Tax-benefit microsimulation modelling

The core microsimulation model in Beamm is relatively straightforward: it computes for each (fictitious) individual or household all the modeled taxes, the social contributions, and the social benefits as precisely as possible. The online platform performs this operation twice. Before runtime, we calculate all these taxes and benefits ourselves and store these results in memory. A second simulation is run when a user has specified a reform in the online interface and has clicked on the “Simulate” button. At present, Beamm covers the personal income tax, social security contributions, VAT & excise duties, inheritance taxes, car taxes, property taxes, investment income taxes, gift taxes, birth allowances, income support, child benefits, pensions, and maternity leave. How these instruments are modeled is documented in the Beamm’s tax-benefit documentation, available via the top menu bar. It should be added that a few of these instruments, e.g., social contributions, pensions and unemployment benefits, are modelled in a highly stylized fashion for now due to data limitations. Besides this standard set of policies, Beamm is also designed to be a polyvalent platform to which the development team can easily add custom public policies, to the extent that these affect households and as far as our data allow us to calculate the policy.

Each model is necessarily an imperfect representation of reality, and this is no different for Beamm. Our team keeps working to improve and update the code to simulate the different tax-benefit instruments. The tax-benefit documentation, available via the top menu bar, precisely documents how each tax-benefit instrument is modeled in Beamm and what modeling assumptions have been made if necessary.