New CE 

income tax estimates

Aaron E. Cobet

Division of Consumer Expenditure Survey

CE Microdata User’s Workshop

July 15-17, 2015
Overview

Introduction of CE income taxesComparison to other tax estimatesGetting startedData uses
What changed?
What changed? 

CE introduced estimates for federal and s

income tax liabilities in 2013. 

Prior to 2013, CE collected this informatio
Why did CE develop 

income tax estimate
Reliability issues

Privacy concernsProblems remembering taxesProblems computing taxes
Reliability issues

Are the estimates bet

than the collected da
Reliability issues

Yes

Model obtains input from readily available Model tested since the seventies
How does CE estima

the tax data?
Method

Assemble inputsRun TAXSIMCreate tax files (NTAXI)
Method

Does the new metho

make a difference?
Method

$0

$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000

2004 2005 2006 2007 2008 2009 2010 2011 

Reported Estimated
How do BLS income ta

compare to other 

tax data?
Comparison

Focus on federal agencies

– Internal Revenue Service (IRS) – U.S. Census Bureau (Census)– Congressional Budget Office (CBO)
Comparison

Focus on two aspect: 

– Concepts– Format
Comparison

 Tax comparison

 Name of series  Concepts included  Federal Basic unit: Household or tax return Method: Model or sample
Comparison

Concept CE (BLS) IRS CPS (Census) Name of series

Average income tax 

Average income tax revenue 

Household income tax 

Avetax 

Concepts included

Individual income taxes minus tax credits 

Individual income revenue minus tax credits plus trust accumulation distribution 

Individual income taxes minus tax credits 

Indiincoplus taxeincoand 

Basic unit 

Household Tax return Household Hou

Federal Federal Federal Federal FedMethod Model Sample of actual 

tax returns. 

Model Mod

Table 1: Comparison of taxesSource: U.S. Bureau of Labor Statistics 
Comparison

Concept CE (BLS) IRS CPS (Census) Name of series

Average income tax 

Average income tax return 

Householdincome tax 

Avetax 

Concepts included

Individual income taxes minus tax credits 

Individual income revenue minus tax credits plus trust accumulation distribution 

Individual income taxes minus tax credits 

Indiincoplus taxeincoand 

Basic unit 

Household Tax return Household Hou

Federal Federal Federal Federal FedMethod Model Sample of actual 

tax returns

Model Mod

Table 1: Concept comparisonSource: U.S. Bureau of Labor Statistics 
Comparison

 Tax format

 Basic unit: Household or tax return Ranked by Presentation by quintile or segment Currency Latest year available 
Comparison

Table 2: Data formatSource: U.S. Bureau of Labor Statistics 

Format CE (BLS) IRS CPS (Census) Basic unit

People living financially independent 

People filing one tax return

People living in one housing unit 

Peoone 

Rank by Population 

weighted income

Adjusted gross income

No ranking Size

inco

Presentation Income quintile Income segment No rank (mircodata) IncoCurrency U.S. dollars U.S. dollars U.S. dollars U.SYear 2013 2012 2013 201
Comparison

Table 2: Format comparisonSource: U.S. Bureau of Labor Statistics 

Format CE (BLS) IRS CPS (Census) People counted

People living financially independent 

People filing one 

tax return

People living in one housing unit 

Peo

one 

Rank by Population 

weighted income

Adjusted gross income

No ranking Size

inco

Presentation Income quintile Income segment No rank (mircodata) Inco

Currency U.S. dollars U.S. dollars U.S. dollars U.SYear 2013 2012 2013 201
Do the conceptual 

differences make da

differences? 
Comparison

$16,600

$13,000

$7,

$0

$2,000$4,000$6,000$8,000

$10,000$12,000$14,000$16,000$18,000

CBO IRS B

National average of income related taxes
Comparison

-$10,000

$0

$10,000$20,000$30,000$40,000$50,000$60,000

1234

Income related taxes by income quintil

BLS CBO
How to get started? 
Getting started!

Where are the data? 

– With Interview files– In “NTAXI” file
Getting started!

 What are the key variables? 

 NEWID and TAX_UNIT to connect to other inform FTAXO_PY and FTAXO_CY for federal taxes after c STAXO_PY and STAXO_CY for state taxes after cre TAXYR_PY and TAXYR_CY for the tax year 
What can you do 

with the data? 
Uses

9,658

26,275

45,826

74,546

-434 -489

2,233 7,203

-$20,000

$0

$20,000$40,000$60,000$80,000

$100,000$120,000$140,000$160,000$180,000

Lowest Second Third Fourth 

 Income before taxes Personal taxes

Annual income and personal taxes per household by income quintile, U.S. dollars, 2013 

Source: U.S. Bureau of Labor Statistics.
Uses

 Federal income taxes State and local income taxes and other taxes

Average shares of personal taxes by households by tax type, 2013Source: U.S. Bureau of Labor Statistics.
Uses

-$2,500

$2,500$7,500

$12,500$17,500$22,500$27,500

Lowest Second Third Fourth 

 Federal income taxes State and local income taxes and other taxes

Personal taxes by tax type and income quintile, U.S. dollars, 2013Source: U.S. Bureau of Labor Statistics.
Uses

-5

05

101520

Lowest Second Third Fourth 

Shares of personal taxes by income quintile, percent, 2013

National average 11.7

Source: U.S. Bureau of Labor Statistics.
Uses

048

1216

Couple

without children

Couple

with children

Single person

 without children

O

w

Shares of personal taxes for selected family types, percent, 2013Source: U.S. Bureau of Labor Statistics.
Uses

Spending and saving, average, Percent, 2013

 Spen Savin

Average spending and saving per household, percent, 2013Source: U.S. Bureau of Labor Statistics.
Uses

-140-120-100

-80-60-40-20

0

2040

Lowest Second Third Fourth 

Shares of savings by income quintile, percent, 2013

National average

Source: U.S. Bureau of Labor Statistics.
Your input!

Questions?

Ideas!