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marginalfunctions.R
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#This file stores all the functions necessary to calculate average and marginal tax rates
#############Federal Tax Functions###############################
#federal taxable income
FedTaxableIncome<-function(income, children, married, hoh, stateincometax){
if(income>fedtax$pep_pease_threshold[1+married+(hoh*2)]){
personalexemption<-max(0,(1-( ((income-fedtax$pep_pease_threshold[1+married+(hoh*2)])/2500) *(.02)))*(fedtax$personal_exemption[1]*(1+children+married)))
} else {
personalexemption<-fedtax$personal_exemption[1]*(1+children+married)
}
#Calculating STANDARD/ITEMIZED DEDUCTION
if(stateincometax>fedtax$standard_deduction[1+married+(hoh*2)]){
if(income>fedtax$pep_pease_threshold[1+married+(hoh*2)]){
deduction<-stateincometax-((income-fedtax$pep_pease_threshold[1+married+(hoh*2)])*.03)
} else {
deduction<-stateincometax
}
} else {
deduction<-fedtax$standard_deduction[1+married+(hoh*2)]
}
taxableincome<-max(0,income-deduction-personalexemption)
return(taxableincome)
}
#federal income tax
FedIncomeTax<-function(taxableincome,married,hoh){
#Pre-Credit Federal Income Tax Bill
x<-1 #An index that counts through the tax brackets
federalincometax<-0
#To make this a little easier, I don't call on the variable names in the dataset. single:3,married:4,hoh:5
while(TRUE){
if( taxableincome < fedtax[x+1,3+married+(hoh*2)] & x < length(fedtax$incometaxrate)){
federalincometax <- federalincometax + ( ( taxableincome - fedtax[x,3+married+(hoh*2)] ) * fedtax$incometaxrate[x] )
break
} else {
federalincometax <- federalincometax + fedtax$incometaxrate[x] * ( fedtax[x+1,3+married+(hoh*2)] - fedtax[x,3+married+(hoh*2)] )
x<-x+1
}
if( x == length(fedtax$incometaxrate) ) {
federalincometax <- federalincometax + fedtax$incometaxrate[x] * ( taxableincome - fedtax[x,3+married+(hoh*2)] )
break
}
}
return(federalincometax)
}
#federal EITC
FedEITC<-function(income,children,married){
c<-min(children,3)
if(married == 0){
if(income < fedtax$eitc_threshold[1+c]) {
eitc<-income*(fedtax$eitc_max[1+c]/fedtax$eitc_threshold[1+c])
} else if (income >= fedtax$eitc_threshold[1+c] & income <= fedtax$eitc_phaseout_single[1+c]) {
eitc<-fedtax$eitc_max[1+c]
} else if (income > fedtax$eitc_phaseout_single[1+c]) {
eitc<-max(0,fedtax$eitc_max[1+c]+((fedtax$eitc_phaseout_single[1+c]-income)*(fedtax$eitc_max[1+c]/(fedtax$eitc_maxincome_single[1+c]-fedtax$eitc_phaseout_single[1+c]))))
}
} else if (married == 1) {
if(income < fedtax$eitc_threshold[1+c]) {
eitc<-income*(fedtax$eitc_max[1+c]/fedtax$eitc_threshold[1+c])
} else if (income >= fedtax$eitc_threshold[1+c] & income <= fedtax$eitc_phaseout_married[1+c]) {
eitc<-fedtax$eitc_max[1+c]
} else if (income > fedtax$eitc_phaseout_married[1+c]) {
eitc<-max(0,fedtax$eitc_max[1+c]+((fedtax$eitc_phaseout_married[1+c]-income)*(fedtax$eitc_max[1+c]/(fedtax$eitc_maxincome_married[1+c]-fedtax$eitc_phaseout_married[1+c]))))
}
}
return(eitc)
}
#federal Child Tax Credit
FedCTC<-function(income,children,married){
#Child Tax Credit
if(children>0) {
c<-children
if (married == 0) {
if(income <= fedtax$ctcphasein[1]){
ctc<-0
} else if(income <= fedtax$ctcphaseout_single[1]){
ctc<-min(fedtax$ctccredit[1]*c,((income-fedtax$ctcphasein[1])*fedtax$ctcphaseinrate[1]))
} else if(income > fedtax$ctcphaseout_single[1]){
ctc<-max(0,(fedtax$ctccredit[1]*c)-( (income-fedtax$ctcphaseout_single[1]) * fedtax$ctcphaseoutrate[1]) )
}
} else if (married == 1) {
if(income <= fedtax$ctcphasein[1]) {
ctc<-0
} else if(income <= fedtax$ctcphaseout_married[1]) {
ctc<-min(fedtax$ctccredit[1]*c,((income-fedtax$ctcphasein[1])*fedtax$ctcphaseinrate[1]))
} else if(income > fedtax$ctcphaseout_married[1]) {
ctc<-max(0,(fedtax$ctccredit[1]*c)- (income-fedtax$ctcphaseout_married[1]) *fedtax$ctcphaseoutrate[1])
}
}
} else {
ctc<-0
}
return(ctc)
}
#Federal Employee Payroll Taxes
FedEmployeePayroll<-function(income,married){
#Employee payroll taxes
x<-1 #An index that counts through the payroll tax brackets
employeepayrolltax<-0
while(TRUE){
if( income < fedtax$emppayrollbracket[x+1]*(1+married) & x < sum(!is.na( fedtax$emppayrollbracket ) ) ){
employeepayrolltax <- employeepayrolltax + ( ( income - fedtax$emppayrollbracket[x]*(1+married) ) * fedtax$emppayrollrate[x] )
break
} else {
employeepayrolltax <- employeepayrolltax + fedtax$emppayrollrate[x] * ( fedtax$emppayrollbracket[x+1]*(1+married) - fedtax$emppayrollbracket[x]*(1+married) )
x<-x+1
}
if( x == sum(!is.na(fedtax$emppayrollbracket))){
employeepayrolltax <- employeepayrolltax + fedtax$emppayrollrate[x] * ( income - fedtax$emppayrollbracket[x]*(1+married) )
break
}
}
return(employeepayrolltax)
}
#Federal Employer Payroll Taxes
FedEmployerPayroll<-function(income,married){
x<-1 #An index that counts through the payroll tax brackets
employerpayrolltax<-0
while(TRUE){
if( income < fedtax$emplrayrollbracket[x+1]*(1+married) & x < sum(!is.na( fedtax$emplrayrollbracket ) ) ){
employerpayrolltax <- employerpayrolltax + ( ( income - fedtax$emplrayrollbracket[x]*(1+married) ) * fedtax$emplrpayrollrate[x] )
break
} else {
employerpayrolltax <- employerpayrolltax + fedtax$emplrpayrollrate[x] * ( fedtax$emplrayrollbracket[x+1]*(1+married) - fedtax$emplrayrollbracket[x]*(1+married) )
x<-x+1
}
if( x == sum(!is.na(fedtax$emplrayrollbracket))){
employerpayrolltax <- employerpayrolltax + fedtax$emplrpayrollrate[x] * ( income - fedtax$emplrayrollbracket[x]*(1+married) )
break
}
}
return(employerpayrolltax)
}
#Medicare Surtax
MedSurtax<-function(income,married){
x<-1 #An index that counts through the tax brackets
medsurtax<-0
#To make this a little easier, I don't call on the variable names in the dataset. single:3,married:4,hoh:5
while(TRUE){
if(married == 0){
if( income < fedtax$medsurtaxsinglebracket[x+1] & x < sum(!is.na(fedtax$medsurtaxsinglebracket))){
medsurtax <- medsurtax + ( ( income - fedtax$medsurtaxsinglebracket[x] ) * fedtax$medsurtaxrate[x] )
break
} else {
medsurtax <- medsurtax + fedtax$medsurtaxrate[x] * ( fedtax$medsurtaxsinglebracket[x+1] - fedtax$medsurtaxsinglebracket[x] )
x<-x+1
}
if( x == sum(!is.na(fedtax$medsurtaxsinglebracket)) ) {
medsurtax <- medsurtax + fedtax$medsurtaxrate[x] * ( income - fedtax$medsurtaxsinglebracket[x] )
break
}
} else
if(married == 1){
if( income < fedtax$medsurtaxmarriedbracket[x+1] & x < sum(!is.na(fedtax$medsurtaxmarriedbracket))){
medsurtax <- medsurtax + ( ( income - fedtax$medsurtaxmarriedbracket[x] ) * fedtax$medsurtaxrate[x] )
break
} else {
medsurtax <- medsurtax + fedtax$medsurtaxrate[x] * ( fedtax$medsurtaxmarriedbracket[x+1] - fedtax$medsurtaxmarriedbracket[x] )
x<-x+1
}
if( x == sum(!is.na(fedtax$medsurtaxmarriedbracket)) ) {
medsurtax <- medsurtax + fedtax$medsurtaxrate[x] * ( income - fedtax$medsurtaxmarriedbracket[x] )
break
}
}
}
return(medsurtax)
}
#Federal UI Tax
FedUI<-function(income,married,stateui){
if(income<=fedtax$ui[1]*(1+married)){
fedui<-fedtax$ui[2]*income
} else {
fedui<-fedtax$ui[2]*fedtax$ui[1]*(1+married)
}
#90 percent credit (minimum federal ui tax is $42, max is $420)
fedui<-max(fedui*.1,fedui-stateui)
return(fedui)
}
#Alternative Minimum Tax
AMT<-function(income,married){
if(married == 1){
amti <- income - max(0,(fedtax$amtexemptionmarried[1] - max(0,(income - fedtax$amtphaseoutmarried[1])*.25)))
} else {
amti<- income - max(0,(fedtax$amtexemptionsingle[1] - max (0,(income - fedtax$amtphaseoutsingle[1])*.25)))
}
x<-1
amt<-0
while(TRUE){
if( amti < fedtax$amtbracket[x+1] & x < sum(!is.na(fedtax$amtbracket))){
amt <- amt + ( ( amti - fedtax$amtbracket[x] ) * fedtax$amtrate[x] )
break
} else {
amt <- amt + fedtax$amtrate[x] * ( fedtax$amtbracket[x+1] - fedtax$amtbracket[x] )
x<-x+1
}
if( x == sum(!is.na(fedtax$amtbracket)) ) {
amt <- amt + fedtax$amtrate[x] * ( amti - fedtax$amtbracket[x] )
break
}
}
return(amt)
}
################State Tax Functions##############################
#state parameters
StateParameters<-function(state){
stateparam<-statetax[statetax$id == state,]
return(stateparam)
}
#State Taxable Income
StateTaxableIncome<-function(income,children,married,hoh,federalincometax,stateparam){
#Standard Deduction
if(married == 1){
standarddeduction <- stateparam$deductionmarried[1]
} else if(married == 0){
standarddeduction <- stateparam$deductionsingle[1]
}
#Special state specific adjustments to the standard deduction
#Alabama
#Alabama's Standard Deduction is on a sliding scale between $2500 and $2000
#($7500 and $4000 married) between $20500 and $30,000.
if(stateparam$stateName[1] == "Alabama" & income >= 20500){
if(married == 0){
standarddeduction <- max(2000,2500-((income-20500)*((2500-2000)/9500)))
} else if (married == 1){
standarddeduction <- max(4000,7500-((income-20500)*((7500-4000)/9500)))
} else if (hoh == 1){
standarddeduction <- max(2000,4700-((income-20500)*((4700-2000)/9500)))
}
}
#Personal Exemption
#For taxpayer and spouse
if(married == 1){
personalexemption <- stateparam$personalexemptionmarried[1]
} else if (married == 0){
personalexemption <- stateparam$personalexemptionsingle[1]
} else if (hoh == 1){
personalexemption <- stateparam$personalexemptionhoh[1]
}
#Dependent Exemption
dependentexemption <- ( stateparam$personalexemptiondependent[1] * children )
#State specific adjustments to the personal exemption
#Alabama
if(stateparam$stateName[1] == "Alabama"){
if(income > 20000 & income <= 100000){
dependentexemption <- 500
} else if (income>100000){
dependentexemption <- 300
}
}
#Final Calculation of personal exemption
personalexemption <- personalexemption+dependentexemption
#Federal Income Tax Deduction (For Specific States)
#none yet
#Final Calculation
statetaxableincome<-max(0,income-standarddeduction-personalexemption-federalincometax)
return(statetaxableincome)
}
#State income tax
StateIncomeTax<-function(statetaxableincome,married,hoh,stateparam){
x<-1
stateincometax<-0
while(TRUE){
#Calculates Income Pre-Credit income tax for married couples
if(married == 1){
if( statetaxableincome < stateparam$marriedbracket[x+1] & x < length(stateparam$marriedbracket)) {
stateincometax <- stateincometax + ( ( statetaxableincome - stateparam$marriedbracket[x] ) * stateparam$marriedrate[x] )
break
} else if( x == length(stateparam$marriedbracket) ) {
stateincometax <- stateincometax + stateparam$marriedrate[x] * ( statetaxableincome - stateparam$marriedbracket[x] )
break
} else {
stateincometax <- stateincometax + stateparam$marriedrate[x] * ( stateparam$marriedbracket[x+1] - stateparam$marriedbracket[x] )
x<-x+1
}
#Calculates Income Pre-Credit income tax for married couples
} else if(married == 0){
if( statetaxableincome < stateparam$singlebracket[x+1] & x < length(stateparam$singlebracket)){
stateincometax <- stateincometax + ( ( statetaxableincome - stateparam$singlebracket[x] ) * stateparam$singlerate[x] )
break
} else if( x == length(stateparam$singlebracket) ) {
stateincometax <- stateincometax + stateparam$singlerate[x] * ( statetaxableincome - stateparam$singlebracket[x] )
break
} else {
stateincometax <- stateincometax + stateparam$singlerate[x] * ( stateparam$singlebracket[x+1] - stateparam$singlebracket[x] )
x<-x+1
}
#Calculates Income Pre-Credit income tax for Head of Households
} else if (hoh == 1){
if( statetaxableincome < stateparam$hohbracket[x+1] & x < length(stateparam$hohbracket)){
stateincometax <- stateincometax + ( ( statetaxableincome - stateparam$hohbracket[x] ) * stateparam$hohrate[x] )
break
} else if( x == length(stateparam$hohbracket) ) {
stateincometax <- stateincometax + stateparam$hohrate[x] * ( statetaxableincome - stateparam$hohbracket[x] )
break
} else {
stateincometax <- stateincometax + stateparam$hohrate[x] * ( stateparam$hohbracket[x+1] - stateparam$hohbracket[x] )
x<-x+1
}
}
}
return(stateincometax)
}
#State EITC
StateEITC<-function(eitc,stateparam){
#State EITC
stateeitc<-eitc*stateparam$eitcrate[1]
return(stateeitc)
}
#State Personal Credit
StatePersonalCredit<-function(income,statetaxableincome,married,hoh,children,stateparam){
#State personal credit
if(married == 1) {
personalcredit <- stateparam$personalcreditmarried[1] + ( stateparam$personalcreditdependent[1] * children )
} else if (married == 0){
personalcredit <- stateparam$personalcreditsingle[1] + ( stateparam$personalcreditdependent[1] * children )
}
return(personalcredit)
}
#State UI Tax (Needs to be completed)
StateUI<-function(income,married,stateparam){
if(income<=stateparam$uibase[1]*(1+married)){
stateui<-stateparam$uirate[1]*income
} else {
stateui<-stateparam$uirate[1]*stateparam$uibase[1]*(1+married)
}
return(stateui)
}