Add marginal_tax_rate_wrt_employer_cost (#45)#1641
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Mirror the existing `marginal_tax_rate` variable but divide the change in household net income by the change in the employer's cost of employment rather than the change in gross pay. The denominator is `employer_cost` (gross pay plus employer NI, employer pension contributions, and statutory sick/maternity/paternity pay), so a pound of employer-side NI is no longer invisible to the MTR. Computation uses the same simulation-branching pattern as `marginal_tax_rate` — for each adult, branch the simulation, bump `employment_income` by the configured delta, recompute, and read both `household_net_income` and `employer_cost` in the branch. Division-by- zero is guarded for people whose employer cost happens not to move. No change to the existing `marginal_tax_rate` variable. Downstream surfaces (API, household calculator) would need a separate change to expose the new variable to end users. Co-Authored-By: Claude Opus 4.7 (1M context) <noreply@anthropic.com>
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Summary
marginal_tax_rate_wrt_employer_costthat mirrors the existingmarginal_tax_ratebut uses the change inemployer_cost(gross pay + employer NI + employer pension contributions + statutory sick/maternity/paternity pay) as the denominator. A pound of employer-side NI is therefore no longer invisible to the MTR.marginal_tax_rate: for each adult, branch, bumpemployment_incomeby the configured delta, recompute, and read bothhousehold_net_incomeandemployer_costin the branch.marginal_tax_rateis unchanged.Closes #45.
Notes
policyengine-api/policyengine-appis a separate change.marginal_tax_rate, no YAML test is added — the branching pattern is not naturally unit-testable through the standard yaml harness.Test plan
ruff format+ruff checkon the new file.system.variablesimport check).make test) on this branch.marginal_tax_ratefor a household with no employer NI liability — the two MTRs should match.🤖 Generated with Claude Code