“The state does not generate wealth – consider,” said the president of, in a post in which. This is not strictly true. When a public school teaches children to read, or when a policeman holds a bad guy, it generates a huge value for society. But, in fact, the state, except for the profit of some state -owned companies, does not generate monetary revenue. He needs to charge taxes to finance himself.
Brazil charges close to 32% of in taxes. This is a high value for a nation under development. The market, correctly or incorrectly, does not trust the government. He believes he wants to always spend more, that he has no commitment to public accounts, which prefers heterodox measures to combat AE that, when he can, will pass his spending to the private sector. Thus, and wanting to change this negative perception, the government should be especially careful in its economic messages.
At the end of last year, the government put its feet by hand by mixing the announcement of freezing spending with the income tax exemption project. Last Thursday, he did it again:, announced the. In doing so, he feeded the fear that he wants to block the exit of capital from Brazil – it was softened when the government returned back to some points. In addition, he stressed the idea that he bets on increasing revenue to cover the breakthrough of public accounts.
“Executive cannot spend without brake and then pass the steering wheel to hold it,” says Motta. This is the purest truth. But the opposite too: Congress cannot and then exempt itself from guilt. When the Executive tried to correct distortion tax exemptions, such as the Perse or the exemption for 17 economic sectors, which could have relieved the fiscal situation, Congress did not let. If Congress is concerned about Brazilian spending, why not voluntarily cut $ 10 billion from 2025? Or a symbolic R $ 1 billion of the 2026 electoral founder?
The government is experiencing a difficult situation when it comes to tax burden. Net cut of taxes worsens the perception of fiscal responsibility; The increase in taxes indicates that the government is not committed to cutting spending. The best at this moment would not move the total load. Making taxes tighter and more efficient, as the government has done, is a good one. Substantially changing the load is just poking the wound.
Seeking adjustment via collection is, moreover, ineffective. With mandatory expenses that vary according to revenue, tax increases have become automatically spending. There is no escape: the government will need to reduce the expense.
And when we talk about cutting spending, there is no way without pain: the end of supersalaries, end of the automatic floor of and, detachment and, the military. Every cut generates dissatisfaction; It is necessary to choose those with less social impact on the base of the pyramid. The good policy is that capable of choosing what is a priority within the restrictions. Pretending that restrictions do not exist do not help us at all.
Gift Link: Did you like this text? Subscriber can release seven free hits from any link per day. Just click on F Blue below.
