Merge pull request #222 from PolicyEngine/calibration-fix

Fix bad SS targets

Author: nikhilwoodruff

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: patch
+  changes:
+    fixed:
+    - Hallucinated calibration targets.

policyengine_uk_data/utils/loss.py

@@ -194,66 +194,6 @@ def pe_count(*variables):
         employer_ni_relief
     )
 
-    # HMRC Table 6.2 - Salary sacrifice income tax relief by tax rate
-    # This helps calibrate the distribution of SS users by income level
-    # 2023-24 values (£m): Basic £1,600, Higher £4,400, Additional £1,200
-    # Total IT relief from SS: £7,200m
-    # Use true counterfactual: IT relief = counterfactual IT - baseline IT
-    income_tax_baseline = sim.calculate("income_tax")
-    income_tax_cf = counterfactual_sim.calculate("income_tax", time_period)
-    it_relief = income_tax_cf - income_tax_baseline
-
-    # Get tax band from counterfactual adjusted net income (where SS is wages)
-    adjusted_net_income_cf = counterfactual_sim.calculate(
-        "adjusted_net_income", time_period
-    )
-    basic_rate_threshold = (
-        sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
-            0
-        ].threshold(time_period)
-    )
-    higher_rate_threshold = (
-        sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
-            1
-        ].threshold(time_period)
-    )
-    additional_rate_threshold = (
-        sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
-            2
-        ].threshold(time_period)
-    )
-
-    # Determine tax band for each person based on counterfactual income
-    is_basic_rate = (adjusted_net_income_cf > basic_rate_threshold) & (
-        adjusted_net_income_cf <= higher_rate_threshold
-    )
-    is_higher_rate = (adjusted_net_income_cf > higher_rate_threshold) & (
-        adjusted_net_income_cf <= additional_rate_threshold
-    )
-    is_additional_rate = adjusted_net_income_cf > additional_rate_threshold
-
-    # Allocate the true IT relief to tax bands
-    ss_it_relief_basic = it_relief * is_basic_rate
-    ss_it_relief_higher = it_relief * is_higher_rate
-    ss_it_relief_additional = it_relief * is_additional_rate
-
-    df["hmrc/salary_sacrifice_it_relief_basic"] = household_from_person(
-        ss_it_relief_basic
-    )
-    df["hmrc/salary_sacrifice_it_relief_higher"] = household_from_person(
-        ss_it_relief_higher
-    )
-    df["hmrc/salary_sacrifice_it_relief_additional"] = household_from_person(
-        ss_it_relief_additional
-    )
-
-    # Total gross salary sacrifice contributions
-    # This is derived from the IT relief: £7.2bn IT relief at ~30% avg rate
-    # implies ~£24bn gross contributions (but we target the relief directly)
-    df["hmrc/salary_sacrifice_contributions"] = household_from_person(
-        ss_contributions
-    )
-
     # Population statistics from the ONS.
 
     region = sim.calculate("region", map_to="person")