Fiscal Equity: Distributional Impacts of Taxation and Social Spending in Brazil

IPC Working Paper No. 115

58 Pages Posted: 11 Jan 2015

See all articles by Fernando Gaiger Silveira

Fernando Gaiger Silveira

Institute of Applied Economic Research (IPEA)

Fernando Rezende

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE)

José Afonso

Getulio Vargas Foundation (FGV) - Brazilian Institute of Economics

Jhonatan Ferreira

SAS Institute Inc.

Date Written: October 1, 2013

Abstract

In 2009, the Brazilian public sector — actually, the Union: including states, municipalities and the Federal District — collected approximately 35 per cent of the gross domestic product (GDP) in taxes, and ‘gave back’ around 15 per cent in pension and health benefits to the private sector and a substantially lower amount through subsidies. Approximately one third of this amount is used to pay the pensions of public servants. Consumption expenditures reached nearly 20 per cent of GDP, while expenditure on investment — ‘gross fixed capital’ — and the net interest payments to holders of government bonds accounted for 2.3 per cent and 5.4 per cent, respectively. Also of note in public budgets are the expenditures on education and health policies, which accounted for about 9 per cent of GDP in 2009.

The analysis presented in this article shows the importance of assessing the distributional impacts on household income of taxes, social security and assistance transfers and the public provision of goods and services in education and health. That is the purpose of this study: to evaluate how primary household income changes through the intervention of social security and assistance, fiscal and public health and education policies.

Keywords: Public economics, Fiscal Policy

Suggested Citation

Silveira, Fernando Gaiger and Rezende, Fernando and Afonso, José and Ferreira, Jhonatan, Fiscal Equity: Distributional Impacts of Taxation and Social Spending in Brazil (October 1, 2013). IPC Working Paper No. 115. Available at SSRN: https://ssrn.com/abstract=2547949

Fernando Gaiger Silveira

Institute of Applied Economic Research (IPEA) ( email )

Av. Pres. Antonio Carlos , 51 - 17 andar
Rio de Janeiro, RJ, 20020-010
Brazil

Fernando Rezende

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE) ( email )

Brazil

José Afonso (Contact Author)

Getulio Vargas Foundation (FGV) - Brazilian Institute of Economics ( email )

Centro de Polticas Sociais - CPS
Rio de Janeiro 22253-900
Brazil

Jhonatan Ferreira

SAS Institute Inc. ( email )

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