Distortionary

Uwaleke said the budget is promising but the distortionary impact of forex regime could be a major challenge to the budget.

But there are better approaches than a wealth tax, which would be highly distortionary and is unlikely to capture nearly as much revenue as its proponents claim.

In the context of a distortionary tax, the compensating variation is the minimum lump sum transfer that makes an individual indifferent between the lump sum transfer with tax and no lump sum transfer with no tax (the original situation).

Revenues from auctioning go to the government and can be used for development of sustainable technology citation or to cut distortionary taxes, thus improving the efficiency of the overall cap policy (Fisher et al.

This difference is attributable to the behavioural changes induced by a distortionary tax that are measured by a substitution effect.