Setting SALT deduction to zero #160
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Could we have an option to set the |
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An option would be fine, but I could start testing itemization right away if I knew the location of the variable and it seems a shame to make an option just for this one variable when there is a general purpose system in place that will work for any variable (if I knew how to use it). |
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The variable is |
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@feenberg: How do you specify in the taxsim CLI whether to skip SALT? We'd like to mirror the interface in the emulator. |
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For the validation of both calculators I need a way to force itemization.
I thought of two possible routes to that. I could set a high level of
proptax or of mortgage. Proptax wouldn't work because of the SALT limit,
and mortgage wasn't supported by the emulator. I asked about changing the
SALT limit in the emulator, since there appeared to be a problem with
supporting mortgage. It appears that mortgage is now supported, so it is
less urgent that I be able to change the SALT limit.
However, in answer to your actual question, I have a bunch of options
numbered 1 through 100. Those that are currently viable are documented
here:
https://taxsim.nber.org/taxsimtest/options.html
During testing I always turn off the deduction of state income tax on the
federal form by setting option 30, which stops the calculator from
iterating. The iteration makes debugging much more difficult. It is the
iteration which allows state income tax to enter the data for calculating
federal tax. Without the option, the calculator iterates 3 times, each
time using the last calculation of state income tax in potential itemized
deductions.
I am guessing that the emulator doesn't have a mechanism yet for including
the state income tax in federal itemized deductions. My thought is that
rather than force that issue now while we were in the validation phase, I
would just use mortgage to force itemization.
I somehow don't think imitating my option syntax is optimal. Maybe it is
something that could be discussed.
I acutally did some preparation for an entirely new method for specifying
options, that would be once per file rather than once per record. This is
described at:
https://taxsim.nber.org/taxsimtest/parameters.html
I should add the option vectors to this. Note that the namelist is
optional. I can do an optional namelist easily in Fortran, but a Python
module to read namelists probably won't let you do that.
https://f90nml.readthedocs.io/en/latest/
I think we should wait for the validation to settle down before thinking
hard about this. There are architectural issues about integrating the two
calculators that need to be considered. One that concerns me is, will
Taxsim be presented with a file of records and then the results merged
with the PSL calculations, or will each record be sent to the appropriate
calculator as it is encountered in the input data? I have a dll version of
taxsim with no per run overhead, so either is practical for Taxsim.
Something to keep in mind, but not to decide now.
It is possible we will decide that the setting of options will not be
unified between the two calculators. Note that the bulk of my options
were for a particular user, and were never used by someone else. That
explains the small number of documented options.
I think we meet again on Tuesday - we can discuss this then.
Dan
617-682-6204
…On Thu, 2 Jan 2025, Max Ghenis wrote:
@feenberg: How do you specify in the taxsim CLI whether to skip SALT? We'd like to mirror the interface in the emulator.
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#160 (comment)
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I wasn't clear about your actual question. I disable SALT by setting
proptax to zero in addition to disabling iternation (so that state income
tax remains at its initial value of zero).
Dan
617-682-6204
…On Thu, 2 Jan 2025, Daniel Feenberg wrote:
For the validation of both calculators I need a way to force itemization. I
thought of two possible routes to that. I could set a high level of proptax
or of mortgage. Proptax wouldn't work because of the SALT limit, and mortgage
wasn't supported by the emulator. I asked about changing the SALT limit in
the emulator, since there appeared to be a problem with supporting mortgage.
It appears that mortgage is now supported, so it is less urgent that I be
able to change the SALT limit.
However, in answer to your actual question, I have a bunch of options
numbered 1 through 100. Those that are currently viable are documented here:
https://taxsim.nber.org/taxsimtest/options.html
During testing I always turn off the deduction of state income tax on the
federal form by setting option 30, which stops the calculator from iterating.
The iteration makes debugging much more difficult. It is the iteration which
allows state income tax to enter the data for calculating federal tax.
Without the option, the calculator iterates 3 times, each time using the last
calculation of state income tax in potential itemized deductions.
I am guessing that the emulator doesn't have a mechanism yet for including
the state income tax in federal itemized deductions. My thought is that
rather than force that issue now while we were in the validation phase, I
would just use mortgage to force itemization.
I somehow don't think imitating my option syntax is optimal. Maybe it is
something that could be discussed.
I acutally did some preparation for an entirely new method for specifying
options, that would be once per file rather than once per record. This is
described at:
https://taxsim.nber.org/taxsimtest/parameters.html
I should add the option vectors to this. Note that the namelist is optional.
I can do an optional namelist easily in Fortran, but a Python module to read
namelists probably won't let you do that.
https://f90nml.readthedocs.io/en/latest/
I think we should wait for the validation to settle down before thinking hard
about this. There are architectural issues about integrating the two
calculators that need to be considered. One that concerns me is, will Taxsim
be presented with a file of records and then the results merged with the PSL
calculations, or will each record be sent to the appropriate calculator as it
is encountered in the input data? I have a dll version of taxsim with no per
run overhead, so either is practical for Taxsim. Something to keep in mind,
but not to decide now.
It is possible we will decide that the setting of options will not be unified
between the two calculators. Note that the bulk of my options
were for a particular user, and were never used by someone else. That
explains the small number of documented options.
I think we meet again on Tuesday - we can discuss this then.
Dan
617-682-6204
On Thu, 2 Jan 2025, Max Ghenis wrote:
> @feenberg: How do you specify in the taxsim CLI whether to skip SALT? We'd
> like to mirror the interface in the emulator.
>
> --
> Reply to this email directly or view it on GitHub:
> #160 (comment)
> You are receiving this because you were mentioned.
>
> Message ID:
> ***@***.***>
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OK since we don't do the iteration we don't have an exact analog, so it seems like we should proceed with this solution. Dan, if you add a less taxsim-implementation-specific taxsim CLI arg to zero out the SALT deduction in the future, we can emulate that instead. You could also adopt the standard in #171 of |
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@feenberg are we aiming to disable just the federal state and local tax deduction or also the state equivalents, if present? |
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There is so much confusion on this issue.
Two weeks ago, I couldn't test some states at all. This was because those
states calculate the standard deduction, and I didn't have a way to force
itemization. I could provide a large proptax number, but the calculator
would cut that to 10,000 and the taxpayer would take the standard
deduction, which the calculator didn't provide. There seemed to be some
difficult in allowing the emulator to support the mortgage variable, which
I initially thought was a good way to force itemization. So I thought as
an alternative I would change the SALT limit to infinity in the emulator.
I thought that would be easy, but my request has generated much confusion
at your end.
In the fullness of time, we have to deal with a completly separate issue,
beyond validation, which is what to do about the deductibility of state
income tax on the federal return. Normal Taxsim handles this by iterating
3 times, substituting the calculated state tax into the data for the
federal calculator on each iteration. During validation, I have suppressed
the iteration, so no deduction for state income tax is taken on the
federal return. This is fine for validation, but not for production.
Maybe we can settle this tomorrow morning? Can someone send me the
appropriate link?
Daniel Feenberg
617-682-6204
…On Mon, 6 Jan 2025, Pavel Makarchuk wrote:
@feenberg are we aiming to disable **just** the federal state and local tax deduction or also the state equivalents, if present?
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I want to set the SALT maximum deduction to zero in the emulator. I can do this in Taxsim and it makes testing itemized deductions much easier (when mortgage is recognized). I looked for the file
/policyengine_us/parameters/gov/irs/deductions/itemized/salt_and_real_estate/cap.yamlbut I can't even find policyengine_us, in spite of the fact that it is clearly working.
If SALT is deducted on the federal return, it makes for confusion when diagnosing problems in states that allow a federal deduction. When working with Martin we always turned this off.
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