surprised the market on the same day. From an economic point of view, at a time when the international situation is unstable. From a political point of view, it makes sense.
The fiscal package brought measures that won the last presidential elections with Lula and, in doing so, freed Brazil from authoritarianism.
Under the new rules, the minimum wage will continue to grow above inflation (only during the Bolsonaro government it did not), but it will grow more slowly. The salary bonus, currently available to workers who earn up to two minimum wages, will only be paid to those who, after a transition period, earn 1.5 minimum wages.
It was very, very difficult to sell these measures within a government led by the union party.
It was important, therefore, to show Lula’s electorate that the adjustment would not be made solely based on him. The proposal was the way to convey this message.
After all, Congress did not allow Lula to have many rich sacrifices to show for it. If lawmakers had approved the end of business subsidies, as Haddad proposed, the bill would have been closed much easier.
For example: deputies (-SP), Pedro Paulo (PSD-RJ) and Júlio Lopes (PP-RJ) presented a constitutional amendment proposal that would make a much tougher fiscal adjustment than Haddad’s. They are within their rights.
But, on April 23 of this year, the same Kataguiri went to X to celebrate the maintenance of . Perse was created so that entrepreneurs in the events sector would not pay taxes during the pandemic. Yes, the pandemic that ended a few years ago. It costs billions.
In principle, the reform should not affect fiscal adjustment, neither for better nor for worse.
USP’s (Made) suggest that the increase in Income Tax on the rich (in fact, a minimum effective rate for those earning more than R$50,000 per month) should compensate for the loss of revenue with the increase in Tax exemption Income for those earning up to R$5,000.
Haddad said, in the interview in which he announced the plan, that the exemption for those with income of up to R$5,000 will only pass if the tax increase is also passed on to those who earn over R$50,000. But the market fears, with some reason, that Congress will send the government to pasture, approve the exemption, but not the tax increase.
I heard from intelligent people that perhaps it would be better to increase the exemption range less and, at the same time, set a minimum tax rate for the rich even higher than the one proposed by Haddad. I suspect they are right, but Haddad’s proposal is a possible compromise between the president who wants to exempt more on one side and Congress who wants to tax less on the other.
Along with , fiscal adjustment with tax for the rich is one of this column’s favorite banners. The criticisms are legitimate, but Haddad’s program is heading in the right direction. I hope that Congress will only change if it is for the better.
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