Brazil economists call for resumption of growth with social inclusion
Brazilian economists have published a letter advocating a resumption of economic growth that preserves social inclusion advancements from recent years and improves income distribution and calling for changes in the tax system.
“Brazil needs to resume growth as soon as possible, but not at all costs,” read a statement released by the COFECON-CORECON federal and regional economics regulatory boards released Saturday (Sept. 3).
According to the economists' letter, the reason for the “overwhelming poverty” in Brazil is “extreme income concentration”. The authors mentioned the tax system as an underlying cause of income concentration.
Tax system
“The growing social demands cannot be addressed without changing our archaic tax system that focuses 72% of tax collection on consumption (56%) and income from work (16%), leaving taxes on capital interest and wealth with only 28%, which goes against the global norm,” the document read.
The statement pointed out that by approving the 1988 Constitution, Brazil chose a welfare and public education system, and that “inherently requires an ever-growing amount of resources”. The economists criticized the perception that public spending is the culprit of the economic crisis.
“It is this [welfare] system that prevents severe declines in GDP and employment levels from creating hordes of destitutes and leading to supermarket looting and rioting in city outskirts,” the document read.
The economists have also criticized proposals from President Michel Temer's administration to amend the constitution to limit the annual increase in public spending to the inflation rate from the previous year.
Translated by Mayra Borges
Fonte: Brazil economists call for resumption of growth with social inclusion
