Between - Group Transfers and Poverty - Reducing Tax Reforms

In this paper, we propose the conception of Within-group Consumption-Dominance Curves in order to capture the impact of indirect tax reforms on poverty. Considering that the population is partitioned into many groups, which differ in needs, in health, in capability or other attributes, we introduce within-group transfers and between-group transfers via indirect taxation mechanisms in order to reduce the poverty for the entire population and the poverty in particular population sub-groups. We show that these taxation schemes are useful for many reasons: there is no need to estimate demand functions; the tax reforms are robust over a large range of poverty indices; the methodology relies on a stochastic dominance approach.