Abstract
ABSTRACT able This paper presents a critical analysis of income and profit taxes in Brazil, arguing that measures adopted in the 1980s and 1990s, as a result of mainstream recommendations, hindered the redistributive role of taxes. An examination of tax data reveals a high degree of top income concentration, low tax progressivity and violations of the principles of horizontal and vertical equity. The main reason for these distortions is the complete tax exemption of dividends, a benefit that is very rarely seen in developed countries. We propose a return to a progressivity-focused tax reform plan, a theme that has returned as a focus of debates with (Piketty, 2014).
Highlights
Brazil’s tax burden is one of the highest among developing countries – around 33 per cent of Gross Domestic Product (GDP) – which is close to the average of the countries comprising the Organisation for Economic Co-operation and Development (OECD)
Since the early days of the Brazilian republic, the idea of its creation following European moulds was repeatedly championed by such personalities as Rui Barbosa, the first Minister of Finance of the republican regime, as a mechanism to reduce government deficits and, at the same time, inequalities in general
Among the 34 OECD countries, which include developed and some developing economies that embrace the principles of representative democracy and free market economy, only Estonia, Mexico, Greece and Slovakia have strayed from this model by only taxing profit once
Summary
Resumo: Este texto faz uma análise crítica da tributação da renda e do lucro no Brasil, mostrando como medidas adotadas nas décadas de 1980 e 1990, por recomendação do mainstream, restringiram o papel redistributivo do imposto de renda. Propõe-se recuperar uma agenda de reforma tributária focada na progressividade, tema que voltou ao debate com Piketty (2014). Palavras-Chave: Imposto de renda; Progressividade; Reforma tributária abstract: able This paper presents a critical analysis of income and profit taxes in Brazil, arguing that measures adopted in the 1980s and 1990s, as a result of mainstream recommendations, hindered the redistributive role of taxes. An examination of tax data reveals a high degree of top income concentration, low tax progressivity and violations of the principles of horizontal and vertical equity. We propose a return to a progressivity-focused tax reform plan, a theme that has returned as a focus of debates with Piketty (2014).
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