Because Tax-Calculator itself does only static analysis of federal individual income and payroll taxes, it must interact with other models in order to analyze business taxes or conduct non-static analysis. These other models typically use Tax-Calculator to estimate reform-induced changes in after-tax incomes and marginal tax rates, and then use that information to calculate how other taxes or non-static behavior cause changes in individual incomes or expenses. These changes are then fed back to Tax-Calculator so that individual tax liabilities, as well as aggregate and distribution results, can be recalculated. All these interactions between Tax-Calculator and other models are handled by Tax-Brain.

The future development of Tax-Calculator itself will focus on the following activities:

  • Fix bugs in tax-calculation logic.

  • Add new policy parameters to enable parametric simulation of new reforms.

  • Update actual policy parameter values as they become available each year.

  • Update filing-unit data used by Tax-Calculator as they become available.

  • Add ability to use publicly-available synthetic filing-unit data derived from a recent IRS-SOI PUF file.

  • Improve documentation of model logic and data.