José Ricardo Nogueira

The Impact of Brazil's Tax-Benefit System on Inequality and Poverty

The Brazilian government raises taxes amounting to 35% of GDP and spends more than two thirds of this on social programmes. These shares are in pair with the OECD averages and well in excess of Latin America averages. However, while tax-benefit systems in most OECD countries reduce income disparities very significantly, the Brazilian government has been much less successful in alleviating inequality and poverty. Focussing on taxes and cash transfers, this paper investigates the impact of the government budget on the income distribution in Brazil, and evaluates its efficiency and effectiveness in reducing inequality and poverty. We present BRAHMS, a new tax-benefit microsimulation model for Brazil and illustrate its use by evaluating the impact of policy on economic inequality. It is argued that microsimulation provides a valuable analytical tool for policy makers in emerging and developing countries in particular.

A Incidência Final dos Impostos Indiretos no Brasil: Efeitos da Tributação de Insumos

Devido a multiplicidade de impostos e aliquotas e a incidencia sobre insumos, o efeito final do sistema brasileiro de impostos indiretos sobre os precos esta longe de ser transparente. Usando um metodo que incorpora os efeitos multissetoriais dos impostos indiretos, este artigo calcula, para o Brasil, a incidencia efetiva destes impostos sobre os diferentes componentes da demanda final. Os resultados mostram que atividades para as quais existe uma politica explicita de desoneracao de impostos sao de fato significativamente tributadas, indicando que a incidencia final pode ser bem diversa daquela defendida pelos formuladores de politicas tributarias ou desejada pela sociedade.

Simulating Brazils tax-benefit system using Brahms, the Brazilian household microsimulation model

Apesar de arrecadar um montante de tributos equivalente a cerca de 37% do PIB e gastar mais da metade desta receita em programas sociais, o governo brasileiro nao tem sido capaz de aliviar significativamente o problema da desigualdade e da pobreza. Alguns estudos tem mostrado evidencia de que esta situacao e, em grande parte, devida a inadequada focalizacao dos gastos publicos. Entretanto, o impacto distributivo do financiamento desses gastos tem recebido menos atencao. O presente trabalho investiga o impacto conjunto dos tributos e transferencias monetarias governamentais sobre a distribuicao de renda entre os domicilios brasileiros e compara o Brasil com alguns outros paises com carga tributaria semelhante.

Taxation, Inequality, and the Illusion of the Social Contract in Brazil

Brazil combines high inequality and high tax yield as percentage of the GDP. This situation contradicts the predictions of two central theories of taxation and democratic politics. The first theory predicts that, within a democratic context, high levels of income inequality should lead governments to carry out significant redistribution. The second theory sees the government’s ability to raise tax revenue as dependent on a social contract between the state and its citizens, and predicts a negative relationship between taxation and social polarization. In this paper, we propose that the theory of fiscal illusion (Puviani 1 903; Buchanan 1967) can account for this double puzzle Brazil presents us. We argue that, by heavily relying on the exploitation of fiscal illusion, the Brazilian state has been able to mobilize a huge amount of tax resources without the need of a broad social contract that could lead to more redistribution, effective public services, and growth-enhancing policies. The paper provides some evidence that supports our argument. First, using recent household surveys and a tax-benefit microssimulation model, we show that redistribution by the state is small, and that even the poorest 20% of the households are, on average, net contributors to the fiscal system.Second, we describe some main features of the Brazilian tax system that tend to induce voters-taxpayers to underestimate the cost of government’ activities. For instance, in the past, the inflation tax and debt financing were major instruments and, nowadays, complex and cascading indirect taxation plays a major role as a source of illusion. We then emphasize that the relationship between inequality and redistribution cannot be predicted without an understanding of the way inequality influences state financing: the institutions of taxation matters.

A CARGA TRIBUTÁRIA EFETIVA SOBRE O TRABALHO NO BRASIL: NÍVEL, DISTRIBUIÇÃO E COMPOSIÇÃO

This paper investigates the level, distribution and structure of the tax burden on labor in Brazil, showing how many and what types of workers are affected by different levels of taxation. The results show a significant variation in the level and composition of the tax burden among subgroups of workers. For example, the effective tax rate for a worker earning the legal minimum wage and having three or more children is little more than a third of the tax rate for a worker with earnings above thirty minimum wages. The study also shows that, compared to the European Union and OCDE countries, the Brazilian tax wedge on labor is one of the lowest, particularly for higher wages.

O custo marginal social da tributação indireta no Brasil: identificando direções de reforma

Este artigo aplica o metodo desenvolvido por Ahmad & Stern (1984) para calcular o custo marginal social da tributacao para 27 grupos de bens, usando microdados da POF 2002-2003 e elasticidades-preco da demanda baseadas no Sistema Quase Ideal de Demanda (AIDS). As estimativas sao apresentadas para diferentes hipoteses sobre o grau de aversao da sociedade a desigualdade. Os resultados indicam que alguns bens sao fortes candidatos a reducao de tributacao (e outros, ao aumento de tributacao) tanto por consideracoes distributivas quanto de eficiencia. Porem, de forma geral, ha um forte conflito entre os objetivos de equidade e de eficiencia na reforma da tributacao indireta no Brasil.

Características distributivas e impacto de reformas tributárias sobre o bem-estar das famílias no Brasil

The present work estimates the distributive characteristic of goods and services consumed by Brazilian families as reported in POF2008-09 and uses this information to design alternative indirect tax reform proposals. The impact ofthe reforms on welfare is assessed using the equivalent variation concept and the quadratic almost ideal demand system (QUAIDS). The results show that the three consumption goods with the highest distributive characteristics are domestic fuel, tobacco and basic food, and the three consumption goods with the lowest distributive characteristics are automotive fuel, alcoholic beverages and private transport. All reforms based on the distributive characteristics are progressive, with the most progressive ofthem resulting in a welfare gain to the poorest families equivalent to a 8.2% rise in their consumption, and in a welfare loss to the richest families equivalent to a 5.6% decrease in their consumption.

Is there any Difference in Well-being between American and Brazilian College Students?

According to large surveys with tourist and travel agencies abroad, Brazil has an image associated with joyfulness and seems to be eternally celebrating. Such surveys indicate that happiness is one of the main characteristic of the Brazilian people.1 The Brazilian Tourism Institute (EMBRATUR) names the Brazilian Northeast State Bahia as the land of happiness. After a visit to Brazil, moviemaker Fellini once said that he was convinced that Brazilians were the happiest people in the World. Brazilian anthropologist, Darcy Ribeiro (1996), argued that Brazilians have a unique joyful-ness for life that is hard to find in other parts of the world.2 In this article we study happiness in Brazil from a comparative perspective. We study whether there are any differences in the overall reported life satisfaction among Brazilian and American college students. We use two samples collected through direct surveys with college students at Purdue University in Indiana, United States, and at Universidade Federal de Pernambuco (UFPE), Brazil.3 We asked about their overall life satisfaction (see the two questionnaires in the appendix). We think that it is important to compare two similar groups in two different societies. On the one hand, they share similar aspirations and preoccupations, such as their academic grades, future career, and romance, to any college student around the world. On the other hand, socioeconomic conditions and social norms are very different in the two societies.