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¶
budgetary/overall/budgetary_impact
: Overall budgetary impact of the reformbudgetary/overall/benefit_spending_impact
: Impact on total benefit spendingbudgetary/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:
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.
Benefit Spending Impact:
Baseline total benefits: £247.16 billion
Reformed total benefits: £249.03 billion
The reform increases benefit spending by £1.87 billion
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).