa 17.kansas 18.kentucky 19.louisiana 20.maine 21.maryland 22.mass 23.michigan 24.minnesota 25.mississippi 26.missouri 27.montana 28.nebraska 29.nevada 30.nh 31.nj 32.nm 33.ny 34.nc 35.nd 36.ohio 37.oklahoma 38.oregon 39.penn 40.ri 41.sc 42.sd 43.tenn. 44.texas 45.utah 46.vermont 47.virginia 48.washington 49.wv 50.wisconsin 51.wyoming 52.other

This is a simplified list of input variables selected to encompass what might be available in a non-tax oriented survey such as the CPS, CEX, PSID, etc. The items are rich enough to cover the ordinary and supertax brackets, the earned income credit, the child care credit, the partial taxation of Social Security, and UI, the secondary earner deduction, and other important features of the tax code. Obviously ignored are the capital gains deduction, limits, floors and ceilings on deductions, adjustments, tax preferences, etc. These are available in the full model, but are not included here in order to simplify matters.

Here is a sample entry for a single parent of one child in Idaho with only labor income, and $2000 in child care expenses. Notice that no missing value indicator is used - zero amounts are coded as zero.

12345 1989 13 3 1 0 20000 0 0 0 0 0 0 0 0 0 2000 0

The file may include any number of such lines. While the format is flexible, and values may be of variable size, each value must be separated from the next by one or more spaces or a single comma. We cannot read .prn files, or any file that uses commas to mark thousands. Spreadsheet files of any kind can not be read. Before uploading your file please check for the following common errors:

Some users are concerned about imputations. Internet TAXSIM doesn't do any. Anything not listed above becomes a zero on the Form 1040. Zero is always a valid entry, although it may be inaccurate.

TAXSIM will calculate the federal and state tax liability, and also the additional liability on an additional $100 in nonwage income. Because that rate is sometimes implausible due to large notches, we now also include the bracket rates from the tax tables. These results will be returned to you together with a summary by state of average incomes and rates. We have gone to considerable lengths to reduce the number of glitches showing up as implausible marginal rates, including smoothing some small notches by interpolation. A few notches are too large for that and will show up in rare cases. If you are concerned about any particular case, isolate that case and send it to us for review.

If you suspect any case has been calculated incorrectly, please extract that case (or a exemplar, if there are many cases) and email it to me with a statement of how you think the tax calculation ought to have been made. I will get back to you within a couple of days with an explanation or a fix. It is important that you not send large files or attachments. Just send an email with a few cases, the response and the reason you believe the response to be in error.

Some users have expressed concern about our ability to process large files, but files up to 50,000 cases are not a problem. Larger files should probably be broken up and run in the evening. Anytime you are getting timed out, please wait several hours and try again, as the time-outs are a sign that something is overloaded.

Users of the AHEAD and HRS are reminded that they are not permitted to send state identifiers to us. If such users need state tax calculations they should send each record 51 times, once for each possible state, and select the correct record from among the returned records.

For more information about TAXSIM see:

Feenberg, Daniel Richard, and Elizabeth Coutts, An Introduction to the TAXSIM Model, Journal of Policy Analysis and Management vol 12 no 1, Winter 1993, pages 189-194.

This paper and this URL (http://www.nber.org/~taxsim/taxsim.html) should be cited if any results from TAXSIM are circulated or published. If you intend to make any serious scholarly (or other) use of Internet TAXSIM you should speak with about your project on the telephone. I am at 617-588-0343 and can offer advice etc.

Daniel Feenberg
NBER
1050 Mass Ave.
Cambridge MA 02138
617-588-0343
feenberg@nber.org