Merge pull request #2222 from andersonfrailey/larsonproposal

Implement New Payroll Tax Proposal from Rep. Larson

taxcalc/calcfunctions.py

@@ -88,8 +88,8 @@ def BenefitPrograms(calc):
 @iterate_jit(nopython=True)
 def EI_PayrollTax(SS_Earnings_c, e00200p, e00200s, pencon_p, pencon_s,
                   FICA_ss_trt, FICA_mc_trt, ALD_SelfEmploymentTax_hc,
-                  e00900p, e00900s, e02100p, e02100s, k1bx14p, k1bx14s,
-                  payrolltax, ptax_was, setax, c03260, ptax_oasdi,
+                  SS_Earnings_thd, e00900p, e00900s, e02100p, e02100s, k1bx14p,
+                  k1bx14s, payrolltax, ptax_was, setax, c03260, ptax_oasdi,
                   sey, earned, earned_p, earned_s):
     """
     Compute part of total OASDI+HI payroll taxes and earned income variables.
@@ -126,11 +126,22 @@ def EI_PayrollTax(SS_Earnings_c, e00200p, e00200s, pencon_p, pencon_s,
     setax_s = setax_ss_s + setax_mc_s
     setax = setax_p + setax_s
 
+    # compute additional OASDI taxes on the sum of gross wage-and-salary income
+    # and taxable self employment income
+    sey_frac = 1.0 - 0.5 * FICA_ss_trt
+    was_plus_sey_p = gross_was_p + max(0., sey_p * sey_frac)
+    was_plus_sey_s = gross_was_s + max(0., sey_s * sey_frac)
+    additional_ss_income_p = max(0., was_plus_sey_p - SS_Earnings_thd)
+    additional_ss_income_s = max(0., was_plus_sey_s - SS_Earnings_thd)
+    additional_payrolltax = (additional_ss_income_p * FICA_ss_trt +
+                             additional_ss_income_s * FICA_ss_trt)
+
     # compute part of total regular payroll taxes for filing unit
-    payrolltax = ptax_was + setax
+    payrolltax = ptax_was + setax + additional_payrolltax
 
     # compute OASDI part of payroll taxes
-    ptax_oasdi = ptax_ss_was_p + ptax_ss_was_s + setax_ss_p + setax_ss_s
+    ptax_oasdi = (ptax_ss_was_p + ptax_ss_was_s + setax_ss_p + setax_ss_s +
+                  additional_payrolltax)
 
     # compute earned* variables and AGI deduction for
     # "employer share" of self-employment tax, c03260

taxcalc/policy_current_law.json

@@ -89,6 +89,30 @@
         "compatible_data": {"puf": true, "cps": true}
     },
 
+    "_SS_Earnings_thd": {
+        "long_name": "Additional Taxable Earnings Threshold for Social Security",
+        "description": "Wages and self-employment income above this threshold are subjected to Social Security (OASDI) payroll tax in addition to earnings below the maximum taxable earnings threshold.",
+        "section_1": "Payroll Taxes",
+        "section_2": "Social Security FICA",
+        "irs_ref": "",
+        "notes": "",
+        "row_var": "FLPDYR",
+        "row_label": ["2013"],
+        "start_year": 2013,
+        "cpi_inflatable": true,
+        "cpi_inflated": false,
+        "col_var": "",
+        "col_label": "",
+        "boolean_value": false,
+        "integer_value": false,
+        "value": [9e99],
+        "range": {"min": 0, "max": 9e99},
+        "out_of_range_minmsg": "",
+        "out_of_range_maxmsg": "",
+        "out_of_range_action": "stop",
+        "compatible_data": {"puf": true, "cps": true}
+    },
+
     "_FICA_mc_trt": {
         "long_name": "Medicare payroll tax rate",
         "description": "Medicare FICA rate, including both employer and employee.",

taxcalc/reforms/Larson2019.json

@@ -0,0 +1,28 @@
+// Title: The Social Security 2100 Act: Rep. John Larson
+// Reform_File_Author: Anderson Frailey
+// Reform_Reference: https://larson.house.gov/social-security-2100
+// Reform_Baseline: policy_current_law.json
+// Reform_Description:
+// - Raise threshold for Social Security benefit taxability to (1)
+// - Make wage and self-employment income above $400,000 subject to FICA taxes (2)
+// - Phase in an increase to the contribution rate starting in 2020 (3)
+// Reform_Parameter_Map:
+// - 1: _SS_thd50, _SS_thd85
+// - 2: _SS_Earnings_thd
+// - 3: _FICA_ss_trt
+{
+    "policy": {
+        "_SS_thd50": {"2019": [[50000, 100000, 50000, 50000, 50000]]},
+        "_SS_thd85": {"2019": [[50000, 100000, 50000, 50000, 50000]]},
+        "_SS_Earnings_thd": {"2019": [400000]},
+        "_FICA_ss_trt": {"2020": [0.125],
+                         "2021": [0.126],
+                         "2022": [0.127],
+                         "2023": [0.128],
+                         "2024": [0.129],
+                         "2025": [0.130],
+                         "2026": [0.131],
+                         "2027": [0.132],
+                         "2028": [0.133]}
+    }
+}

taxcalc/reforms/Larson2019.out

@@ -0,0 +1,10 @@
+RECID,c00100,standard,c04800,iitax,payrolltax
+11,30000.00,12519.07,17480.93,1898.97,4620.00
+12,60000.00,12519.07,47480.93,6209.66,9240.00
+13,460000.00,12519.07,447480.93,131256.26,40742.11
+21,60000.00,25038.14,34961.86,-202.06,9240.00
+22,120000.00,25038.14,94961.86,8419.33,18480.00
+23,240000.00,25038.14,214961.86,35675.82,36960.00
+31,30000.00,18778.60,11221.40,-2805.42,4620.00
+32,60000.00,18778.60,41221.40,2662.80,9240.00
+33,120000.00,18778.60,101221.40,14883.93,18480.00