In this paper we visit the capital income taxation in Brazil to know whether and to what extent i... more In this paper we visit the capital income taxation in Brazil to know whether and to what extent interest on net equity (INE) has an influence on tax neutrality, i.e., if it helps reducing debt financing advantage over equity. The paper also addresses the persistent Brazilian high interest rates influence on the cost of capital, especially for small and medium enterprises (SME), given that big companies are usually allowed to access low interest rates from BNDES, the National Public Development Bank in Brazil. Based on King and Fullerton methodology for computation of effective tax rates, this paper derives the pre-tax and post-tax rates of return on investment, the tax wedges and the correspondent effective tax rates in Brazil, comparing three sources of finance (debt, retained earnings and new equity) and three types of assets: machinery, buildings and inventories. Our simulations show that INE reduces the cost of capital for new equity by 40% but it cannot offset the debt advantage. On the other hand, very high interest rates as found in Brazil make debt finance the worst option, forcing SME to finance themselves.
In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) tha... more In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) that uses some hypotheses in a New Keynesian approach, roposed by Calvo (1983). We study the impacts and persistence of the Brazilian monetary policy shocks over some variables through the elasticities and relations between macroeconomic variables in real and nominal side of the economy. This occur in a macroeconomic context of nominal rigidities in wages and prices through a Dynamic Stochastic General Equilibrium (DSGE) on variables such as inflation, consumption, output, investment, employment, the marginal product of capital, real wages, interest rate, total supply of money and growth rate of money. As main result, we report persistence of monetary shocks and economic dynamics. The model points out to a necessity of improvements in order to capture the agent’s behavior, trying, as well, bring some contribution to understand these effects on aggregate variables of the economy.
In this paper we calibrate to Brazil a model based on
Christiano, Eichenbaum and Evans (2005) tha... more In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) that uses some hypotheses in a New Keynesian approach, proposed by Calvo (1983). We study the impacts and persistence of the Brazilian monetary policy shocks over some variables through the elasticities and relations between macroeconomic variables in real and nominal side of the economy. This occur in a macroeconomic context of nominal rigidities in wages and prices through a Dynamic Stochastic General Equilibrium (DSGE) on variables such as inflation, consumption, output, investment, employment, the marginal product of capital, real wages, interest rate, total supply of money and growth rate of money. As main result, we report persistence of monetary shocks and economic dynamics. The model points out to a necessity of improvements in order to capture the agent’s behavior, trying, as well, bring some contribution to understand these effects on aggregate variables of the economy.
This paper analyzes the economic impact of the exclusion of the state tax (ICMS) on investment in... more This paper analyzes the economic impact of the exclusion of the state tax (ICMS) on investment in capital goods. Purchases of machinery and equipment in Brazil pay taxes as a consumption good and these taxes are refunded in 48 monthly installments without interest. We have used a general equilibrium model with two types of investment and disaggregation in the public sector. The results suggest a positive impact on the economy, but the loss of states revenue may reach 1.5%, which could be offset by an increase on consumption taxes. The greatest risks for this tax reform are concentrated in the short term, either by the loss of revenue, or because of a transitory drop in consumption and welfare.
This article presents a study that seeks to identify the relevant economic variables in the preva... more This article presents a study that seeks to identify the relevant economic variables in the prevalence of smoking in a group of 37 countries. The chosen methodology was to estimate multiple linear regression using the least square approach. The econometric exercise is performed by gender, seeking to examine whether there are different motivations for cigarette smoking among the adult population of men and women. The results show that although taxation is a common element in the decision of both sexes, the decision to smoke among women is also sensitive to price and other social and cultural factors. These factors were based on the fact that women who live in countries that are part of the Organization for Economic Cooperation and Development reveal a significantly higher prevalence of cigarette consumption. The evidence presented in this study, therefore, reinforces the perception that taxation is in fact a crucial tool in the control of smoking, but in the specific case of women, higher prices and the promotion of greater equality with men, are also important.
Este artigo analisou a tributação do imposto sobre produtos industrializados (IPI) sob a ótica da... more Este artigo analisou a tributação do imposto sobre produtos industrializados (IPI) sob a ótica da incidência tributária. O estudo foi detalhado, envolvendo várias bases de dados. Na produção, a metodologia consistiu em se calcular as alíquotas médias setoriais, enquanto no nível das famílias procedeu-se ao cálculo da distribuição da carga do imposto entre estas. O período analisado foi 2001-2007, 2010 e 2012. Um dos importantes diferenciais deste trabalho foi a aplicação cuidadosa da legislação tributária. Os resultados mostram a forte concentração do IPI em alguns setores como bebidas, fumo e veículos, com tendência de queda nas alíquotas em todo o período, com reduções mais acentuadas a partir de 2010. Em relação às famílias, verificou-se que o impacto do IPI é relativamente baixo e que o imposto é levemente regressivo. Observou-se que as desonerações concedidas a partir de 2009 acentuaram a regressividade do IPI.
Micro and small enterprises (smes) have high representation in the Brazilian economy , presenting... more Micro and small enterprises (smes) have high representation in the Brazilian economy , presenting a number of singularities about taxation. With simples Nacional, Brazil granted a series of tax and administrative simplifications for smes. This article investigates the effects of the introduction of simples Nacional on the formaliza-tion of firms and employment. It was found that the number of companies opting for the regime grew at a rate above that of non-chooser companies. smes inside simples Nacional were also able to generate relatively more jobs than non-choosers, with a growth rate of employment higher for the first group.
The increase in tax expenditures is a trend observed in many countries. In Brazil, the increase i... more The increase in tax expenditures is a trend observed in many countries. In Brazil, the increase in tax expenditures was marked, with an increase of 47% between 2006 and 2011. Based on data from Latin American countries and the OECD, this paper investigates whether countries with high tax expenditures in relation to budget expenditures perform better in the areas of health and education. The results show that the group of Latin American countries spends much more via taxation than the OECD countries, with Brazil showing a relatively low relationship between tax expenditures and total expenditures for health and education. In relation to social indicators, this article suggests that countries that use tax expenditures more intensively have systematically worse social indicators in education and health.
This paper evaluated the impact that opportunity to taxpayer to parcel its tax debts has on its b... more This paper evaluated the impact that opportunity to taxpayer to parcel its tax debts has on its behavior and on tax collection. It was found that the estimated tax gap without this tax benefit is about 30%, but increases by up to four percentage points with the presence of the refinancing programs, as in the case of REFIS. The effects on spontaneity are always negative and last for a long time while taxpayers nurture expectations about future tax installment. On the revenue side, the simulations suggest that the collection in the presence of the installment tax is always less than that which would be obtained if there were no installment throughout the concession phase. Later revenue gains, when the parcels are paid, depend on the default and the taxpayer´s expectation of new installment. We conclude that the mechanism of tax installment is inappropriate as a way to increase revenues and provide the right incentives to taxpayers.
Personal Income Tax – A comparative analysis between Brazil and Latin America This article will f... more Personal Income Tax – A comparative analysis between Brazil and Latin America This article will focus on the comparative study of personal income tax (PIT) in Latin America, with an analysis of the evolution of the tax structure in the region and the revenue collected. It was found that a typical Latin American country collects much less PIT than the average for developed countries, with smaller maximum rates and larger exemption limits. It was also found that the tax rates for Latin American workers with incomes between 67% and 167% of the average wage in each country are well below the average for an OECD country. Regarding Brazil, the taxation of personal income in the country is as expected for a country in the region, with rates and exemption limits consistent with the revenue collected. We conclude that there is ample room for strengthening PIT in Latin America.
The article exposes that, to attend the prevision of demand of tax regularity from the article 20... more The article exposes that, to attend the prevision of demand of tax regularity from the article 205 of the National tributary Code was created the Negative Debt Certificate (CND in Portuguese).Points out that CND is a necessary condition to firms participate of the government shopping system and represents an incentive to firms maintain their tributary duties reasonably in order. In order to evaluate the effects of this mechanism about the fulfilment of tax obligation, it was constructed a simple partial equilibrium model, understanding that, the higher is the tax rate to the sector and/or the lower is the exposure of its revenues to the public sector, the smaller the governments requirements for granting CND will be. Based on the solution of the model with the aid of Brazilian national accounts of 2006, identifies sectors where the government should be more rigid to give the CND, like services to firms, construction, pharmaceutical products and information services. Finally, it notes that, the sectors less affected by CND are appliances companies, cigarettes producers, mining and metallurgy.
Brazilian small-and micro-enterprises (SMEs) have high representation in the Brazilian economy, e... more Brazilian small-and micro-enterprises (SMEs) have high representation in the Brazilian economy, especially in regard to providing employment. This is a significant group with a number of singularities with respect to taxation. Due to the fact that they are small, they may incur greater economic costs than larger companies. Accordingly, many countries have sought to establish specific mechanisms to support SMEs. Brazil's Simples Nacional granted a series of tax benefits and administrative simplifications to small-and micro-enterprises. The revenues collected from the Simples Nacional grew at rates well above that of all other taxes, and was three times higher than the real growth rate of the entire revenue collection. The amount collected per SME increased significantly during the period of the Simples Nacional, corroborating the evidence that there was strong growth among companies opting for the new regime. The growth in revenue collection brought an offsetting increase in tax expenditures, which grew at even higher rates than the increase in revenues.
Taxing tobacco has three main goals: increase revenue, correct externalities and discourage consu... more Taxing tobacco has three main goals: increase revenue, correct externalities and discourage consumption. Different policies may be undertaken which depend on the relevance governments give to each of the three goals. Current analysis presents a detailed review of the literature and explores the topic in its various developments within the economic literature. Demand is relatively inelastic and tax increase tends to raise revenue and discourage consumption. It has been observed that a great section of current literature supports the taxation of cigarettes based on correcting externalities. Conversely, three problems arise when cigarette taxation increases, of which the gravest is a rise in smuggling rates that surely accompany rise in taxation. Other problems are the regressivity of cigarette taxation and its impact on employment. In-depth research and an investigation on the various types of impact that tobacco has on society are essential for a balanced approach to the issue and for choosing the most appropriate solutions.
Current essay is a comparative study on the tax systems of Latin American countries with special ... more Current essay is a comparative study on the tax systems of Latin American countries with special reference to the evolution of revenues, tax rates and revenue composition. The revenues of a typical Latin American country are lower than the average revenues of developed countries, with a great concentration on indirect taxation. A strong correlation between income and GDP per capita and between tax rates and revenues was confirmed, except for Corporate Income Tax. Tax load in Brazil is almost twice the Latin American average and close to that of developed countries. In the case of revenue composition, Brazil is an exception within the region´s standard since it relies less on consumption taxes and more on income taxes. It is worth mentioning that revenues from the Brazilian´s corporate income tax are relatively low within the context of its high tax rates.
The tax expenditures in Brazil showed an increase of 47% between 2006 and 2011. A substantial amo... more The tax expenditures in Brazil showed an increase of 47% between 2006 and 2011. A substantial amount of resources must be continually studied. Thus, within a comparative perspective, we analyzed for a set of countries topics such as the weight of the tax expenditures, their distribution between consumption and income, how the benefit is granted and the purpose of expenditures. It was found, for example, that tax expenditures in proportion of tax revenues are higher in Latin America than in OECD countries. As for Brazil, despite recent growth, it was found that the country still uses relatively little tax expenditures. Also noteworthy is the high share of the expense associated with simplified regimes in the national system, which has no parallel in other countries.
This study examined the distributional aspects related to the principal
tax on consumption of Bra... more This study examined the distributional aspects related to the principal tax on consumption of Brazil, the ICMS, taking the state of Rio de Janeiro as a focus for study. Based on information from individual data on Household Budget Surveys of 2002-2003 and 2008-2009, it was possible to calculate the tax burden of the ICMS by groups of households and to make distributional analysis of tax in the state, by the calculation of Kakwani and Reynolds-Smolensky indices for the two periods. It confirmed the fact that the ICMS on the State of Rio de Janeiro is very regressive with high burden for the low-income families (10.91% of total income) and relatively low for the highest income (3.66% of total income). There was no great difference between the burden of the tax in the period 2002/2003 and 2008/2009, but there has been improvement in income distribution and lower concentration of GST fluminense. As a result, the effects on the regressivity of the tax were ambiguous, with improved index Kakwani index and worsening of the Reynolds-Smolensky.
This article presents a study that seeks to identify the relevant economic variables in the preva... more This article presents a study that seeks to identify the relevant economic variables in the prevalence of smoking among young people of 13 to 15 years for a group of 88 countries. The econometric exercise is performed by gender, trying to identify whether there are different factors affecting cigarette smoking among the young population. The results indicate that although income and education are a common element in the prevalence of smoking in both sexes, boys' decision to smoke was also sensitive to religion and price of a pack of cigarettes. Boys living in countries with majority Muslim population and with high prices of cigarettes present significantly lower prevalence in cigarette consumption.
For various reasons, the Brazilian industry is losing internal and external competitiveness.
Rece... more For various reasons, the Brazilian industry is losing internal and external competitiveness. Recently launched the program “Brasil Maior” includes, among other actions, the change in the incidence of employer pension contributions of some sectors, leaving the incidence on the payroll to focus into the gross revenue (MP 540/2011). This paper has estimated the impact of this change, considering a 20% increase in rates of COFINS to maintain tax neutrality. The results suggest there will not be major macroeconomic consequences, although the industrial sector showed strong growth of output and employment, with small reductions in agriculture and services.
Brazil has a high burden of taxes based on consumption. The industry participation bears two time... more Brazil has a high burden of taxes based on consumption. The industry participation bears two times higher in revenue than in GDP, undermining economic efficiency. We simulated a uniform change in tax rates, resulting in substantial gains for the economy just redistributing tax rates and removing distortions. In terms of distribution, the resulting changes are very intense, with the shift favoring the majority of industrial sectors. This is a promising direction for tax changes with significant economic gains and increasing welfare for all of Brazilian society.
In spite of a disappointed historical, the Brazilian government sent a new tax reform proposal to... more In spite of a disappointed historical, the Brazilian government sent a new tax reform proposal to the National Congress, PEC 233/2008. The proposals unify some of the federal consumption taxes into a federal VAT, simplifies ICMS legislation, reduce investment and social securities rates and rates applied to essential goods. In order to analyze this change, it was constructed a general equilibrium model with 55 firms of the economy. The results suggest a moderate expansion of aggregate output, consumption, employment and investment with a little loss in revenues and a gain in welfare. Also, we have substantial changes in sectorial output, with a tendency of increasing the share of farm and industrial sectors in detriment of services.
In this paper we visit the capital income taxation in Brazil to know whether and to what extent i... more In this paper we visit the capital income taxation in Brazil to know whether and to what extent interest on net equity (INE) has an influence on tax neutrality, i.e., if it helps reducing debt financing advantage over equity. The paper also addresses the persistent Brazilian high interest rates influence on the cost of capital, especially for small and medium enterprises (SME), given that big companies are usually allowed to access low interest rates from BNDES, the National Public Development Bank in Brazil. Based on King and Fullerton methodology for computation of effective tax rates, this paper derives the pre-tax and post-tax rates of return on investment, the tax wedges and the correspondent effective tax rates in Brazil, comparing three sources of finance (debt, retained earnings and new equity) and three types of assets: machinery, buildings and inventories. Our simulations show that INE reduces the cost of capital for new equity by 40% but it cannot offset the debt advantage. On the other hand, very high interest rates as found in Brazil make debt finance the worst option, forcing SME to finance themselves.
In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) tha... more In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) that uses some hypotheses in a New Keynesian approach, roposed by Calvo (1983). We study the impacts and persistence of the Brazilian monetary policy shocks over some variables through the elasticities and relations between macroeconomic variables in real and nominal side of the economy. This occur in a macroeconomic context of nominal rigidities in wages and prices through a Dynamic Stochastic General Equilibrium (DSGE) on variables such as inflation, consumption, output, investment, employment, the marginal product of capital, real wages, interest rate, total supply of money and growth rate of money. As main result, we report persistence of monetary shocks and economic dynamics. The model points out to a necessity of improvements in order to capture the agent’s behavior, trying, as well, bring some contribution to understand these effects on aggregate variables of the economy.
In this paper we calibrate to Brazil a model based on
Christiano, Eichenbaum and Evans (2005) tha... more In this paper we calibrate to Brazil a model based on Christiano, Eichenbaum and Evans (2005) that uses some hypotheses in a New Keynesian approach, proposed by Calvo (1983). We study the impacts and persistence of the Brazilian monetary policy shocks over some variables through the elasticities and relations between macroeconomic variables in real and nominal side of the economy. This occur in a macroeconomic context of nominal rigidities in wages and prices through a Dynamic Stochastic General Equilibrium (DSGE) on variables such as inflation, consumption, output, investment, employment, the marginal product of capital, real wages, interest rate, total supply of money and growth rate of money. As main result, we report persistence of monetary shocks and economic dynamics. The model points out to a necessity of improvements in order to capture the agent’s behavior, trying, as well, bring some contribution to understand these effects on aggregate variables of the economy.
This paper analyzes the economic impact of the exclusion of the state tax (ICMS) on investment in... more This paper analyzes the economic impact of the exclusion of the state tax (ICMS) on investment in capital goods. Purchases of machinery and equipment in Brazil pay taxes as a consumption good and these taxes are refunded in 48 monthly installments without interest. We have used a general equilibrium model with two types of investment and disaggregation in the public sector. The results suggest a positive impact on the economy, but the loss of states revenue may reach 1.5%, which could be offset by an increase on consumption taxes. The greatest risks for this tax reform are concentrated in the short term, either by the loss of revenue, or because of a transitory drop in consumption and welfare.
This article presents a study that seeks to identify the relevant economic variables in the preva... more This article presents a study that seeks to identify the relevant economic variables in the prevalence of smoking in a group of 37 countries. The chosen methodology was to estimate multiple linear regression using the least square approach. The econometric exercise is performed by gender, seeking to examine whether there are different motivations for cigarette smoking among the adult population of men and women. The results show that although taxation is a common element in the decision of both sexes, the decision to smoke among women is also sensitive to price and other social and cultural factors. These factors were based on the fact that women who live in countries that are part of the Organization for Economic Cooperation and Development reveal a significantly higher prevalence of cigarette consumption. The evidence presented in this study, therefore, reinforces the perception that taxation is in fact a crucial tool in the control of smoking, but in the specific case of women, higher prices and the promotion of greater equality with men, are also important.
Este artigo analisou a tributação do imposto sobre produtos industrializados (IPI) sob a ótica da... more Este artigo analisou a tributação do imposto sobre produtos industrializados (IPI) sob a ótica da incidência tributária. O estudo foi detalhado, envolvendo várias bases de dados. Na produção, a metodologia consistiu em se calcular as alíquotas médias setoriais, enquanto no nível das famílias procedeu-se ao cálculo da distribuição da carga do imposto entre estas. O período analisado foi 2001-2007, 2010 e 2012. Um dos importantes diferenciais deste trabalho foi a aplicação cuidadosa da legislação tributária. Os resultados mostram a forte concentração do IPI em alguns setores como bebidas, fumo e veículos, com tendência de queda nas alíquotas em todo o período, com reduções mais acentuadas a partir de 2010. Em relação às famílias, verificou-se que o impacto do IPI é relativamente baixo e que o imposto é levemente regressivo. Observou-se que as desonerações concedidas a partir de 2009 acentuaram a regressividade do IPI.
Micro and small enterprises (smes) have high representation in the Brazilian economy , presenting... more Micro and small enterprises (smes) have high representation in the Brazilian economy , presenting a number of singularities about taxation. With simples Nacional, Brazil granted a series of tax and administrative simplifications for smes. This article investigates the effects of the introduction of simples Nacional on the formaliza-tion of firms and employment. It was found that the number of companies opting for the regime grew at a rate above that of non-chooser companies. smes inside simples Nacional were also able to generate relatively more jobs than non-choosers, with a growth rate of employment higher for the first group.
The increase in tax expenditures is a trend observed in many countries. In Brazil, the increase i... more The increase in tax expenditures is a trend observed in many countries. In Brazil, the increase in tax expenditures was marked, with an increase of 47% between 2006 and 2011. Based on data from Latin American countries and the OECD, this paper investigates whether countries with high tax expenditures in relation to budget expenditures perform better in the areas of health and education. The results show that the group of Latin American countries spends much more via taxation than the OECD countries, with Brazil showing a relatively low relationship between tax expenditures and total expenditures for health and education. In relation to social indicators, this article suggests that countries that use tax expenditures more intensively have systematically worse social indicators in education and health.
This paper evaluated the impact that opportunity to taxpayer to parcel its tax debts has on its b... more This paper evaluated the impact that opportunity to taxpayer to parcel its tax debts has on its behavior and on tax collection. It was found that the estimated tax gap without this tax benefit is about 30%, but increases by up to four percentage points with the presence of the refinancing programs, as in the case of REFIS. The effects on spontaneity are always negative and last for a long time while taxpayers nurture expectations about future tax installment. On the revenue side, the simulations suggest that the collection in the presence of the installment tax is always less than that which would be obtained if there were no installment throughout the concession phase. Later revenue gains, when the parcels are paid, depend on the default and the taxpayer´s expectation of new installment. We conclude that the mechanism of tax installment is inappropriate as a way to increase revenues and provide the right incentives to taxpayers.
Personal Income Tax – A comparative analysis between Brazil and Latin America This article will f... more Personal Income Tax – A comparative analysis between Brazil and Latin America This article will focus on the comparative study of personal income tax (PIT) in Latin America, with an analysis of the evolution of the tax structure in the region and the revenue collected. It was found that a typical Latin American country collects much less PIT than the average for developed countries, with smaller maximum rates and larger exemption limits. It was also found that the tax rates for Latin American workers with incomes between 67% and 167% of the average wage in each country are well below the average for an OECD country. Regarding Brazil, the taxation of personal income in the country is as expected for a country in the region, with rates and exemption limits consistent with the revenue collected. We conclude that there is ample room for strengthening PIT in Latin America.
The article exposes that, to attend the prevision of demand of tax regularity from the article 20... more The article exposes that, to attend the prevision of demand of tax regularity from the article 205 of the National tributary Code was created the Negative Debt Certificate (CND in Portuguese).Points out that CND is a necessary condition to firms participate of the government shopping system and represents an incentive to firms maintain their tributary duties reasonably in order. In order to evaluate the effects of this mechanism about the fulfilment of tax obligation, it was constructed a simple partial equilibrium model, understanding that, the higher is the tax rate to the sector and/or the lower is the exposure of its revenues to the public sector, the smaller the governments requirements for granting CND will be. Based on the solution of the model with the aid of Brazilian national accounts of 2006, identifies sectors where the government should be more rigid to give the CND, like services to firms, construction, pharmaceutical products and information services. Finally, it notes that, the sectors less affected by CND are appliances companies, cigarettes producers, mining and metallurgy.
Brazilian small-and micro-enterprises (SMEs) have high representation in the Brazilian economy, e... more Brazilian small-and micro-enterprises (SMEs) have high representation in the Brazilian economy, especially in regard to providing employment. This is a significant group with a number of singularities with respect to taxation. Due to the fact that they are small, they may incur greater economic costs than larger companies. Accordingly, many countries have sought to establish specific mechanisms to support SMEs. Brazil's Simples Nacional granted a series of tax benefits and administrative simplifications to small-and micro-enterprises. The revenues collected from the Simples Nacional grew at rates well above that of all other taxes, and was three times higher than the real growth rate of the entire revenue collection. The amount collected per SME increased significantly during the period of the Simples Nacional, corroborating the evidence that there was strong growth among companies opting for the new regime. The growth in revenue collection brought an offsetting increase in tax expenditures, which grew at even higher rates than the increase in revenues.
Taxing tobacco has three main goals: increase revenue, correct externalities and discourage consu... more Taxing tobacco has three main goals: increase revenue, correct externalities and discourage consumption. Different policies may be undertaken which depend on the relevance governments give to each of the three goals. Current analysis presents a detailed review of the literature and explores the topic in its various developments within the economic literature. Demand is relatively inelastic and tax increase tends to raise revenue and discourage consumption. It has been observed that a great section of current literature supports the taxation of cigarettes based on correcting externalities. Conversely, three problems arise when cigarette taxation increases, of which the gravest is a rise in smuggling rates that surely accompany rise in taxation. Other problems are the regressivity of cigarette taxation and its impact on employment. In-depth research and an investigation on the various types of impact that tobacco has on society are essential for a balanced approach to the issue and for choosing the most appropriate solutions.
Current essay is a comparative study on the tax systems of Latin American countries with special ... more Current essay is a comparative study on the tax systems of Latin American countries with special reference to the evolution of revenues, tax rates and revenue composition. The revenues of a typical Latin American country are lower than the average revenues of developed countries, with a great concentration on indirect taxation. A strong correlation between income and GDP per capita and between tax rates and revenues was confirmed, except for Corporate Income Tax. Tax load in Brazil is almost twice the Latin American average and close to that of developed countries. In the case of revenue composition, Brazil is an exception within the region´s standard since it relies less on consumption taxes and more on income taxes. It is worth mentioning that revenues from the Brazilian´s corporate income tax are relatively low within the context of its high tax rates.
The tax expenditures in Brazil showed an increase of 47% between 2006 and 2011. A substantial amo... more The tax expenditures in Brazil showed an increase of 47% between 2006 and 2011. A substantial amount of resources must be continually studied. Thus, within a comparative perspective, we analyzed for a set of countries topics such as the weight of the tax expenditures, their distribution between consumption and income, how the benefit is granted and the purpose of expenditures. It was found, for example, that tax expenditures in proportion of tax revenues are higher in Latin America than in OECD countries. As for Brazil, despite recent growth, it was found that the country still uses relatively little tax expenditures. Also noteworthy is the high share of the expense associated with simplified regimes in the national system, which has no parallel in other countries.
This study examined the distributional aspects related to the principal
tax on consumption of Bra... more This study examined the distributional aspects related to the principal tax on consumption of Brazil, the ICMS, taking the state of Rio de Janeiro as a focus for study. Based on information from individual data on Household Budget Surveys of 2002-2003 and 2008-2009, it was possible to calculate the tax burden of the ICMS by groups of households and to make distributional analysis of tax in the state, by the calculation of Kakwani and Reynolds-Smolensky indices for the two periods. It confirmed the fact that the ICMS on the State of Rio de Janeiro is very regressive with high burden for the low-income families (10.91% of total income) and relatively low for the highest income (3.66% of total income). There was no great difference between the burden of the tax in the period 2002/2003 and 2008/2009, but there has been improvement in income distribution and lower concentration of GST fluminense. As a result, the effects on the regressivity of the tax were ambiguous, with improved index Kakwani index and worsening of the Reynolds-Smolensky.
This article presents a study that seeks to identify the relevant economic variables in the preva... more This article presents a study that seeks to identify the relevant economic variables in the prevalence of smoking among young people of 13 to 15 years for a group of 88 countries. The econometric exercise is performed by gender, trying to identify whether there are different factors affecting cigarette smoking among the young population. The results indicate that although income and education are a common element in the prevalence of smoking in both sexes, boys' decision to smoke was also sensitive to religion and price of a pack of cigarettes. Boys living in countries with majority Muslim population and with high prices of cigarettes present significantly lower prevalence in cigarette consumption.
For various reasons, the Brazilian industry is losing internal and external competitiveness.
Rece... more For various reasons, the Brazilian industry is losing internal and external competitiveness. Recently launched the program “Brasil Maior” includes, among other actions, the change in the incidence of employer pension contributions of some sectors, leaving the incidence on the payroll to focus into the gross revenue (MP 540/2011). This paper has estimated the impact of this change, considering a 20% increase in rates of COFINS to maintain tax neutrality. The results suggest there will not be major macroeconomic consequences, although the industrial sector showed strong growth of output and employment, with small reductions in agriculture and services.
Brazil has a high burden of taxes based on consumption. The industry participation bears two time... more Brazil has a high burden of taxes based on consumption. The industry participation bears two times higher in revenue than in GDP, undermining economic efficiency. We simulated a uniform change in tax rates, resulting in substantial gains for the economy just redistributing tax rates and removing distortions. In terms of distribution, the resulting changes are very intense, with the shift favoring the majority of industrial sectors. This is a promising direction for tax changes with significant economic gains and increasing welfare for all of Brazilian society.
In spite of a disappointed historical, the Brazilian government sent a new tax reform proposal to... more In spite of a disappointed historical, the Brazilian government sent a new tax reform proposal to the National Congress, PEC 233/2008. The proposals unify some of the federal consumption taxes into a federal VAT, simplifies ICMS legislation, reduce investment and social securities rates and rates applied to essential goods. In order to analyze this change, it was constructed a general equilibrium model with 55 firms of the economy. The results suggest a moderate expansion of aggregate output, consumption, employment and investment with a little loss in revenues and a gain in welfare. Also, we have substantial changes in sectorial output, with a tendency of increasing the share of farm and industrial sectors in detriment of services.
Uploads
Papers by Nelson Paes
Christiano, Eichenbaum and Evans (2005) that uses
some hypotheses in a New Keynesian approach,
proposed by Calvo (1983). We study the impacts and
persistence of the Brazilian monetary policy shocks over
some variables through the elasticities and relations
between macroeconomic variables in real and nominal
side of the economy. This occur in a macroeconomic
context of nominal rigidities in wages and prices
through a Dynamic Stochastic General Equilibrium
(DSGE) on variables such as inflation, consumption,
output, investment, employment, the marginal product
of capital, real wages, interest rate, total supply of
money and growth rate of money. As main result, we
report persistence of monetary shocks and economic
dynamics. The model points out to a necessity of
improvements in order to capture the agent’s behavior,
trying, as well, bring some contribution to understand
these effects on aggregate variables of the economy.
tax on consumption of Brazil, the ICMS, taking the state of Rio de Janeiro as a focus for study. Based on information from individual data on Household Budget Surveys of 2002-2003 and 2008-2009, it was possible to calculate the tax burden of the ICMS by groups of households and to make distributional analysis of tax in the state, by the
calculation of Kakwani and Reynolds-Smolensky indices for the two periods. It confirmed the fact that the ICMS on the State of Rio de Janeiro is very regressive with high burden for the low-income families (10.91% of total income) and relatively low for the highest income (3.66% of total income). There was no great difference between the
burden of the tax in the period 2002/2003 and 2008/2009, but there has been improvement in income distribution and lower concentration of GST fluminense. As a result, the effects on the regressivity of the tax were ambiguous, with improved index Kakwani index and worsening of the Reynolds-Smolensky.
Recently launched the program “Brasil Maior” includes, among other actions, the
change in the incidence of employer pension contributions of some sectors, leaving
the incidence on the payroll to focus into the gross revenue (MP 540/2011). This paper
has estimated the impact of this change, considering a 20% increase in rates of COFINS
to maintain tax neutrality. The results suggest there will not be major macroeconomic
consequences, although the industrial sector showed strong growth of output and
employment, with small reductions in agriculture and services.
Christiano, Eichenbaum and Evans (2005) that uses
some hypotheses in a New Keynesian approach,
proposed by Calvo (1983). We study the impacts and
persistence of the Brazilian monetary policy shocks over
some variables through the elasticities and relations
between macroeconomic variables in real and nominal
side of the economy. This occur in a macroeconomic
context of nominal rigidities in wages and prices
through a Dynamic Stochastic General Equilibrium
(DSGE) on variables such as inflation, consumption,
output, investment, employment, the marginal product
of capital, real wages, interest rate, total supply of
money and growth rate of money. As main result, we
report persistence of monetary shocks and economic
dynamics. The model points out to a necessity of
improvements in order to capture the agent’s behavior,
trying, as well, bring some contribution to understand
these effects on aggregate variables of the economy.
tax on consumption of Brazil, the ICMS, taking the state of Rio de Janeiro as a focus for study. Based on information from individual data on Household Budget Surveys of 2002-2003 and 2008-2009, it was possible to calculate the tax burden of the ICMS by groups of households and to make distributional analysis of tax in the state, by the
calculation of Kakwani and Reynolds-Smolensky indices for the two periods. It confirmed the fact that the ICMS on the State of Rio de Janeiro is very regressive with high burden for the low-income families (10.91% of total income) and relatively low for the highest income (3.66% of total income). There was no great difference between the
burden of the tax in the period 2002/2003 and 2008/2009, but there has been improvement in income distribution and lower concentration of GST fluminense. As a result, the effects on the regressivity of the tax were ambiguous, with improved index Kakwani index and worsening of the Reynolds-Smolensky.
Recently launched the program “Brasil Maior” includes, among other actions, the
change in the incidence of employer pension contributions of some sectors, leaving
the incidence on the payroll to focus into the gross revenue (MP 540/2011). This paper
has estimated the impact of this change, considering a 20% increase in rates of COFINS
to maintain tax neutrality. The results suggest there will not be major macroeconomic
consequences, although the industrial sector showed strong growth of output and
employment, with small reductions in agriculture and services.