Social Policy Simulation Database/Model, [Canada]: Version 8.1 - 20

The Social Policy Simulation Database and Model (SPSD/M) is a tool designed to analyze the financial interactions of governments and individuals in Canada. It allows the assessment of the cost implications or income redistributive effects of changes in the personal taxation and cash transfer system. There are four basic elements to the SPSD/M: a database (the SPSD), a model (the SPSM which is comprised of a set of simulation algorithms), data retrieval and reporting software, and user documentation. The SPSD is a non-confidential, statistically representative database of individuals in their family contexts, with enough information on each individual to compute taxes paid to and cash transfers received from government. The SPSM is a static accounting model which processes each individual and family on the SPSD, calculates taxes and transfers using algorithms that simulate legislated or proposed programs, and reports on the results. A sophisticated softw are environment gives the user a high degree of control over the inputs and ou tputs to the model and allows the user to modify existing programs or to examine proposals for entirely new programs. Within the SPSM there are two models, configured as two distinct computer programs. The central program, the SPSM, is a microsimulation model which calculates taxes and transfers for individuals and families. These calculations are performed for everyone on the SPSD and then aggregated to obtain estimates. The SPSM is a static impact model and is therefore not intended to simulate how an individual's behaviour is likely to change in response to various policy options. The SPSM program includes software which allows the user to perform tabulation and database r etrieval operations on the database information. The commodity tax model (COMTAX), is a macro-economic Input/Output based model. This model is not currently released with the SPSD/M package but rather the results from it are. COMTAX provides estimates of effective federal and provincial retail sales-taxequivalent commodity tax rates by province, household expenditure category, and tax type. This model is required because many commodity taxes are levied at intermediate stages of product ion, not at the final retail stage. Rates calculated by the COMTAX model can be input as parameters into the SPSM to obtain estimates of the commodity taxes paid, both directly and indirectly, by any given household. The data retrieval and reporting software are configured as facilities accessed through the model. They allow the user to produce formatted output and to perform specific kinds of analysis. The user documentation is extensive and comprehensive. It is divided into three manuals with a number of guides in each. There are also two ways of running the SPSM: using the Visual SPSM interface and using the Classic SPSM mode. Visual SPSM: The Visua l SPSM interface allows users to modify model parameters directly, run simulations using SPSM, and examine outputs. Classic SPSM: The SPSM can also be run from the command interpreter (cmd). CAPABILITIES AND FEATURES The SPSD/M algorithms operate on a database created using survey and administrative data from 2002. The SPSD/M comes with the necessary algorithms and parameters to simulate the tax/transfer systems in that year. The SPSD/M also performs projections to all other years from 1991 through 2010. The following is a list of the major programs which can be simulated with th e SPSM. Users can add their own algorithms to this set. Personal Income Taxes 1991 to 2010 taxation year algorithms Major deductions and tax credits Payroll taxes (CPP/QPP, UI/EI). Both Federal and Provincial tax algorithms. Cash Transfers Unemployment Insurance/Employment Insurance benefits Old Age Security benefits including partial benefits Guaranteed income supplement benefits including partial ben efits Provincial GIS supplement programs Federal Child Benefit GST Tax Credit Commodity Tax Model Ten different tax types accounted for including: Federal Import Duties Provincial profits on liquor commissions Federal Fuel Taxes Provincial Fuel Taxes Provincial Retail Sales Taxes Cascading effects between taxes Determination of household expenditures net of implicit commodity tax es The SPSM is written in the C++ programming language. Changes to the tax/transfer model algorithms can be made in two distinct ways: the \"black box\" or the \"glass box\" mode. The majority of SPSM analyses operates in \"black box\" mode.