The Personal Income Tax in Brazil was established on December 31, 1922.
Actual collection began in 1924.
The tax was introduced to diversify state revenues, which until then relied heavily on customs duties.
A progressive and schedular model (divided by income categories) was adopted, exempting lower-income brackets to focus taxation on the population with the highest purchasing power at the time.
In 1924, the exemption threshold was fixed: only those earning more than 10 contos de réis per year paid taxes.
In today's terms, assuming an exchange rate of 5 reais to the dollar, that would be like earning over R$ 8,500 per month.
The tax rate started at 0.5% and went up to 8% for high earners. Today, it reaches 27.5%.
In 1950, Brazil's total tax burden was between 13% and 15% of GDP, significantly lower than the current ~32% to 33%.
I researched all of this to show that the narrative and push to increasingly tax the rich is nothing new.
If it were going to work, it would have worked by now.
Brazil is not a developed nation (with a very high HDI) because of our ideological choices.
A maximum tax burden of 30%, a serious fight against corruption, and center-right policies are the steps that would naturally lead us toward high development... not overnight, given how extensive the damage has been.
But at least we would be heading in the right direction, and in two generations, Brazil would be recognizably better.
We would become at least a modern-day Canada, with a much larger GDP due to the size of our population."
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