// Volatility analysis for Washington's millionaires tax (ESSB 6346): an illustrative back-cast and crash scenarios.
// OUR ILLUSTRATION, NOT A FORECAST. Run: node volatility.js
// Inputs (same folder):
//   wa_irs_1m_plus_history.csv       IRS SOI: WA Historic Table 2 (1997-2001, 2010-2023 have a $1M+ class;
//                                    2002-2009 top out at $200k+), US Table 1.4 $1M+ (1998-2023)
//   wa_revenue_by_source_history.csv WA sales / B&O / property collections by fiscal year (optional)
// Outputs: wa_millionaires_tax_backcast.csv, wa_crash_scenarios.csv, volatility_results.json
//
// Back-cast method: the tax is 9.9% of income above $1M, so revenue scales with the "excess base",
//   excess = AGI of $1M+ returns - (number of $1M+ returns x $1M).
// Gross illustrative tax = 9.9% x excess. Ignores: the shared $1M deduction for couples filing separately,
// the long-term capital gains swap and credit for WA capital gains tax (sec. 302), the 4.71% enforcement haircut,
// 90-95% compliance, inflation indexing of the threshold, and any behavioral response. The $1M threshold is applied in
// nominal dollars in every year, so early years overstate the threshold's real value.
const fs = require("fs"), path = require("path");
const dir = __dirname;
const RATE = 0.099;

function readCsv(file) {
  const lines = fs.readFileSync(path.join(dir, file), "utf8").trim().split(/\r?\n/);
  const h = lines[0].split(",");
  return lines.slice(1).map(l => {
    const v = l.split(","), o = {};
    h.forEach((k, i) => { o[k] = v[i] === "" || v[i] === undefined ? null : (isNaN(+v[i]) ? v[i] : +v[i]); });
    return o;
  });
}
const pct = (a, b) => (a == null || b == null || b === 0) ? null : +(100 * (a / b - 1)).toFixed(1);
const r2 = x => x == null ? null : +x.toFixed(2);
const r3 = x => x == null ? null : +x.toFixed(3);

// ---- 1. Back-cast ----
const irs = readCsv("wa_irs_1m_plus_history.csv").filter(r => r.topClass === "1M+" && (r.geography === "WA" || r.geography === "US"));
const backcast = [];
for (const geo of ["WA", "US"]) {
  const rows = irs.filter(r => r.geography === geo).sort((a, b) => a.taxYear - b.taxYear);
  let prev = null;
  for (const r of rows) {
    const excess = r.agi1mPlusBillion - r.returns1mPlus / 1000; // $B: returns x $1M = returns/1000 $B
    const tax = RATE * excess;
    const exCg = r.netCapitalGain1mPlusBillion == null ? null : RATE * Math.max(0, excess - r.netCapitalGain1mPlusBillion);
    const consecutive = prev && prev.taxYear === r.taxYear - 1;
    backcast.push({
      taxYear: r.taxYear, geography: geo,
      returns1mPlus: r.returns1mPlus,
      agi1mPlusBillion: r3(r.agi1mPlusBillion),
      netCapitalGain1mPlusBillion: r3(r.netCapitalGain1mPlusBillion),
      excessOver1mBillion: r3(excess),
      illustrativeTaxBillion: r3(tax),
      illustrativeTaxExNetCgBillion: r3(exCg),
      agiYoYPct: consecutive ? pct(r.agi1mPlusBillion, prev.agi1mPlusBillion) : null,
      netCgYoYPct: consecutive ? pct(r.netCapitalGain1mPlusBillion, prev.netCapitalGain1mPlusBillion) : null,
      illustrativeTaxYoYPct: consecutive ? pct(tax, prev.tax) : null,
      label: "OUR ILLUSTRATION: 9.9% x (AGI - returns x $1M), gross, static, nominal $1M threshold",
    });
    prev = { taxYear: r.taxYear, agi1mPlusBillion: r.agi1mPlusBillion, netCapitalGain1mPlusBillion: r.netCapitalGain1mPlusBillion, tax };
  }
}
const bc = (geo, y) => backcast.find(r => r.geography === geo && r.taxYear === y);
const drop = (geo, y0, y1, k = "illustrativeTaxBillion") => +(1 - bc(geo, y1)[k] / bc(geo, y0)[k]).toFixed(3);

// ---- 2. Crash scenarios against official baselines ----
// Baselines: ERFC Sept 25, 2026 forecast, 2029-31 biennium $9.435B (FY30-31) -> ~$4.72B/yr;
// ESSB 6346 fiscal note (OFM FNS pkg 77653) FY30 $3.732B (first full year).
const baselines = [
  { name: "ERFC Sept 2026, FY30-31 average", annualBillion: 9.435 / 2 },
  { name: "Fiscal note pkg 77653, FY30", annualBillion: 3.732 },
];
const scenarios = [
  { scenario: "2022-style (WA, TY2021 to TY2022)", geo: "WA", from: 2021, to: 2022, years: 1 },
  { scenario: "2022-23 two-year (WA, TY2021 to TY2023)", geo: "WA", from: 2021, to: 2023, years: 2 },
  { scenario: "Dot-com (WA, TY2000 to TY2001)", geo: "WA", from: 2000, to: 2001, years: 1 },
  { scenario: "Dot-com peak to trough (US $1M+, TY2000 to TY2002)", geo: "US", from: 2000, to: 2002, years: 2 },
  { scenario: "Great Recession (US $1M+, TY2007 to TY2009)", geo: "US", from: 2007, to: 2009, years: 2 },
  { scenario: "Great Recession, first year (US $1M+, TY2007 to TY2008)", geo: "US", from: 2007, to: 2008, years: 1 },
];
const crash = [];
for (const s of scenarios) {
  const d = drop(s.geo, s.from, s.to), dx = drop(s.geo, s.from, s.to, "illustrativeTaxExNetCgBillion");
  for (const b of baselines) {
    crash.push({
      scenario: s.scenario, baseline: b.name,
      excessBaseDropPct: +(100 * d).toFixed(1),
      baselineAnnualBillion: r2(b.annualBillion),
      revenueAfterBillion: r2(b.annualBillion * (1 - d)),
      annualHitBillion: r2(b.annualBillion * d),
      // Variant: base excluding all net capital gains (closer to the income tax alone, since sec. 302/205 shift
      // long-term gains to the capital gains tax). SOI net CG includes short-term gains, so this understates the base.
      exNetCgBaseDropPct: +(100 * dx).toFixed(1),
      exNetCgAnnualHitBillion: r2(b.annualBillion * dx),
      label: "OUR ILLUSTRATION, NOT A FORECAST: baseline x historical % drop in the excess-over-$1M base",
    });
  }
}

// ---- 3. Volatility comparison ----
function stats(series) { // series: array of YoY % changes
  const v = series.filter(x => x != null);
  const mean = v.reduce((a, b) => a + b, 0) / v.length;
  const sd = Math.sqrt(v.reduce((a, b) => a + (b - mean) ** 2, 0) / (v.length - 1));
  return { n: v.length, meanYoYPct: r2(mean), sdYoYPct: r2(sd), minYoYPct: Math.min(...v), maxYoYPct: Math.max(...v),
           yearsDown: v.filter(x => x < 0).length };
}
const vol = {
  waIllustrativeTax: stats(backcast.filter(r => r.geography === "WA").map(r => r.illustrativeTaxYoYPct)),
  waAgi1mPlus: stats(backcast.filter(r => r.geography === "WA").map(r => r.agiYoYPct)),
  waIllustrativeTaxExNetCg: stats((() => { const w = backcast.filter(r => r.geography === "WA"); return w.map((r, i) => i && w[i - 1].taxYear === r.taxYear - 1 ? pct(r.illustrativeTaxExNetCgBillion, w[i - 1].illustrativeTaxExNetCgBillion) : null); })()),
  usIllustrativeTax: stats(backcast.filter(r => r.geography === "US").map(r => r.illustrativeTaxYoYPct)),
};
const capGains = [782.0, 394.7, 583.8, 1500]; // DOR, TY2022-25, $M (TY2025 rounded, includes 2.9% surcharge)
vol.waCapitalGainsTax = stats(capGains.slice(1).map((x, i) => pct(x, capGains[i])));
const srcFile = path.join(dir, "wa_revenue_by_source_history.csv");
if (fs.existsSync(srcFile)) {
  const src = readCsv("wa_revenue_by_source_history.csv").sort((a, b) => a.fiscalYear - b.fiscalYear);
  for (const k of ["retailSalesMillion", "boMillion", "statePropertyMillion", "totalGfsMillion"]) {
    // Total GF-S switches from ERFC's older "GF-S plus related fund" series (FY1998-2004) to the current definition (FY2005+), so FY2005 change is left blank.
    const yoy = src.map((r, i) => i && src[i - 1].fiscalYear === r.fiscalYear - 1 && !(k === "totalGfsMillion" && r.fiscalYear === 2005) ? pct(r[k], src[i - 1][k]) : null);
    if (yoy.some(x => x != null)) vol[k.replace("Million", "")] = stats(yoy);
  }
}

// ---- Write ----
function writeCsv(file, rows) {
  const h = Object.keys(rows[0]);
  const esc = v => v == null ? "" : (/[",]/.test(String(v)) ? `"${String(v).replace(/"/g, '""')}"` : v);
  fs.writeFileSync(path.join(dir, file), [h.join(","), ...rows.map(r => h.map(k => esc(r[k])).join(","))].join("\n") + "\n");
}
writeCsv("wa_millionaires_tax_backcast.csv", backcast);
writeCsv("wa_crash_scenarios.csv", crash);
fs.writeFileSync(path.join(dir, "volatility_results.json"), JSON.stringify({ volatility: vol, crash }, null, 2));
console.log(JSON.stringify(vol, null, 1));
for (const c of crash) console.log(c.scenario.padEnd(58), c.baseline.padEnd(34), c.excessBaseDropPct + "%", "(exCG " + c.exNetCgBaseDropPct + "% $" + c.exNetCgAnnualHitBillion + "B)", "$" + c.annualHitBillion + "B hit ->", "$" + c.revenueAfterBillion + "B");
for (const r of backcast.filter(r => r.geography === "WA")) console.log(r.taxYear, r.excessOver1mBillion, r.illustrativeTaxBillion, r.illustrativeTaxYoYPct, r.illustrativeTaxExNetCgBillion);