According to Study, Model Brazil Subscribes to Is 'Robin Hood Backwards'

12/12/2017 - 10h48

Despite having a taxation regime akin to countries like the United Kingdom, for example, Brazil is one of the least efficient countries when it comes to reducing wealth inequality, benefitting the wealthiest portion of society instead.

That was the conclusion arrived at in a study conducted by the Secretary of Economic Accompaniment (Seae), which is subordinated to the Finance Ministry.

The study, which was published last Friday (the 8th), asserts that the model the country subscribes to is "Robin Hood backwards".

"Instead of taxing the rich and redistributing wealth to the poor, [Brazil] ends up taxing everyone and redistributing it to the wealthier half of the population via monetary transfers, especially in the form of retirement pensions", the study asserted.

According to the document, the country spends approximately 12% of GDP (Gross Domestic Product) on income redistribution programs, among which are retirement pensions (making up 83% of said expenditures) and social programs, such as unemployment and welfare program Bolsa Família.

However, given Brazil's tax burden, the dent that such income redistribution programs have caused in terms of lowering the Gini index - which measures inequality - was a mere 17%.

That is half of the average obtained by OECD countries, where such programs lead to a 34% reduction in terms of inequality.

"Evidently, when it comes to the Brazilian fiscal system, its weaker redistributive impact is not the result of low taxation, rather the form that the country uses the revenues it collects to pay back society", the study asserted.

"Mexico and Chile are the only countries with similar levels of inequality once distribution and revenues have been taken into consideration."

Translated by THOMAS MATHEWSON

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