Let's compare two lifestyles in Brazil. First, we have Paulinha from Natal, Brazil who is a domestic worker with nine children. Every month she receives 500 Reais from the Brazilian government via the welfare program called Bolsa Família. Also every month Paulinha receives a pay check of 500 Reais for cleaning homes five days per week at 8 hours per day. Her total monthly income is 1,000 Reais. Since the value added tax in Brazil is about 50%, the 500 Reais given to Paulina by the government is essentially returned to the government since Paulinha consumes everything that she earns. Nevertheless, for the 500 Reais (from the government) Paulina votes for the political party that provides her with the financial support, namely Lula's PT party (since they are currently in power).
Second, we have Edward who is a scientist in Natal, Brazil. Every month he and his family receives 10,000 Reais from a bank investment plus 5,000 Reais from the Brazilian federal government in the form of a science fellowship. For this fellowship Edward does not work any more hours per week than Paulinha. The tax rate on Edward's investment is 15% and the tax rate on Edward's monthly salary is 0%. After taxes Edward gets to keep 13,500 Reais per month. Although Edward cannot vote (for he is a foreigner) his wife, a Brazilian, votes against Lula's PT party since unlike Paulinha, his wife knows that PT is corrupt (sadly, much like all the other parties in Brazil).
Now for some more questions: Is the socialist system in Brazil rigged against Paulinha? And if so, could this be the reason the Gini Coefficient in Brazil is still greater than 0.5?
Dear Edward,
Your example is highly interesting but the data you provided are not sufficient.
I would like to know the contribution of the family of Paulinha and that of the family of Edward to the maintaining of welfare, order, human and cultural heritage and future of Brazil.
I couldn't agree with you more. That is why they call value added tax a regressive tax. Many including the rich don't understand this. We had a friend at our home this weekend making vacuous arguments as to why all the welfare for the poor (which she believes she is paying for) should be cut off. What she does not understand is that the Federal University that her child will be attending will be partially payed for by the 'poor' tax payers of Brazil. For poor children they will not have the skill-set to enter the Federal University system for often their 'public school' teachers do not even show up to work which causes the more affluent folks to put their children into private school.
Focusing in the inequality question is important to pay attention to other income sources as the higher minimum wage in the last decades (actually, in the History), low unemployment percentage, among other sources. These sources are economic and structural and Bolsa Família (the welfare program) look to very poor families. On the other hand, Poor population is highly injured by the higher taxes as Edward pointed. My point is to bring more arguments to the discussion. I believe that B.F. is important, but not the main reason for the decrease in GINI Index.
The education question is pointed for a Brazilian sociologist (Jessé de Souza), for him, the economic development of some part of the population don't make their a new "middle class", based on Bourdieu studies.
(PS: Sorry for the poor English)
Why Brazil is not South Korea?
"
Nageswara Rao Posinasetti · 70.96 · 19.12 · University of Northern Iowa
In my opinion the main forces that drive the South Korean growth is
1. Export led economic growth with trade liberalization
2. Korean workforce – very hardworking
3. Efficient governance of Korean economy
4. Learning lessons from past mistakes or failures
"
Brazil fails on all four points! Edward J Tehovnik.
Sent from my iPad
In my recent book (attached below), I compared 143 countries with each other. High income inequality is typical for Latin America and Brazil is one of the worst.
Corruption is globally correlated with national income per capita. Brazil’s corruption was in 2007 around the average for South American countries. During the last two decades, we can observe a small reduction in Brazil’s income inequality (www.wider.unu.edu/research/Database/en_GB/database) as well as a minor reduction of corruption in Brazil (www.transparency.org/).
Book Missing a Decent Living for Everyone: Success and Failure in...
Impeachment a good sign for Brazil's democracy, expert says!
The Brazilian Senate has voted to suspend President Dilma Rouseff and start the impeachment trial, which speaks for its institutional flexibility...
"The ‘official’ reason for impeaching Rousseff is she violated public finance regulations. More specifically, the opposition argues that she misused money from state banks to hide the government budget deficit and pay for popular social programs before the presidential election in 2014. The real reason, however, may be found in the typical politicking. It has been argued that legislators implicated in the corruption investigation known as Operation Car Wash are behind the impeachment drive. They may have thought that removing unpopular Rousseff would be dramatic enough to divert public attention from the investigation into them..."
https://www.researchgate.net/blog/post/impeachment-a-good-sign-for-brazils-democracy-expert-says
Dear Ljubomir,
Indeed, your prediction may be realized if the Brazilian judiciary fails to be independent of the other branches of government. This will be an additional test for Brazilian democracy.
Ed Tehovnik