Rand Paul tax calculator

[Danke]

It would be nice for a change that a politician actually understood the taxing authority and to whom it applies. Can a man in India being paid by a U.S. Person/corporation be liable for this income tax, if not, why not?

[P3ter_Griffin]

Yeah thats possible but instead of going into a db it would probably be best to quick and dirty it by having the tabular data in a file for lookup.

I would do something like find out which syntax we are dealing with and then use Python to change that tabular text into whatever table var declaration is being used.

Also caveat... those are 2014 instructions and the numbers may be different for 2015 filing, which is another reason I'd advocate the Monday Morning QB method of just finding out what they paid and then saying well this is what would have happened under Rand's plan.

I was thinking about this 'Monday Morning QB method' today and and thought that for a 1.0 or first published build it might indeed be a better path. It will cut down on some work and time, it will still be able to calculate the relevant information, and individuals looking to provide more functionality could work on doing so after publication, without needing to do it quick and dirty. Quick and dirty sounds like hard to update, and I agree with a need to use time relevant figures within the calculator, so an update would probably be necessary.

With that in mind, lets pretend that first post doesn't exist and begin again...

For relevancy sake, let me bump the link from CPUd earlier in the thread: http://taxfoundation.org/blog/econom...ax-reform-plan

Structure of the Tax Reform Plan

Sen. Paul would make a number of changes to the tax code for individuals. He would replace the current seven tax bracket structure with a flat rate of 14.5 percent and apply that tax rate to all income – wages and salaries, capital gains, dividends, interest, and rents.

The plan would include a $15,000 standard deduction (per filer) and a $5,000 per person personal exemption. This means that a family of four would pay no income tax on their first $50,000 of income ($55,000 for a family of five, etc.).

Retirement accounts remain as they currently are and in our modeling we assumed that the exclusion for employer-provided health care remains.

The plan retains home mortgage and charitable deductions, the earned income tax credits, and the child tax credit and eliminates all other tax credits and deductions.

The plan would eliminate the payroll tax, the estate tax, and all customs duties and tariffs.

On the business side, the plan would eliminate the corporate tax, create a territorial type system, and introduce a 14.5 percent business transfer tax. This tax would be levied on a business’s factors of production and tax all capital income (profits, rents, royalties) and all labor payments (wages and salaries). All capital expenses (machines, equipment, buildings, etc.) are fully expensed in the first year, which would do away with current depreciation schedules. This tax would also apply to wages paid by governments and nonprofits.

There are obviously a lot more inputs we are going to need then I was thinking if we want to represent Rand's plan 'reasonably well', to put it mildly. I need to sit down and digest what parts of Rand's tax plan are specific enough that they can be included in the calculation. I hope I do not sound demoralized, just a bit of a needed reality check. I'll be back in a few days with another swing at this.

[P3ter_Griffin]

Here is a csv I made of the 2014 table. The first column with the field names should probably be renamed to something shorter and cleaner.

Thank you CPUd. For reference, when you came up with the users taxable income, how would you have the program search this file to find the right A and B row which matches to it? And if you don't mind, how did you convert it into such a file?

[CPUd]

Thank you CPUd. For reference, when you came up with the users taxable income, how would you have the program search this file to find the right A and B row which matches to it? And if you don't mind, how did you convert it into such a file?

Exactly how it is done depends on the language/implementation, but generally you would read the csv into a structure (using a csv library) that could be described as an array of n records like this:

tbl = [
  {a0,b0,c0,d0,e0,f0},
  {a1,b1,c1,d1,e1,f1},
  ...,
  {an,bn,cn,dn,en,fn}
]

Since it is not looking for an exact match on 1 field, you probably will have to tell it how to find the correct row. A simple compare function like this could be defined:

compare(A,B,Z)
{
   return ((Z >= A) && (Z < B))
}

Most of these scripting languages have search/find functions built into their objects, and the most you would have to do is define a compare function and pass it to the search function along with the search value, something like this:

tbl.find(Z, compare)


Under the hood of find():

To find the correct row, the first instinct might be to tell the program to start at the first row and check each one until compare is true. This works, but there are faster approaches. Assume a case where the correct row is the very last one, then it would take n compare calls to find it. The built in find() will probably use a binary search, where for an array size n, the first check will be at tbl[n/2]. If compare is false, the next check will be at tbl[n/4] or tbl[(n - n/2) / 2], depending on whether Z < A or Z > B. This approach would at worst take log₂(n) compare calls.

From there, the program would get 1 of the other 4 values, depending on filing status. This could also be added to the compare function so a single value would be returned (as opposed to the whole row) in one fell swoop. Technically, this would take log₂(n) + 4 compare calls, but most people still call it log₂(n).


The source comes from the HTML version of the 1040:
http://www.irs.gov/instructions/i1040gi/ar02.html

I just used text replacement to convert the html table to a csv.

[P3ter_Griffin]

Exactly how it is done depends on the language/implementation, but generally you would read the csv into a structure (using a csv library) that could be described as an array of n records like this:

tbl = [
  {a0,b0,c0,d0,e0,f0},
  {a1,b1,c1,d1,e1,f1},
  ...,
  {an,bn,cn,dn,en,fn}
]

Since it is not looking for an exact match on 1 field, you probably will have to tell it how to find the correct row. A simple compare function like this could be defined:

compare(A,B,Z)
{
   return ((Z >= A) && (Z < B))
}

Most of these scripting languages have search/find functions built into their objects, and the most you would have to do is define a compare function and pass it to the search function along with the search value, something like this:

tbl.find(Z, compare)


Under the hood of find():

To find the correct row, the first instinct might be to tell the program to start at the first row and check each one until compare is true. This works, but there are faster approaches. Assume a case where the correct row is the very last one, then it would take n compare calls to find it. The built in find() will probably use a binary search, where for an array size n, the first check will be at tbl[n/2]. If compare is false, the next check will be at tbl[n/4] or tbl[(n - n/2) / 2], depending on whether Z < A or Z > B. This approach would at worst take log₂(n) compare calls.

From there, the program would get 1 of the other 4 values, depending on filing status. This could also be added to the compare function so a single value would be returned (as opposed to the whole row) in one fell swoop. Technically, this would take log₂(n) + 4 compare calls, but most people still call it log₂(n).


The source comes from the HTML version of the 1040:
http://www.irs.gov/instructions/i1040gi/ar02.html

I just used text replacement to convert the html table to a csv.

Thanks CPUd.

You must spread some Reputation around before giving it to CPUd again.

[P3ter_Griffin]

**Individual Income section**

14.5% tax on all taxable income

$15k standard deduction per filer
$5k per person personal exemption

**Unknown: Can a family with a working child include the child's income on their tax return and treat them as a third filer? So then a family of four with one working child's standard deduction would be $65k?**

retirement accounts remain as they are

**assumption by article publishers** exclusion for employer provided heath care remains

I'm thinking this is an exclusion so employees don't have to include heath care benefits as income?

Retains homes mortgage deduction

retains charitable deductions

retains earned income tax credits

retains child tax credit

eliminates payroll tax

eliminates estate tax

eliminates customs duties and tariffs

**unknown** Most people wouldn't have the record keeping to figure this savings even if we provided a calculator that could. A note somewhere on the calculator detailing how much eliminating duties and tariffs would save US consumers would be the best route IMO. We could attempt to estimate though.


A few unknowns and a bit of work but not to bad.


**Business tax section**

1. 14.5% business transfer tax
Levied on business factors of production
Tax all capital income (profits, rents, royalties)
Capital expenses expended in first year
Tax all labor payments
Labor payments by non-profits is taxed, also government labor payments
eliminates payroll tax

I think the business tax section will be fairly easy we just need to make sure we word it correctly to get the correct inputs. I think a different way to word the above would be that labor and material input expenses are now considered as profits.

I think: (Revenues – capital expenditures + labor costs + input costs) * 14.5%= Corporate tax ?

Tonight/tomorrow I'll work on digging through the tax code to see what inputs we'll need for the individual income tax section. Thoughts on whether I've expressed the corporate tax plan correctly? I think clarification from the campaign will be necessary to figure out how the filing system works, i.e. if multiple filers on the same tax bill is marriage dependent or by some other means. Time is short, more to come in the next few days...

[P3ter_Griffin]

A couple crazy weeks and I hope I'll have more time for this. Sorry for my lack of progress!

[r3volution 3.0]

Wow, just noticed this thread. Epic work gentlemen.

I know absolutely nothing about programming, but let me know if there's anything else I can help with.

godspeed

[groverblue]

I'm a developer. If you need any help let me know. I can do a website and an android app if needed.

[r3volution 3.0]

Rather poetic that the greatest difficulty in creating this calculator is the complexity of the existing tax code, eh?



Anyway, FWIW, here's a simple formula to calculate liability under Rand's plan, for someone taking the standard deduction.

User Input:
monthly income (I)
single or married
# of dependents (D)

Output:
monthly tax liability (T)

If single: T = [.145 x (12I - 15000 - D5000)]/12
If married: T = [.145 x (12I - 30000 – D5000)]/12

That's the easy part.

For itemized returns under Rand's plan, you need to consider two deductions (mortgage and charitable) and two credits (child and earned income).

P.S. As for the present tax code, you might want to check out wordpress plugins. I know they have income tax calculators, and I guess you can view the code?

@P3ter

I think it might be best to compare Rand's income tax to the existing income + payroll taxes, leaving out everything else. It's impossible to calculate the increase in living costs caused by Rand's business tax; and equally impossible to calculate the decrease in living costs caused by Rand's elimination of excise taxes and duty. Gift and estate are actually fairly simple, but they only affect a tiny fraction of the population (i.e. a tiny fraction of people who'd be using this calculator). IMO, the idea should be for the average working person to see how much more they'll have in their paycheck each month. This is the simplest way and puts Rand's plan in the best light.

[r3volution 3.0]

Here's a formula for calculating payroll tax liability under the present system:

User Input
monthly wages (W)

Output
monthly tax liability (T)

If (12W) < 118500: T = W x .0765
If (12W) > 118500: T = (9875 x .0765) + [(W – 9875) x .0145]

[kcchiefs6465]

Thanks CPUd.

You must spread some Reputation around before giving it to CPUd again.

Gladly covered.

[r3volution 3.0]

bump

[satchelmcqueen]

does the campaign know about this great idea? if not i will email them tonight.

[P3ter_Griffin]

does the campaign know about this great idea? if not i will email them tonight.

As far as I know they do not.

[P3ter_Griffin]

$#@! is still crazy over this way. But I have not forgotten.

[r3volution 3.0]

bump

[kfarnan]

i would like a tax form with a check box to request none of your taxes fund overseas war efforts

This would be better. How about end the fed along with the income tax.

[Suzu]

**Individual Income section**

14.5% tax on all taxable income

$15k standard deduction per filer
$5k per person personal exemption

Do you mean that anyone who earns $20k or less pays no federal income tax?

I'd like to see a simple calculator where you input your annual income + number of dependents and get a tax amount as the result.

[Tinnuhana]

Single Filer, 1 Exemption, No Dependents,$60,000 wages
Current System = $8319 (income tax) + $4590 (payroll tax) = $12909
Rand's System = $5800
Savings = $7109 (55%cut)

Wow! That's five months worth of mortgage payments each year for me.

[P3ter_Griffin]

bump

Thanks for the bump. This hiatus started as a fun journey for the GF and I. We were going to sell our house, buy a new one, pitch and hopefully start a new property management company with family, and I was set to start a EE program as well. Unfortunately things have turned a bit more somber as we are providing end of life cares for my GF's grandmother. There have been plenty of bright moments however too. God continues to answer our prayers to give her more good painfree time. 3 weeks ago we had to call her children as we and the nurses thought she may be on her last day. But she bounced back. 5 days ago we were told she had 2 days tops, had a fever of 105 and severely abnormal resperations. Once again she has bounced back. God is truly great. I will only have passing moments to spend on RPF until she passes and I have helped my GF through the grieving process. Which I hope for grandmas sake is far off. Anyone feel free to take this concept as your own and run with it. Otherwise when I get back I'll get back to it.

<3

[P3ter_Griffin]

Do you mean that anyone who earns $20k or less pays no federal income tax?

I'd like to see a simple calculator where you input your annual income + number of dependents and get a tax amount as the result.

Indeed, a family of four gets a 50k deduction. 15k per filer (x2) and 5k per individual (x4).

[Eric21ND]

So a single filer making 50k would pay $4350?

[r3volution 3.0]

So a single filer making 50k would pay $4350?

Yes

[P3ter_Griffin]

Seems like it may be time to dig a little deeper. I'll work on putting together the input and direction we were heading and then creating a new first post, and if there is agreement that it is indeed the direction we should be heading, we can create a new RPTax Calculator thread so people can get right to the meat and potatoes. Life is still happening around us but I'll see what I can do.

[r3volution 3.0]

bump