MPIA-10340 Tax reform, income distribution and poverty in Brazil: An applied general equilibrium analysis

Abstract

The main objective of this research is to analyze the effects of changes in the Brazilian indirect taxation system upon personal and regional income distribution in the country, and its importance for the poverty alleviation policies under way, in the short as well as the long run. In Brazil, the 1988 constitution redesigned the national tax system. Since then the tax reform issue has been recurrent in the national debate. This research proposal departs from the idea that due to the historical inequality in personal and household income distribution in Brazil and the enormous number of people still bellow poverty line, any change in the Brazilian tax system should take distributional issues into account. This is a very important issue in the present economic debate in the country, when the new federal government is trying to increase expending in personal transfers as a way of poverty alleviation strategy (the Zero Hunger Program). This kind of strategy must be regarded as a short term one, and must be complemented with more pervasive and market oriented policy changes, as the tax system could be. The general hypothesis to be tested is whether fiscal policy can be an effective instrument to help the poverty alleviation effort currently underway in the country. The analysis will be carried out with the aid of an inter-regional computable general equilibrium (CGE) model of Brazil, linked to a micro-simulation model developed by Ferreira Filho and Horridge (2004), and will be extended in a number of aspects. The methodology proposed guarantees consistency between the two models at use.


Members

Project leader: Joaquim Bento De Souza Ferreira Filho

Project researchers: Sandra Maria Do Prado Lima | Cárliton Vieira dos Santos


Journal publication

No journal publications.


Working Papers

Title Modified Size Comments Recommendations
Tax Reform, Income Distribution and Poverty in Brazil: An Applied General Equilibrium Analysis 2010-03-24 291.4KB 0 0

Policy Briefs

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Tax Reform, Income Distribution and Poverty in Brazil: An Applied General Equilibrium Analysis 2008-08-15 24.99KB 0 0

Final report

Title Modified Size Comments Recommendations
2006-08-22 883 KB 2 1

Proposal

Title Modified Size Comments Recommendations
2005-08-11 191 KB 0 0

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