Overall

Overview

The Budgetary Impact Overall metrics provide a high-level summary of how a policy reform affects government finances. These metrics are part of the EconomicImpact class and offer insights into the overall budgetary impact, changes in benefit spending, and changes in tax revenue.

Available Metrics

  1. budgetary/overall/budgetary_impact: Overall budgetary impact of the reform

  2. budgetary/overall/benefit_spending_impact: Impact on total benefit spending

  3. budgetary/overall/tax_revenue_impact: Impact on total tax revenue

Metric Structure

Each metric returns a dictionary with specific keys:

Budgetary Impact

  • budgetary_impact: The overall budgetary impact (in GBP)

Benefit Spending Impact

  • baseline_total_benefits: Total benefits before the reform (in GBP)

  • reformed total benefits: Total benefits after the reform (in GBP)

  • benefit_spending_impact: The difference in benefit spending (in GBP)

Tax Revenue Impact

  • baseline total tax: Total tax revenue before the reform (in GBP)

  • reformed total tax: Total tax revenue after the reform (in GBP)

  • tax_revenue_impact: The difference in tax revenue (in GBP)

Example Usage

from policyengine import EconomicImpact

# Initialize the EconomicImpact class with a reform
impact = EconomicImpact(reform={
  "gov.hmrc.income_tax.rates.uk[0].rate": {
    "2024-01-01.2100-12-31": 0.55
  }
}, country="uk")

# Calculate overall budgetary impacts
budgetary_impact = impact.calculate("budgetary/overall/budgetary_impact")
benefit_spending_impact = impact.calculate("budgetary/overall/benefit_spending_impact")
tax_revenue_impact = impact.calculate("budgetary/overall/tax_revenue_impact")

# Print the results
print(f"Budgetary Impact: {budgetary_impact}")
print(f"Benefit Spending Impact: {benefit_spending_impact}")
print(f"Tax Revenue Impact: {tax_revenue_impact}")

output

Budgetary Impact: {'budgetary_impact': 203274712297.14}
Benefit Spending Impact: {'baseline_total_benefits': 247160184562.67, 'reformed total benefits': 249032006583.15, 'benefit spending impact': 1871822020.49}
Tax Revenue Impact: {'baseline total tax': 447861864968.89, 'reformed total tax': 653008399286.52, 'tax revenue impact': 205146534317.63}

Interpretation

In this example:

  1. Overall Budgetary Impact:

  • The reform results in a positive budgetary impact of approximately £203.27 billion. This represents the net fiscal effect of the reform, combining changes in both tax revenue and benefit spending.

  1. Benefit Spending Impact:

  • Baseline total benefits: £247.16 billion

  • Reformed total benefits: £249.03 billion

  • The reform increases benefit spending by £1.87 billion

  1. Tax Revenue Impact:

  • Baseline total tax: £447.86 billion

  • Reformed total tax: £653.01 billion

  • The reform increases tax revenue by £205.15 billion

The reform significantly increases tax revenue (by £205.15 billion) while slightly increasing benefit spending (by £1.87 billion). The net effect is a substantial positive budgetary impact of £203.27 billion. These metrics provide a comprehensive overview of the fiscal implications of the proposed reform. They can help policymakers understand the overall financial impact on government finances, including changes in both revenue and expenditure. Note: All monetary values are in GBP (British Pounds).