Merge pull request #2818 from martinholmer/fix-bizloss-ald-policy

Fix ALD_BusinessLosses_c parameter values after 2025

docs/contributing/RELEASING.md

@@ -13,6 +13,8 @@ Create new `taxcalc` packages
 
 --> merge master branch into X-Y-Z branch
 
+--> run `python extend_tcja.py`  [update taxcalc/reforms/ext.json if needed]
+
 --> run `make tctest-jit`  [to make sure JIT decorators are not hiding bugs]
 
 --> run `make pytest-all`  [or `pytest -m pre_release -n4` in taxcalc subdir]

extend_tcja.py

@@ -3,16 +3,15 @@
 extend_tcja.json, that can serve as an alternative baseline to
 current-law policy (which ends TCJA temporary provisions after 2025).
 
-USAGE: (taxcalc-dev) ~% python extend_tcja.py
+USAGE: (taxcalc-dev) Tax-Calculator% python extend_tcja.py > ext.json
+  THEN CHECK:                      % diff ext.json taxcalc/reforms/ext.json
+  IF DIFFS:                        % mv ext.json taxcalc/reforms/ext.json
 
 WHEN TO USE: use this script to update reforms/ext.json in these situations:
 (a) whenever inflation rates in the growfactors.csv files are changed
 OR
 (b) whenever inflation-indexed parameters are updated (usually as part
     of changes that increase the value of Policy.LAST_KNOWN_YEAR).
-
-IMPORTANT NOTE: be sure to remove the trailing comma after the last item
-                in the reform JSON object generated by this script.
 """
 
 import sys
@@ -89,56 +88,75 @@ def main():
     """
     High-level script logic.
     """
+    # identify last parameter name in TCJA_PARAMETERS
+    last_pname = list(TCJA_PARAMETERS.keys())[-1]
     # calculate 2025-to-2026 parameters indexing factor
     pol = taxcalc.Policy()
     pirates = pol.inflation_rates()
-    ifactor = 1.0 + pirates[2025-taxcalc.Policy.JSON_START_YEAR]
+    ifactor25 = 1.0 + pirates[2025-taxcalc.Policy.JSON_START_YEAR]
+    ifactor28 = 1.0 + pirates[2028-taxcalc.Policy.JSON_START_YEAR]
     # specify extend-TCJA-beyond-2025 reform
     # ... get 2025 parameter values
     pol.set_year(2025)
     pdata = dict(pol.items())
     # ... write reform header comments
     print( '// REFORM TO EXTEND TEMPORARY TCJA PROVISIONS BEYOND 2025')
     print(f'// USING TAX-CALCULATOR {taxcalc.__version__}')
-    print(f'// WITH 2025-to-2026 INDEXING FACTOR = {ifactor:.6f}')
+    print(f'// WITH 2025-to-2026 INDEXING FACTOR = {ifactor25:.6f}')
+    print(f'//  AND 2028-to-2029 INDEXING FACTOR = {ifactor28:.6f}')
     if TCJA_CATEGORY:
         print(f'// ONLY TCJA PROVISIONS IN CATEGORY {TCJA_CATEGORY}')
     print('{')
-    # ... set 2026 nonreverted values for the parameters set to revert
+    # ... set 2026/29 nonreverted values for the parameters set to revert
+    left_brace = '{'
+    right_brace = '}'
+    year = 2026
     for pname, pinfo in TCJA_PARAMETERS.items():
         if TCJA_CATEGORY and pinfo['category'] != TCJA_CATEGORY:
             continue  # skip this parameter
+        if pname == 'ALD_BusinessLosses_c':
+            ifactor = ifactor28
+            year = 2029
+            pol.set_year(2028)
+            pdata = dict(pol.items())
+        else:
+            if year != 2026:
+                pol.set_year(2025)
+                pdata = dict(pol.items())
+            ifactor = ifactor25
+            year = 2026
+        trailing_comma = '' if pname == last_pname else ','
         if pinfo['indexed']:
             pval = pdata[pname][0] * ifactor
             if isinstance(pval, numpy.ndarray):
                 # handle vector parameter
                 pval = numpy.minimum(9e99, pval.round(2))
                 sys.stdout.write(f'    "{pname}": ')
-                sys.stdout.write('{"2026": ')
+                sys.stdout.write(f'{left_brace}"{year}": ')
                 sys.stdout.write(f'{pval.tolist()}')
-                sys.stdout.write('},\n')
+                sys.stdout.write(f'{right_brace}{trailing_comma}\n')
             else:
                 # handle scalar parameter
                 pval = min(9e99, pval)
                 sys.stdout.write(f'    "{pname}": ')
-                sys.stdout.write('{"2026": ')
+                sys.stdout.write(f'{left_brace}"{year}": ')
                 sys.stdout.write(f'{pval*ifactor:.2f}')
-                sys.stdout.write('},\n')
+                sys.stdout.write(f'{right_brace}{trailing_comma}\n')
         else:  # if parameter is not indexed
             pval = pdata[pname][0]
             if isinstance(pval, numpy.ndarray):
                 # handle vector parameter
                 pval = numpy.minimum(9e99, pval.round(2))
                 sys.stdout.write(f'    "{pname}": ')
-                sys.stdout.write('{"2026": ')
+                sys.stdout.write(f'{left_brace}"{year}": ')
                 sys.stdout.write(f'{pval.tolist()}')
-                sys.stdout.write('},\n')
+                sys.stdout.write(f'{right_brace}{trailing_comma}\n')
             else:
                 # handle scalar parameter
                 sys.stdout.write(f'    "{pname}": ')
-                sys.stdout.write('{"2026": ')
+                sys.stdout.write(f'{left_brace}"{year}": ')
                 sys.stdout.write(f'{pval:.2f}')
-                sys.stdout.write('},\n')
+                sys.stdout.write(f'{right_brace}{trailing_comma}\n')
     print('}')
     return 0
 # end main function code

taxcalc/policy_current_law.json

@@ -1586,27 +1586,27 @@
                 "value": 610000.0
             },
             {
-                "year": 2026,
+                "year": 2029,
                 "MARS": "single",
                 "value": 9e+99
             },
             {
-                "year": 2026,
+                "year": 2029,
                 "MARS": "mjoint",
                 "value": 9e+99
             },
             {
-                "year": 2026,
+                "year": 2029,
                 "MARS": "mseparate",
                 "value": 9e+99
             },
             {
-                "year": 2026,
+                "year": 2029,
                 "MARS": "headhh",
                 "value": 9e+99
             },
             {
-                "year": 2026,
+                "year": 2029,
                 "MARS": "widow",
                 "value": 9e+99
             }

taxcalc/reforms/ext.json

@@ -1,6 +1,7 @@
 // REFORM TO EXTEND TEMPORARY TCJA PROVISIONS BEYOND 2025
 // USING TAX-CALCULATOR 4.2.2b
 // WITH 2025-to-2026 INDEXING FACTOR = 1.022000
+//  AND 2028-to-2029 INDEXING FACTOR = 1.019400
 {
     "II_rt1": {"2026": 0.10},
     "II_brk1": {"2026": [12157.51, 24315.02, 12157.51, 17345.41, 24315.02]},
@@ -54,5 +55,5 @@
     "PT_qbid_w2_wages_rt": {"2026": 0.50},
     "PT_qbid_alt_w2_wages_rt": {"2026": 0.25},
     "PT_qbid_alt_property_rt": {"2026": 0.03},
-    "ALD_BusinessLosses_c": {"2026": [319658.6, 639317.21, 319658.6, 319658.6, 639317.21]}
+    "ALD_BusinessLosses_c": {"2029": [339091.08, 678182.18, 339091.08, 339091.08, 678182.18]}
 }

taxcalc/tests/pufcsv_agg_expect.csv

@@ -1,25 +1,25 @@
 ,2017,2018,2019,2020,2021,2022,2023,2024,2025,2026
 Returns (#m),190.9,194.3,197.3,200.1,202.9,205.6,208.4,211.2,214.0,216.8
-AGI ($b),11078.7,11816.6,12247.2,12722.3,14930.0,14973.9,15955.0,16597.4,17310.1,17868.8
+AGI ($b),11078.7,11816.6,12247.2,12722.3,14930.0,14973.9,15955.0,16597.4,17310.1,18001.3
 Itemizers (#m),45.7,19.4,20.0,21.0,22.6,22.8,21.7,21.2,21.3,52.0
-Itemized Deduction ($b),1274.3,602.7,633.9,692.3,761.9,782.7,788.7,808.1,835.2,2048.0
+Itemized Deduction ($b),1274.3,602.7,633.9,692.3,761.9,782.7,788.7,808.1,835.2,2047.5
 Standard Deduction Filers (#m),145.2,174.8,177.2,178.5,179.6,182.8,186.7,190.0,192.6,164.8
 Standard Deduction ($b),1239.3,2865.3,2954.5,3025.8,3081.1,3234.0,3537.5,3798.4,3952.6,1853.9
-Personal Exemption ($b),1365.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,1959.1
-Taxable Income ($b),8112.2,9179.2,9520.5,9907.3,12003.2,11927.7,12697.8,13130.7,13703.8,13394.9
-Regular Tax ($b),1656.8,1712.3,1778.2,1838.3,2281.5,2282.7,2423.4,2489.9,2601.1,2798.5
-AMT Income ($b),10512.4,11343.5,11749.7,12180.1,14330.8,14356.1,15323.1,15943.0,16630.5,16950.0
-AMT Liability ($b),51.3,22.1,23.0,25.1,27.8,27.4,28.8,30.3,31.8,85.1
+Personal Exemption ($b),1365.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,1959.0
+Taxable Income ($b),8112.2,9179.2,9520.5,9907.3,12003.2,11927.7,12697.8,13130.7,13703.8,13460.3
+Regular Tax ($b),1656.8,1712.3,1778.2,1838.3,2281.5,2282.7,2423.4,2489.9,2601.1,2816.2
+AMT Income ($b),10512.4,11343.5,11749.7,12180.1,14330.8,14356.1,15323.1,15943.0,16630.5,17082.5
+AMT Liability ($b),51.3,22.1,23.0,25.1,27.8,27.4,28.8,30.3,31.8,87.9
 AMT Filers (#m),5.7,0.2,0.2,0.3,0.4,0.3,0.3,0.3,0.3,7.4
-Tax before Credits ($b),1708.1,1734.4,1801.1,1863.4,2309.4,2310.1,2452.2,2520.2,2632.9,2883.5
-Refundable Credits ($b),102.9,117.5,118.5,642.0,802.6,119.2,126.9,132.8,135.0,121.8
+Tax before Credits ($b),1708.1,1734.4,1801.1,1863.4,2309.4,2310.1,2452.2,2520.2,2632.9,2904.0
+Refundable Credits ($b),102.9,117.5,118.5,642.0,802.6,119.2,126.9,132.8,135.0,121.7
 Nonrefundable Credits ($b),67.0,127.3,129.2,128.5,47.6,141.0,143.3,144.0,145.7,77.7
 Reform Surtaxes ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
-Other Taxes ($b),40.0,44.8,43.6,52.9,84.9,61.5,66.5,65.2,66.0,64.3
-Ind Income Tax ($b),1578.2,1534.3,1597.0,1145.8,1544.0,2111.5,2248.5,2308.6,2418.2,2748.4
+Other Taxes ($b),40.0,44.8,43.6,52.9,84.9,61.5,66.5,65.2,66.0,66.3
+Ind Income Tax ($b),1578.2,1534.3,1597.0,1145.8,1544.0,2111.5,2248.5,2308.6,2418.2,2770.9
 Payroll Taxes ($b),1083.8,1133.3,1185.4,1209.0,1306.0,1403.4,1492.6,1568.0,1642.1,1715.4
-Combined Liability ($b),2662.0,2667.7,2782.4,2354.8,2850.0,3514.9,3741.1,3876.6,4060.3,4463.7
-With Income Tax <= 0 (#m),92.8,98.6,99.7,131.7,125.0,100.3,101.8,103.4,104.3,101.0
+Combined Liability ($b),2662.0,2667.7,2782.4,2354.8,2850.0,3514.9,3741.1,3876.6,4060.3,4486.3
+With Income Tax <= 0 (#m),92.8,98.6,99.7,131.7,125.0,100.3,101.8,103.4,104.3,100.9
 With Combined Tax <= 0 (#m),63.4,65.6,66.8,102.1,94.5,68.9,70.2,71.6,72.6,72.3
 UBI Benefits ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
 "Total Benefits, Consumption Value ($b)",1052.3,1104.9,1175.3,1243.9,1476.4,1411.5,1569.5,1707.8,1818.1,1924.4