In the last week, I wrote my research abstract. The text has to be simple and a summary of all the research. I have been rewriting several times, so any help would be appreciated. Thanks in advance!

We study how revenue-dependent taxation can lead to output and welfare effects, as well as impacts on firm informality. First, we modify an equilibrium entrepreneurial choice model to incorporate a revenue-dependent tax regime. We then bring our model to the data in order to assess the effects of the Brazilian Simples tax regime, a simplified tax scheme that combines nine different taxes into a lower-rate (vis-à-vis the standard tax regime) revenue tax. Firms are eligible to Simples if their revenues do not exceed a yearly threshold, meaning that, inasmuch as Simples may reduce firm informality (one of its original goals), it may also hinder firm growth, as some firms have an incentive to withhold production and pay lower taxes. We structurally estimate the parameters of our model using a combination of survey and administrative data on Brazilian firms. This approach allows us to analyze the effects of Simples on the size and productivity distribution of firms – as well as the effects of counterfactual policies such as reduction in tax burden gap between formal firms. We find that the Simples tax regime increases the average output and productivity of the Brazilian economy, and also encourages the formalization of informal firms. This comes at the cost of reduced tax collection, as well as a reduction of output from formal firms that withhold production to pay lower taxes. Finally, we find that welfare can be further improved by introducing a tax scheme with a lower burden gap.