This report presents estimates of after-tax household income and taxes paid by households in 1981. These estimates were made using a computer tax-simulation model based on the March 1982 Current Population Survey (CPS). The main purpose of this report is to provide a better measure of year-to-year changes in household purchasing power and of differences in purchasing power between subgroups of the population. Four types of taxes were simulated and subsequently deducted from the total money income received by households in order to estimate after-tax income: Federal individual income taxes, State individual income taxes, FICA and Federal retirement payroll taxes, and property taxes on owned housing. A discussion of the important limitations of the simulation procedures and underreporting of income in the CPS is contained in the limitations Section. A detailed description of the tax simulation methodology can be found in appendix A, along with comparisons of the results of the tax simulation with data from the Internal Revenue Service and other administrative sources. A previous special study released by the Census Bureau in August 1983 contained comparable estimates of after-tax household income for 1974 and 1980.