Abstract
Relative to other countries in Latin America, Brazil has high rates of taxation and large social spending. We estimate the redistributive effect of fiscal policy on income distribution and poverty in Brazil using household survey data that contain detailed information about many labor and nonlabor income sources, direct taxes paid, contributions to the pension system, transfers received, use of public education and health services, and consumption. On the spending side, we find that although Brazil has some well-targeted antipoverty programs, these transfers have relatively low per capita amounts and a large portion of direct transfer beneficiaries are nonpoor. As a result, inequality and poverty reduction are low relative to Brazil's spending. On the tax side, indirect taxes paid by the poor often surpass the direct transfer and indirect subsidy benefits they receive.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 346-367 |
| Number of pages | 22 |
| Journal | Public Finance Review |
| Volume | 42 |
| Issue number | 3 |
| DOIs | |
| State | Published - May 2014 |
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article:The authors received financial support for related research that contributed to the development of this article from the Center for Inter-American Policy and Research, Inter-American Development Bank, Inter-American Dialogue, International Fund for Agricultural Development, Latin American Development Bank, and World Bank. The authors are grateful to Nora Lustig, Francisco Ferreira, Otaviano Canuto, participants of the Commitment to Equity Workshop (hosted by the Inter-American Dialogue and CIPR, November 2011) and the Workshop on Fiscal Incidence in LAC (hosted by the World Bank, May 2012), Nadia von Jacobi, two anonymous referees, and the editor for excellent feedback on earlier versions of this research; to Sergei Soares for providing the code to implement his methodology; to Adam Ratzlaff for research assistance; and to Emily Travis and Scott Odell for copyediting. We are also grateful to the Center for Inter-American Policy and Research, Inter-American Development Bank, Inter-American Dialogue, International Fund for Agricultural Development, Latin American Development Bank, and World Bank for funding for related research that contributed to the development of this article.
Keywords
- Brazil
- fiscal policy
- inequality
- poverty
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
- Public Administration
