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Apply the miscellaneous deduction imputation to the total_misc_deductions instead of the misc_deduction variable #178

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Merged
PavelMakarchuk merged 3 commits into from
Feb 20, 2025
Merged

Apply the miscellaneous deduction imputation to the total_misc_deductions instead of the misc_deduction variable #178

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aacd23c
Apply the miscellaneous deduction imputation to the total_misc_deduct…
PavelMakarchuk Feb 19, 2025
f698c29
use unreimbursed_business_employee_expenses
PavelMakarchuk Feb 19, 2025
42b680d
test fix
PavelMakarchuk Feb 20, 2025
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4 changes: 4 additions & 0 deletions changelog_entry.yaml
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Original file line number Diff line number Diff line change
@@ -0,0 +1,4 @@
- bump: patch
changes:
fixed:
- Apply the miscellaneous deduction imputation to the unreimbursed_business_employee_expenses instead of the misc_deduction variable.
2 changes: 1 addition & 1 deletion policyengine_us_data/datasets/cps/extended_cps.py
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Expand Up @@ -21,7 +21,7 @@
"interest_deduction",
"tax_exempt_pension_income",
"long_term_capital_gains",
"misc_deduction",
"unreimbursed_business_employee_expenses",
"pre_tax_contributions",
"taxable_ira_distributions",
"self_employment_income",
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6 changes: 4 additions & 2 deletions policyengine_us_data/datasets/puf/puf.py
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Expand Up @@ -158,7 +158,9 @@ def preprocess_puf(puf: pd.DataFrame) -> pd.DataFrame:
fraction,
) in MEDICAL_EXPENSE_CATEGORY_BREAKDOWNS.items():
puf[medical_category] = puf.E17500 * fraction
puf["misc_deduction"] = puf.E20400
# Use unreimbursed business employee expenses as a proxy for all miscellaneous expenses
# that can be deducted under the miscellaneous deduction.
puf["unreimbursed_business_employee_expenses"] = puf.E20400
puf["non_qualified_dividend_income"] = puf.E00600 - puf.E00650
puf["partnership_s_corp_income"] = puf.E26270
puf["qualified_dividend_income"] = puf.E00650
Expand Down Expand Up @@ -242,7 +244,7 @@ def preprocess_puf(puf: pd.DataFrame) -> pd.DataFrame:
"interest_deduction",
"long_term_capital_gains",
"long_term_capital_gains_on_collectibles",
"misc_deduction",
"unreimbursed_business_employee_expenses",
"non_qualified_dividend_income",
"non_sch_d_capital_gains",
"partnership_s_corp_income",
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2 changes: 1 addition & 1 deletion policyengine_us_data/tests/test_datasets/test_enhanced_cps.py
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Expand Up @@ -73,7 +73,7 @@ def apply(self):
# Calculate tax expenditure
tax_expenditure = (income_tax_r - income_tax_b).sum()
pct_error = abs((tax_expenditure - target) / target)
TOLERANCE = 0.15
TOLERANCE = 0.2

print(
f"{deduction} tax expenditure {tax_expenditure/1e9:.1f}bn differs from target {target/1e9:.1f}bn by {pct_error:.2%}"
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