We have seen in recent weeks the escalation of conflicts between Congress and Executive Power.
In response to the government’s decision to raise – a tax whose original purpose is regulatory and non -collection – as a way to compensate for the imbalances and unpredictability of its fiscal policy; in what was immediately followed by.
The severity of the initiative can be evaluated by its rarity: since 1992, the legislature has not formally nullified a presidential decree. Even considering all the rules of the Executive Power, only eight legislative decree projects were approved in both homes between 2005 and 2025, in a universe of over 2,500 presented.
The government reacted by asking the Supreme Court a.
Minister Alexandre de Moraes, rapporteur of the case, – both the executive and that of the legislature – and called the parties to a conciliation hearing on the 15th.
The inability to dialogue between the nation’s main power instances is all that it does not need a country where there is so much to make to ensure stability and economic growth. Even worse – very worse – is the attempt to transform the, resurrecting the strategy of “us against them”, which has produced nothing but division and resentment.
I close here this description attempt from the current political picture, certain that there are much more empowered people than me to analyze and extract conclusions. My goal was just to paint a background for the idea I want to defend.
I often think of how the mistakes made by others comfort us. In addition to allowing us to feel superior, they still provide relief of conscience to our own evil. In my life experience-which already begins to become long-I don’t remember ever finding someone who assumed themselves as dishonest.
Those who corrupt, let themselves be corrupted, evade, or simply drive by the shoulder always have some justification that plaque their guilt. And if all explanations fail, there is always one last and unbeatable remains: “But others do it, no?”
Thus, we who have so many repairs to the way as executive, legislative and even judiciary lead the business of the nation, we can find comfort in this position of “collectors” and leave the reflection on the points in which we can be failing to our commitment to the country (and with ourselves).
I believe there is an opportunity to be consequent with our discourse of valuing tax justice by supporting the approval of PL 1.087/2025 ,. The PL basically foresees the following:
- Total exemption to go to those who receive up to R $ 5,000 per month;
- Partial tax rates for those who earn between R $ 5,000 and R $ 7,000 per month;
- Establishment of a minimum rate of IR of 10% for those with income over R $ 100 thousand per month (R $ 1.2 million per year). This minimum rate is linearly reduced to zero for those who earn up to $ 50,000 per month; So it would be, for example, of 5% for those who earn $ 75,000 per month.
The third point aims to compensate for the loss of collection resulting from the first two. Thus, it is estimated that the approval of the decree is neutral from the point of view of the portion of GDP represented by the tax burden.
Already before the intensification of the conflict between executive and legislature, political analysts provided that Congress could approve the exemptions, but there would be great difficulties in approving the minimum rate of 10%.
I do not intend to discuss whether the granting of the reductions provided for in points 1 and 2 – that weigh their undeniable positive effects on consumption – is the best possible use for tax resources, as this is not the most important aspect here. But I think it is important to say that I consider the mechanism that establishes the minimum rate of 10% for income exceeding R $ 1.2 million annually.
The calculation mechanism is simple: the individual taxpayer adds all his income of salaries, rents, interest, profits and dividends received throughout the year and – if over R $ 600 thousand – compares the total tax payable and collected according to the rules in force today, with the minimum aliquot (which varies linearly between 0 and 10% for values between R $ 600 thousand and R $ 1.2 million year).
If the total tax under the current rules is less than the minimum rate, the taxpayer must pay the necessary supplementary tax to reach the established minimum percentage.
If the total tax under the current rules is higher than the minimum rate, no additional payment will be due by the taxpayer. Naturally, the existence of this rate will be indifferent, not only for those whose income is less than R $ 600 thousand per year, but also, for example, for all wage earners, who at these income levels are already subject to an IR of 27.5%, far higher than the floor established by the new law.
It seems difficult to justify that someone with earnings of over $ 100,000 per month can pay less than 10% IR, when all taxes on the income you are subject to. Thus I do not see defensible reason for us to fail to support the approval of this norm by the legislature.
I believe that, in approving it, Congress will give an unmistakable demonstration of its ability to align with the goals of the executive, when they are reasonable, equitable and aim at balance and economic growth. And we would all have to gain from this gesture.
Gift Link: Did you like this text? Subscriber can release seven free hits from any link per day. Just click on F Blue below.
