Tax reform for what? and for whom?


In Brazil, there is no mention of depreciation exemption associated with establishing IRPFs for high income groups. Credit: Pexels

Brazilian state reforms, a historically powerful agenda in the political scenario – in part because of the many distortions left to us by the allotted and militarized Portuguese kingdom – have once again become a parliamentary debate since the socio-economic collapse of the Second World War. Dilma. term.

As State Reforms – and here I am framing fiscal, administrative and social security reforms – these legislative innovations, whether they are amendments to the Constitution or complementary and ordinary laws, have as their backdrop of fundamental political decisions.

By this I mean that in these reforms, the changes promoted by Parliament are directly linked to the state model to which society theoretically aspires; And indirectly, to the very model of society in which Brazilian citizens think, the acceptance of the idea of ​​the State, despite the various concepts that exist, as a set of institutions that govern individuals grouped together through a common culture and reasonably responsive. material and spiritual. In other words, it is about the bureaucratic structuring of the nation.

Thus, the recent tax and administrative reform proposals must be analyzed from a structural point of view: what would they really change in the role that the state plays today? How will they change the role that each individual plays as a member of the nation?

Let’s start with tax reform. Taxes are one of the ultimate expressions of a country’s sovereignty and are the seal of obligation between citizen and state – and are essentially the means by which the preservation of the latter is viable. It is now accepted – the Reagan model of the 1980s and 1990s advocated the opposite, based on the flawed theory of optimal taxation – that an appropriate tax policy should be based on the principle of progressivity, responsible for imposing more burdens on those with the highest tax rate. richness; It should be noted that this consensus is not limited to economic assumptions, but rather is accompanied by concepts of justice and moral judgments.

Simply put, the tax system should, for practical and axiological reasons, weigh on those who have the greatest capacity to bear such a burden, without falling into the practice of expropriation. This is the scientific conclusion reached by modern scholars on the subject such as Thomas Piketty.

This has not happened in Brazil, especially from Sarni state, when the number of IRPF teams suddenly dropped from 11 to just three, and the maximum rate from 50% to 25%, according to the excellent article “Tax Progress: The Neglected Agenda”, by Sergio Gobetti and Rodrigo Aurier. .

While any minimalist citizen will recognize it, it should be emphasized that Brazil levies heavy consumption taxes – around 49% of the group, according to OECD data collected in 2015 – have a low consumption tax. personal income – Exempt income below R $ 22,847.00 per year, and charges a maximum of 27.5% for income equal to or above R $ 55,976.00 per year – and virtually tax not property, such as large estates, large inheritances, etc. Everything is contained in the “Final Conclusions” of the master’s thesis of Fábio Ávila de Castro, tax auditor at the Federal Revenue and PhD in economics at UnB.

The result of this scenario: Mr. Joao, a huge businessman and elite official, refills in the same supermarket and refills at the same gas station – thus contributes to the tax authorities in the same way to this regard ; The salaried middle class suffers from the misappropriation of its income, proportionately much more than the misappropriation suffered by those who are well paid, whether by formal contract or by distribution of dividends; And companies, even those that can choose Simples Nacional, are encouraged to pay dividends as quickly as possible, given that the marginal income tax rate is high (IRPJ and CSLL together can reach 34%) and that there is no dividend. and the taxation of dividends, which is strange in the economically developed world.

Finally, as Fabricio Augusto de Oliveira points out, corroborating the same OECD data mentioned above, it turns out that, among the economies concerned, Brazil is the least taxed country on income and assets in proportion. of the overall tax burden – just over 22%, compared to the OECD average of 40%.

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The need for a deep reform of its progressive core seems obvious, doesn’t it? But, in the midst of a colossal socio-political failure, it was neither the agenda of legislative debates, nor the hysterical Sarapatil of the social media underworld.

On the other hand, we have members of Congress concerned only and exclusively with the distribution of income among federal entities – which is why there is no value added tax (VAT) – limiting the discussion to a few details of the already messy tax system or, of course, the budget fires that need to be put out; On the other hand, we have the Krogh claim, which has unreliable odds, denouncing the supposed existence of the barbaric Brazilian fiscal pressure in relation to GDP, especially in relation to continental powers like Latvia, Singapore and Costa Rica. .

Expensive: Brazil does not bear an exorbitant tax burden; In fact, we are in the “B series” for the highest-taxed countries, just below the OECD average and below complex high-population economies like Spain, Russia and Turkey. For example, we charge much lower taxes than in Italy and Portugal. Forget American fetishism, because our model of state and society is different – just take a quick look at the Constitution, whether you like it or not.

There is no mention of depreciation exemption associated with establishing IRPFs for high income groups; There is no mention of a reduction in the IRPJ + CSLL in order to tax dividends, while respecting the exemption margin; No mention of a drastic review of tax breaks, granted on the basis of subjective criteria, without profitable peers that currently cost the federal government R $ 351 billion a year alone, calculates Febrafite; There is no question of simplifying the payment and reimbursement of taxes, aspects which insult Brazil; No mention of strong tax incentives for small and medium-sized enterprises whose objective is to protect technological innovation … There is, at most, the creation or re-imposition of a tax to fill the budgetary void, while keeping intact the existing structure.

Taking up what was said at the beginning of the text, the “reform” of the state, like the tax reform, which maintains a regressive structure, signifies the tendency of Brazilians to a society which crushes the dispossessed and maintains brutal inequalities. No wonder some consider Brazil to be an ancient country.

To conclude this topic on taxation, here is a message for those who seek to orient public policies from the point of view of ghosts, and not from the point of view of the ends pursued by society, that is to say from a perspective teleological: this discourse has more and more less. space out.

It has become absurd, for example, to avoid taxing large multinational companies, even if it is obvious, for fear of “capital flight” to tax havens: the answer to this traditional fraud has been G7 agreement to create a minimum global corporate tax system, which prevents companies from seeking tax havens and thus obliges them to pay more taxes in the countries where they operate.

What if the government violates these standards? Economic sanctions imposed by the United States, United Kingdom, Canada, France, Germany, Italy and Japan, the denationalization of capital has already been recognized as a tragedy in the post-world world. 1970s.

Next Saturday (9), the author continues this article in which he will discuss administrative reform.

This text does not necessarily reflect the opinion of Gazzetta.

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