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The Impact of Brazil´s Tax-Benefit System on Inequality and Poverty

Author

Listed:
  • Herwig Immervoll

    (European Centre for Social Welfare Policy and Research, Vienna and OECD, Paris)

  • Horacio Levy

    (Universitat Autònoma de Barcelona)

  • José Ricardo Nogueira

    (Universidade Federal de Pernambuco, Recife)

  • Cathal O´Donoghue

    (National University of Ireland and IZA, Bonn)

  • Rozane Bezerra de Siqueira

    (Universidade Federal de Pernambuco)

Abstract

The Brazilian government raises an amount of taxes that represents 35% of GDP and spends more than two-thirds of this on social programmes. These shares are in pair with the OECD averages and well in excess of Latin America averages. However, while the tax-benefit system in OECD countries notably reduces market inequality, in Brazil the government has not been able to significantly alleviate inequality and poverty. This paper investigates the impact of the government budget, particularly taxes and cash transfers, on income distribution in Brazil, and evaluates its efficiency and effectiveness in reducing inequality and poverty. The analysis also illustrates how microsimulation is a useful and powerful method for evaluating the impact of policy on income distribution.

Suggested Citation

  • Herwig Immervoll & Horacio Levy & José Ricardo Nogueira & Cathal O´Donoghue & Rozane Bezerra de Siqueira, 2005. "The Impact of Brazil´s Tax-Benefit System on Inequality and Poverty," Ibero America Institute for Econ. Research (IAI) Discussion Papers 117, Ibero-America Institute for Economic Research.
  • Handle: RePEc:got:iaidps:117
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    More about this item

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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