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Using microsimulations this paper analyzes the poverty and tax implications of replacing current transfers and subsidies by a budget-neutral (no change in the fiscal deficit) universal basic income program (UBI) in Brazil, Chile, India, Russia, and South Africa. We consider three UBI transfers with increasing levels of generosity and identify scenarios in which the poor are no worse off than in the baseline scenario of existing social transfers. We find that for poverty levels not to increase under a UBI reform, the level of spending must increase substantially with respect to the baseline. Accordingly, the required increase in tax burdens is high throughout. We find that the increase in the average tax rate that would be consistent with not hurting the poor is almost universally above 30%, limiting the feasibility of a UBI reform due to political resistance and efficiency costs. [ABSTRACT FROM AUTHOR]

Globalization leads to significant transformations in the tax structures of countries, as in every field. Taxes come to the fore as the most effective tool in the competition of countries in order to attract highly mobile capital. With the effect of globalization, the national power of countries in the use of taxation powers weakens and it becomes a necessity for them to act in accordance with international requirements. The study analyzes the transformation of the globalization in the taxation of labor and capital in OECD member countries. For this purpose, tax revenues, tax rates, and the distribution of taxes types in total tax revenues are examined from 1965 to the present. As a result, it can be seen that globalization does not cause a decrease in the share of tax revenues in the Gross Domestic Product, both in OECD member countries and in Türkiye, on the contrary, it leads to increases. However, the tax burden changes in favor of capital and against labor. The most effective factors in this situation are the rate cuts in income tax and corporate tax, and especially the increase in social security premiums. Due to the increase in social security premiums, the high tax wedge is considered as a problem especially for Türkiye. [ABSTRACT FROM AUTHOR]

For a long time, governments of all countries have attached great importance to the development of underground economic activities. The reason is that the characteristics of the underground economy are hidden and the information disclosure is not sufficient, which not only distorts the economic data indicators, but more importantly, the existence of the underground economy has led to the loss of a large amount of tax base, affecting the long-term economic development of the country. Whether raising the tax burden rate boosts the tax revenue or expand the scale of the underground economy. In this paper, we use Kuznet Tax Curve (KTC) method to analyze the relationship between GDP and TTR/DTR/ITR. We find that the tax base erosion rate of indirect tax is lower than that of direct tax. In addition, we explore the relationship among economic growth, tax rate and tax revenue and adopt SUR-OLS method and Threshold approach to estimate the response of economic growth on total tax revenue(TTR), direct tax revenue(DTR) and indirect tax revenue (ITR) in Taiwan from 1991-2020. Our empirical research shows that when DTR tax rates are between 12.59% and 13%, an increase in income leads to a decrease, not an increase, in DTR, leading to severe tax base erosion. That is, the relationship between GDP and DTR presents a N-shaped relationship. However, ITR does not exist any tax rate threshold effect. Obviously, with the increase of GDP, ITR also increases. This reflects that the difference of tax structure between direct tax and indirect tax plays a key role in the relationship between tax rate and tax base erosion. [ABSTRACT FROM AUTHOR]

The purpose of this article is to report tax strategies used in popular products with high taxation, demonstrating the positive and negative impacts caused on companies through changes in tax classifications, productions or product structures to reduce tax costs as a result of the variation in the IPI value. For this purpose, the TIPI Table (tax incidence table on industrialized products) was used, which is a list of products with their respective rates. It is a file, regulated and constantly updated by the Federal Revenue, where the industrialized products, their specific Mercosur Common Nomenclature (NCM) and their respective tax rate are gathered. The application of this table and the reclassification of some popularly known products were studied and analyzed. In this study, it was noticed that such reclassifications allowed a reduction in the tax rates on industrialized products, thus maximizing the results of the companies. Finally, it was recommended that companies, mainly whose products marketed are considered "nonessential", properly carry out the tax classification of products, as there are possibilities to legally minimize taxation, thus increasing the profit margin, reducing sales prices. and consequently generating an increase in sales and revenue. However, in the opposite situation, there may be tax penalties if errors in the tax classifications occur. [ABSTRACT FROM AUTHOR]

The article evaluates the relationship between the tax burden on labor and magic quadrangle indicators in the Czech Republic in the years 1993 through 2020. The article examines whether indicators such as the effective rate or tax rate on labor affect the macro-economic indicators of the magic quadrangle. The originality of this study lies in the fact that it deals with the influence of political factors. The analysis shows the strongest correlation between the growth of gross domestic product and the implicit tax rate on labor. Moreover, the study finds that the factor with the most significant – and surprising – bearing on the findings is that fact that right-wing Parliament behaved like left-wing parties. The conclusions reached by this study further underline the significance of the tax burden on labor on the selected magic quadrangle indicators. [ABSTRACT FROM AUTHOR]

A higher tax burden in individual countries need not always deter investors from investing profitably. Countries use tax burden levels in the form of changes in tax rates to attract foreign investment. The main objective of this study is to examine the tax competitiveness of the Slovak Republic compared to European Union (EU) countries (EU-27) and to evaluate the origin, extent, and form of investments from foreign investors in tangible and intangible assets in the Slovak Republic. To meet this objective, we first calculate the average tax rate for specific crossborder investments coming to Slovakia from all EU countries. To determine tax competitiveness, we compare the calculated effective average tax rate (EATR) with the EATR in individual EU countries. Finally, we perform an analysis of EATR and foreign direct investment (FDI) using cluster analysis, which categorises EU countries and evaluates their tax competitiveness. The analysis and comparison of values are conducted for the year 2019, while the countries are divided into old (EU-15) and new (EU-12) EU member countries. The article concludes that the calculated Slovak EART for cross-border investment is more profitable for old EU member countries and is, thus, more tax-competitive versus investors' countries of origin. We can further state that the tax burden is among the most important indicators for investors and, thus, a lower EATR value than that in an investor's country of origin contributes to the inflow of equity participation of FDI in Slovakia. [ABSTRACT FROM AUTHOR]

This paper estimates the Laffer curve through a comparative statical analysis and an econometric exercise. Starting from a microeconomic specification, it first analyzes the distortion caused by an indirect tax and the welfare implications of maximizing tax collection. Then, using data on real per capita tax revenue and the tax rate, an estimate of an econometric model to calculate the optimal tax rate in Colombia is made. The results show that Laffer's postulates are proven with an optimal rate of 32% and suggest that the government has a margin of almost 12 percentage points. [ABSTRACT FROM AUTHOR]

The US has experienced a joint decline in corporate tax rates and startup rates in recent decades. We study how changes in corporate taxes affect startup rates in a firm dynamics model with occupational choice. A change in profit taxes has ambiguous effects on firm selection, and therefore on the startup rate. Quantitatively, the observed fall in US corporate tax rates generates, at most, one‐fifth of the startup rate decline. Sensitivity analysis suggests that this number is best interpreted as an upper bound, indicating that corporate taxes did not play a major role in the startup rate decline. [ABSTRACT FROM AUTHOR]

This study aims to measure the optimal tax burden of the Jordanian economy using time series data from 1980 to 2020. Laffer curve was utilized to measure the optimal size of tax revenues in Jordan, the optimal size of income tax and the current tax burden compared to the optimal size of tax. To this end, a standard model was used to estimate Laffer curve and a fully modified ordinary least squared model (FMOLS) was used to estimate the parameters. The results indicated that the current tax rates are lower than their optimal size. Income tax levels in Jordan are also lower than international levels, whereas the tax burden is relatively higher. The study recommended that the government can increase its income from income tax and profits by increasing the actual rates to be closer to the optimal rates. The study also recommended that the actual rates have to be increased differently across sectors, since decision-makers in Jordan are increasingly paying more attention to industrial sectors. [ABSTRACT FROM AUTHOR]

The external debt burden of many developing countries has increased their borrowing risk and interest charges on loans. The 2007–2008 global financial crisis exposed the vulnerability of developing countries' dependence on the international financial market (IFM). Given the uncertainty and higher borrowing risk, which limit access to external funds, it has become necessary that developing countries increase their internally generated revenue through taxation to facilitate growth and development. For effective distributive effect of tax policy, the tax burden ought to be optimal. This study estimates the optimal tax rate that maximises the economic growth for Ghana, using quarterly data from 2007 to 2017. Based on Scully's model, the study concludes that for the economy to grow at an average rate of 8.88% instead of the current 6.25%, the optimal tax rate should be raised from the current 15.30% to 27.69%. For policy purposes, the study highlights the implication of ensuring efficiency in revenue mobilisation through taxation. [ABSTRACT FROM AUTHOR]

Presently there is no definite agreement of taxes definition. Most of the statistics include to tax incomes all obligatory fee of the public sector, which is not based on principles of equivalency. In this case, taxes can be defined as obligatory fees of the public sector, to which governments do not provide direct equal consideration. Modern tax systems are based on the taxation of incomes, consumption, and property. The trend in the area of EU countries taxation is a transition of the tax burden from incomes and capital to consumption. Mainly conditions of mining organisations are presented in the contribution when tax rates and trends in the area of income tax of mining organisations are described. The goal of the contribution is to describe the tax burden of business subjects (mining and extraction organisations) in Hungary, Slovakia, Poland, and the Czech Republic. In the contribution, we orientate the research to a detailed analysis of tax rates in chosen countries. The contribution consists of results conclusions, found by analysis, as well as by comparison of the tax burden of V4 business subjects. The result of the problem analysis presents suggestions of the tax mix change and transition to the relatively high tax burden of a job, mainly for low-income employees, to the lower tax burden of high taxes, as for example, environmental taxes. The results are useful for the management of mining organisations, which provide a possibility of financial savings. On the international level, the results serve for the comparing of the financial situation of mining organisations in V4 countries, which is suitable for a determination of raw material states policies. [ABSTRACT FROM AUTHOR]

Keywords: corporations; Democratic Party; equality; politics; social welfare; neoliberalism EN corporations Democratic Party equality politics social welfare neoliberalism 91 93 3 01/04/22 20220101 NES 220101 Graph Could the tax code once again become an effective instrument of progressive wealth redistribution in the American economy? Corporations, equality, politics, social welfare, neoliberalism, Democratic Party And these other, somewhat less notorious tax scofflaws were less reticent about coming out in opposition to Biden's tax proposals. [Extracted from the article]

Purpose - This research was aimed at verifying the influence of the tax burden on the value added produced by publicly traded companies listed in Brazil Bolsa Balcão (B3). Design/methodology/approach - The study had a quantitative approach and the sample period was from 2010 to 2016. Given the complexity of the Brazilian tax burden - characterized by high tax rates and confusing legislation - and the importance of value added as an accounting metric with economic impact, this research relied on the public choice theory and the elasticity of taxable income to analyze the relationship between the level of tax burden and the process of wealth generation in Brazilian companies. Findings - The empirical evidence found in this study corroborates the theoretical understanding that the tax burden in Brazil exerts a negative influence on the value added produced by companies. Practical and Social implications - This conclusion is a relevant assessment for society as a whole, as it is necessary to protect and maximize companies' wealth-adding process, since it is the resources produced by companies that will be shared in the economy with society, whose development depends on the wealth creation process. Originality - The use of the added value produced as a metric of efficiency or saturation of the tax burden borne by companies in the Brazilian market. [ABSTRACT FROM AUTHOR]

This study analyses the VAT tax rate heterogeneity for the case of the Czech Republic. While the European Union recommends tax harmonization, the Czech legislature differentiates among three VAT tax rate groups. Those tax groups' composition has recently changed as the government intends to ease the tax burden during the coronavirus pandemic. Yet, the Czech authority misses an impact evaluation tool of such policy measures for local industries. The EU ambition and the ongoing tax-policy reforms necessitate the model developed in this study which analyses the tax effect at a detailed industrial level. The simulation outcome discloses the sectors which are the most susceptible to VAT taxation changes and suggests the most beneficial tax differentiation scheme to boost economic production. The results support the current tax legislation changes in favour of the more heterogeneous indirect tax rates. A lower tax rate for the industrial sector seems especially advantageous in mitigating the gross domestic product's negative tax impact. [ABSTRACT FROM AUTHOR]

The paper examines the efficiency and equity trade-off in the tax system. While efficiency usually recounts to how well an economy assigns limited resources to meet the needs of consumers, the goal of equity is to analyse the distribution of resources. Thus, it is related to the concepts of fairness and social justice. Efficiency deals with the optimal production and allocation of resources within the available production factors. In the tax system, efficiency means the ability to collect sufficient public revenues by making a tax system as simple as possible. Equity examines how available resources are distributed in the society. Vertical equity deals with the relative income and welfare of the population or with how equitably available resources are distributed. It may imply higher tax rates for citizens with higher incomes. Horizontal equity is based on the belief that earners with the same income should pay taxes at the same tax rate. The aim of the article is to identify those conditions under which there is no conflict between equity and efficiency in the tax system. The tax system is the government's main lever to redistribute income, but there is a potential balance between equity and efficiency. The idea is to determine policy measures which stimulate greater equity, but have no or little effect on efficiency. In other words, our intention is to find out policy actions where equity and efficiency support each other and where tax measures may perhaps even enable a more efficient fiscal system. [ABSTRACT FROM AUTHOR]

The factors affecting people's motivation to pay voluntary taxes can be listed in 7 headings: complexity in the tax system, social and demographic impacts, religious beliefs and moral values, penalty rates and supervision, tax forgiveness, the influence of financial advisers, and trust in governments and corruption. The study focuses on the factors underlying the behavior of individuals paying or not paying taxes. In this context, in order to understand the thoughts of individuals, the opinions of university students, the taxpayers of the future, were investigated and their attitudes towards tax payments and donations, which are the unpaid payments made by people from their pockets, were examined. In order to better understand these attitudes, a face-to-face survey was conducted with 666 university students studying at Pamukkale University, and as a result of the analyses, it was observed that the average of individuals ' overall tax perception and attitudes towards helping individuals were higher. However, while the average perception of the tax system applied was low, the respondents found the tax rates and tax burden to be high and the tax system to be unfair. According to the results of the ANOVA test, where variable averages are compared according to the general trust levels, the perception of the tax system applied to individuals with high trust levels and the averages of aid to charities are also higher. However, regardless of the level of trust of people, it is seen that they are positive about helping individuals and their tax perception is high. However, it is seen that trust levels have decreased when institutions have entered the system. In other words, the trust levels of individuals who are positive about donating to people decrease when the institution enters into the business, and in individuals whose tax perception is positive, it is observed that their viewpoints turn negative when it comes to the tax system applied. [ABSTRACT FROM AUTHOR]

This article examines whether government control of companies is a factor influencing tax aggressiveness, through a comparative analysis of these firms versus privately controlled companies listed on the BM&FBovespa. The analysis covers the period from 2009 through 2013 and aggressiveness is measured by three metrics: effective tax rate (ETR), book-tax difference (BTD) and tax burden disclosed in the statement of value added, which we call the tax rate on added value (TRAV). The results of the regressions confirm the main hypothesis regarding taxation of profit and also of gross revenue, because government-controlled corporations had significantly higher ETR and TRAV, indicating less tax aggressiveness. Although the result for BTD was not conclusive to indicate the aggressiveness profile, based on the other two variables, it can be stated that shareholding control by the government is a factor determining lower tax aggressiveness in Brazil. [ABSTRACT FROM AUTHOR]

This paper examines firms' asset volatility across a broad cross-section of publicly traded Taiwanese listed nonfinancial firms and its relationship with effective tax rate and equity volatility under the capital structure framework. By analysing the leverage effect hypothesis of firms under the asymmetric diagonal VECH-GJR model, we find both equity volatility and asset volatility do not show the asymmetric effect. In the context of equity volatility dynamics, financial leverage turns from being negatively related to equity volatility to being positively related to equity volatility when the model adds asset volatility as a control variable. Moreover, lower equity volatility is found to be associated with higher effective tax rates. [ABSTRACT FROM AUTHOR]

In the European communities, the need for tax harmonization has begun to commence since the beginning of integration efforts in the 1960s. The first attitudes to tax harmonization were very ambitious. The plan was not only structural harmonization but also harmonization of tax rates. The paper examines the nature and course of the direct tax harmonization process, describes its advantages and disadvantages as well as the positive and negative effects of tax competition. The paper aims to examine the development and volume of selected income taxes collected in the Member States of the European Union. It tells whether the harmonization of income taxes is still a stagnant process. Cluster analysis deals with looking for similarities of multidimensional objects. Two clustering methods were used – hierarchical agglomeration clustering and non-hierarchical clustering. Cluster analysis aimed to achieve groups of states that would have some homogeneity. Cluster analysis sorted the data into sets with the highest possible similarity within the group and the most significant difference between the groups. Analysis of tax burden and income tax rates confirmed significant differences in these indicators across the EU. On the other hand, cluster analysis revealed similar developments in tax systems in terms of their geographical location in Europe. Cluster analysis can be used to suggest possible steps to co-operate in harmonizing Member State taxes in the future. The authors of this article propose the possibility of harmonizing taxes and cooperating gradually within clusters rather than trying to apply uniform rules in all EU Member States at the same time. The conclusion of the article raises problems in the field of harmonization of direct taxes in the EU. The possibility of preserving autonomy in deciding on tax burden in the country is left to the many Member States because they see that autonomy as a competitive advantage, particularly in the field of investment. [ABSTRACT FROM AUTHOR]

The literature on Effective Tax Rates (ETRs) focuses on high‐ and middle‐income countries, but there is very little evidence on low‐income countries. This article addresses this gap with new evidence from Ethiopia. We investigate corporate ETRs in Ethiopia and whether the distributional effects they have in practice are in line with the corporate tax policy design. We calculate ETRs in line with the literature in this field, using profit tax at the numerator and gross profit at the denominator. We then analyse ETRs not only using panel data, focusing particularly on their relation to firm size, but also including other explanatory variables. Our main result is that, despite a proportional tax rate, small firms face a higher effective tax burden than larger firms, while middle‐sized firms face the lowest burden of all. We highlight that tax systems can have practical implications that differ largely from their policy design, due to compliance costs and imperfect enforcement. Measures to reduce compliance costs for small firms are particularly recommended. [ABSTRACT FROM AUTHOR]

Home Equity Conversion Mortgage (HECM) loans experience high rates of property tax default (IFE, 2016; CFPB, 2012). Given tax burden is predictive of default (Moulton et al., 2015), it is important for HECM participants to take advantage of available property tax relief programs. To examine participation in property tax relief programs, we match loan-level HECM origination records with local administrative tax records for properties in Chicago, IL. We find that nearly 40% of eligible HECM borrowers do not participate in a senior tax relief program for which they meet all eligibility requirements. Further, we find that senior tax relief participation is associated with a reduced probability of property tax default of 60%. [ABSTRACT FROM AUTHOR]

The main purpose of this study is to show that motor vehicle tax in Turkey is in the wealth tax-environmental tax dilemma and that tax justice cannot be fully achieved. With the Law No. 7061 issued in 2017, the addition of the "vehicle value" measure in addition to the age and motor volume criteria for automobiles, land vehicles and station wagon cars has strengthened the wealth of motor vehicles tax. However, the issue is insufficient at the point of solving the problems. In this study, tax rates related to motor vehicle tax are introduced and opinions and attitudes of motor vehicle taxpayers in Denizli province are given. According to the results obtained, taxpayers consider motor vehicle tax as a wealth tax rather than environmental tax. In addition, taxpayers consider that the duty of motor vehicle tax is heavy and the duty of motor vehicle tax must be taken over the actual market value of the vehicles. The taxpayer's perception of tax justice is that the tax burden of motor vehicles is not distributed in a fair way. When the relationship between demographic variables such as age, gender, marital status, education level and income level and taxpayer attitudes is examined, it is seen that the effect on the taxpayer attitudes of the gender factor is more evident. [ABSTRACT FROM AUTHOR]

Restaurant services are one of the most demanded tourism products with high competition in terms of price and quality. However, the high incidence of labor taxes and value added tax directly impacts the final price of goods, forcing restaurants to operate in a shadow economy to keep their prices lower. The aim of the research is to assess how value added tax incidence is related to labor costs, specifically the impact of value added tax on restaurants, as one of the examples of a labor-intensive industry. The research concludes, that value added tax has a more negative impact on labor-intensive companies, because in-put value added tax (from purchased goods and services) is deducted proportionately less, as it is not charged and, therefore, deductible from labor costs. As a result, restaurants have a higher value added tax incidence than other less labor-intensive industries. The high value added tax incidence stimulates tax non-compliance and overall loss to the national economy. The research suggests that, in order to minimize the negative impact of value added tax incidence, a reduced value added tax rate may be applied to the final services provided by restaurants. [ABSTRACT FROM AUTHOR]

The Czech Parliament approved a wide-ranging reform of direct taxes in 2011. Absent other legislative changes, the reform will come into force on January 1, 2015. We evaluate its impacts on the tax burdens and the average and marginal tax rates in a representative sample of Czech individuals and households. The main impact of the reform is a reduction in the average tax rates for the self-employed in the 5th through 10th income deciles, most frequently by 4.4 percentage points. The variation in the change in the average tax rates among the self-employed in low incomes deciles is large and varies between minus 5 to plus 5 percentage points. The reform would reduce the taxes for most employees only slightly but it would increase the average tax rate by up to 5 percentage points for employees with earnings exceeding four times the average wage. The effective marginal tax rates faced by the self-employed would drop most commonly by either 4.4 or 10-11 percentage points, while the effective marginal tax rates faced by employees would remain unchanged. The impacts on the households are highly heterogeneous depending on the share of income from self-employment in the household's total income. The reform would reduce the budget revenues by approximately CZK 19 billion. [ABSTRACT FROM AUTHOR]

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR. [ABSTRACT FROM AUTHOR]

• Grocery taxes existed in more than one third of U.S. states in 2020. • States with grocery taxes or considering grocery taxes tend to have higher food insecurity. • Taxing groceries correlates with increases in food insecurity. • Taxing groceries on average at 4.2% increases the probability of low-income household food insecurity by 3.3%. • Policymakers should look at ways to lessen the burden of this tax on lower-income households. In the United States, grocery tax policy varies at both state and county levels, with 16 states having grocery taxes in 2020. Several states are engaged in active debates about whether to remove or impose such taxes. Although the extant literature evaluates multiple factors that may contribute to food insecurity, little is known about the relationship between grocery food sales taxes and food insecurity. We present county-level panel data on grocery taxes from 2006 through 2017 and find that jurisdictions with grocery taxes are among the most food insecure in the country. The regressiveness of grocery taxes exacerbates food insecurity, at least in theory. We link our tax data with county-level food insecurity measures and other data from the Current Population Survey. Treating grocery taxes as exogenous, we estimate that a one percentage point increase in grocery tax rates is associated with a 0.84% increase in the probability of being food insecure for low-income households. Using these estimates, we conduct policy simulations of grocery taxes that have been recently considered in six states and assess the potential impacts on food insecurity. One caveat is that our estimator may be biased towards or away from zero depending on whether increases in grocery taxes within counties over time are positively or negatively correlated with unobservables affecting food security. However, assuming the onset and removal of grocery taxes within a county are exogenous, our results show that proposed grocery taxes may exacerbate food insecurity by one to five percentage points. [ABSTRACT FROM AUTHOR]

Through its NDC, Brazil pledged to reduce its GHG emissions by 43% below 2005 levels in 2030, respectively. Carbon pricing could play a key role in meeting this objective. However, a range of issues can emerge when introducing it. Among these issues, the distributional impact has been frequently highlighted as an obstacle to the public acceptance of such a mitigation policy. This paper examines the short-run welfare and emission effects of an economy-wide carbon tax on Brazilian households. The distributional impact is examined by estimating the tax burden relative to annual expenditures and changes in total GHG emissions across income levels, using tax rates consistent with the Paris Agreement and considering a lump-sum rebate that keeps the government revenue neutral. For this, we calculate energy-related GHG emissions coefficients from fossil fuel burning for the whole household consumption basket, and price and expenditure elasticities which account for the zero-expenditure and underdeclaration problems. Our results indicate that the incidence of the carbon tax is effective in reducing emissions in the short run, but imposes welfare losses, especially on the poor. The consideration of compensation mechanisms is critical when designing this type of environmental tax, specially in the context of a highly complex tax-system. [ABSTRACT FROM AUTHOR]