Estimated tax payments are then divided by net income {i.e. gross earnings minus personal income tax and employees’ social security contributions plus family benefits). For instance, food, water supply, medical care and public transport are often granted reduced rates or exemptions.31 This approach typically implies a considerable dead-weight loss and people at higher income levels often benefit more in absolute terms since they consume more. In the case of Mexico, the total implicit subsidy due to the zero-rating of food was estimated at some 1.8% of GDP in the mid-1990s (Dalsgaard, 2000).