Move taxable-income ceiling from SALT to aggregate itemized deductions - #9191
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…ing makes salt_deduction diverge from the §164(b)(7) amount at low AGI Closes PolicyEngine#9167
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Issue #9167 identifies that
salt_deductiondiverges from the §164(b)(7) SALT amount when AGI minus exemptions is below otherwise allowable SALT.Root cause: the simulation-only taxable-income ceiling was applied inside
salt_deduction.formula, so the component variable reflected a whole-return itemized deduction constraint instead of the statutory SALT deduction. That also madegov.simulation.limit_itemized_deductions_to_taxable_incomeaffect only SALT rather than aggregate itemized deductions.Changes:
salt_deduction.formula, leaving the variable to returnmin_(salt_cap, salt).itemized_taxable_income_deductions.formulaafteritemized_taxable_income_deductions_reduction, limiting aggregate itemized deductions tomax_(0, adjusted_gross_income - exemptions)when the flag is true.