Is there an after tax income variable or must I compute it as TAXINC-FEDATAX-STATATAX?
The CPS income variables all refer to before-tax income. To approximate after-tax income in a manner consistent with the Census Bureau, you should subtract FEDTAXAC, STATAXAC, FICA, FEDRETIR, and PROPTAX from your income variable. Keep in mind that tax variables in the CPS, excluding PROPTAX, were not determined by direct questioning of respondents. Rather, values for these variables come from the Census Bureau’s tax model, which simulates individual tax returns to produce estimates of federal, state, and payroll taxes. The model incorporates information from non-CPS sources, such as the Internal Revenue Service’s Statistics of Income series, the American Housing Survey, and the State Tax Handbook.
Hope this helps.