The distributive impact of income taxes in Brazil

"Income inequality has been one of Brazil's most significant socioeconomic characteristics throughout its history. Although there has been a significant reduction since the end of the 1990s, its persistence and magnitude are still internationally notorious. This One Pager seeks to synthesi...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Rodrigo Cardoso Fernandes, Campolina, Bernardo, Fernando Gaiger Silveira
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2018
Subjects
Taxes
Brazil
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Summary:"Income inequality has been one of Brazil's most significant socioeconomic characteristics throughout its history. Although there has been a significant reduction since the end of the 1990s, its persistence and magnitude are still internationally notorious. This One Pager seeks to synthesise the results of a study relating Brazilian inequality with its tax system, whose regressive nature must be overcome to enable a more egalitarian society. The Brazilian tax system places undue emphasis on indirect taxes?which comprise over 51 per cent of its gross tax burden. The countrys insistence on taxes on goods and services (indirect taxes)?to the detriment of taxes on income and property (direct taxes)?undermines the real application of the principle of contributive capacity, resulting in a regressive system whereby families with less income proportionally finance a larger share of the State". (...)