Source: Senado Federal - Brasília / DF - MAIN NEWSPAPERS - 24/05/2010

José Fucs. With Thiago Cid

Advertiser Eduardo Lopes, 27, worked hard to realize one of his consumer dreams: buying a Corolla 2.0, automatic, zero-kilometer, for R $ 75. A month ago, he traded his Fiat Idea, purchased in 2008, for the Toyota sedan, the best-selling car in the world, at a dealership in Goiânia, where he lives. He entered his Idea, valued at R $ 32 thousand, and paid R $ 43 thousand in cash. To buy a car that costs 15 times his average monthly income, of R $ 5, Lopes used savings of R $ 25, formed over two years based on savings and some extra work. "I could go for a popular car, which is much cheaper, but I like comfort and I think I deserve it," he says.

Compared to the price charged for Corolla in other countries, Lopes paid a small fortune. Of 13 countries surveyed by ÉPOCA, Brazil is where it costs the most (read the box below). In the United States, it is sold for R $ 32.800 (US $ 19 thousand), less than half the price here. In China, for R $ 37.100. In Mexico, for R $ 37.200. In Germany, for R $ 50.700. The average price of the 13 countries is R $ 45.800, 60% of the national price. The difference, of almost R $ 30 thousand, could have served Lopes to make a series of other expenses ”or save more.

The case of Lopes and his Corolla is not isolated. ÉPOCA researched the prices of 16 other products out there. In 12 of them, Brazilian prices were above the international average. A liter of gasoline costs around R $ 2,70 here, compared to an average abroad of R $ 2,25 ”17% less. A 320-liter refrigerator costs about R $ 1.600; abroad, the average is R $ 941. The only products in which prices in Brazil are lower than the international average are a traditional Bic pen, a can of Coca-Cola, a book and a pack of Marlboro (cigarette, surcharge in developed countries because of health damage, it costs 30% less than abroad).

This explains the pleasure with which Brazilian tourists go shopping when traveling abroad. According to data from the United States Department of Tourism, the tourists who spent the most money in the country in 2009 were Brazilians ”US $ 4.800 per capita. They were ahead of Australians and Japanese, known as the largest spenders in the world. According to the gaucho businessman Henri Chazan, 40, president of the Instituto da Liberdade, an entity dedicated to the defense of free initiative and individual rights, it is possible to pay the ticket, of approximately US $ 1.000 (R $ 1.800 ) only with the difference between prices in the United States and Brazil. Chazan estimates that whoever buys six Tommy Hilfiger shirts, four twill pants and two sneakers recently launched on the market can get the ticket practically for free. There, according to him, the shirts cost R $ 45 (US $ 25) in an outlet near Miami. Here, R $ 150. The pants go for R $ 55 (US $ 30) there and for R $ 150 here. The two sneakers cost R $ 300 there and R $ 1.000 here. Add it all up: R $ 1.700 less. Chazan says he and his wife recently bought a Peg-Pérego Pliko P3 baby stroller in Miami for R $ 410 (US $ 229). In Brazil, it costs R $ 1.100, almost triple. “As I am poor, I only buy in the United States”, he jokes. “It is not consumerism. It is cheaper there and the product is better. ”

Last month, commercial manager Juliana Dionisio, 25, from São Paulo, did the same thing. He took a trip with the groom to New York and bought a classic iPod, with 160 GB of memory and a JBL speaker. He spent R $ 765 (US $ 442). In Brazil, he would have paid R $ 1.430. “I am addicted to music and always wanted to have an iPod, but I thought it was expensive,” he says. "When I went to New York, it was the first thing I wanted to buy." The high prices in Brazil lead many people to hire companies abroad to bring imported products. For a fee ranging from $ 150 to $ 350, companies deliver computers, LCD TVs, clothing and toys to the buyer's home. In order not to pay anything at customs, they simulate that the products purchased by tourists are part of a move by Brazilians who lived abroad and decided to return to the country, which is permitted by law. Obviously, the carriers deny that they do these operations for those who are not returning to Brazil after living abroad. Paying more could be offset by earning more. The opposite is true. Brazilians earn, on average, much less than citizens of developed countries. According to sociologist Alberto Carlos Almeida, partner at Instituto Análise and author of the book The head of Brazilians, the average monthly family income in the United States is US $ 4.186 (R $ 7.535). In Brazil, it is around R $ 1.200. Combining the two factors "earn less and pay more", we have the real difference in consumption power: in the USA, a Corolla costs the equivalent of the average family's 4,5-month income. In Brazil, 62,5 months. On a trip to give a lecture in the United States, Almeida says he has done a price survey. He bought a series of everyday products at a drugstore. On the way back, he made the same purchase in Brazil. Here he spent a little less: R $ 106, against the R $ 127 spent there. But his “drugstore basket” represented only 1,7% of the American family's monthly income. Here, 9%. "It's an aberration."

With companies, the situation is no different. Entrepreneur David Neeleman founded JetBlue, one of the leading US aviation companies. In 2008, he founded Azul in Brazil. Almost all the products you bought when you started the business were more expensive in Brazil ”furniture, landlines, cell phones, computers. Neeleman says his plan for Azul was to implement a call center system similar to that of JetBlue, whereby employees work from home, connected to the company's central computer system ”they earn by the hour, have flexible hours and don't spend money on transport or with social clothes to work. Failed. In the USA, the user pays a fee of US $ 35 (R $ 63) for unlimited use of the landline. Here, rates are charged per minute. "The system was not viable." Why such a disparity? What makes the products purchased by Brazilians two, three, even four times more expensive than abroad? There are several explanations. Part of the problem is the appreciation of the real against the dollar in recent years, as a result of the strengthening of the Brazilian economy and the accumulation of hard currency reserves, currently estimated at US $ 250 billion, by the country. When converting with the appreciated real, national prices are higher in dollars. But, even if the real depreciated by 10% or 20%, as several businessmen and economists argue, a large number of products would continue to be much more expensive in Brazil than in other countries. This means that the exchange rate is not the main villain in history. "No country can be competitive in a sustained way by manipulating the exchange rate with the pen," says economist Rodrigo Constantino, author of the book Prisoners of Liberty.

Another important factor, according to experts, is the high taxation of imported products in the country. Despite the opening and the reduction of taxes on imports, promoted in the early 90s by the then president, Fernando Collor, it is still very high in relation to other countries. In the name of protecting national industry, the government ends up restricting competition ”and the consumer pays the bill. "In Brazil, the mercantilist mentality still prevails that importing is bad," says Constantino. "The effect is that we buy a cart for the price of a Ferrari."

Due to the high taxation of imported goods, American businessman Steve Jobs, president and founder of Apple, would have refused an invitation from the Rio de Janeiro government to open the brand's first Brazilian store in the new port area of ​​Rio de Janeiro, as part of the revitalization process of the area. "We can't even export our products (made in the United States) with Brazil's crazy high taxation policy," Jobs reportedly said in replying to the invitation by e-mail, according to a text leaked to journalists. “This makes investing in the country unattractive. Many high-tech companies think so. ” It is also essential to explain the high prices paid by Brazilians for the existence of monopolies or semi-monopolies in different sectors of the country's economy. An exemplary case is that of cement. As it is not possible to import cement, because it is very heavy and could become a stone in the ships that transport them, taking them to the bottom of the sea, domestic producers do not suffer from external competition and may charge more for the product, without fear of losing market . If it were necessary to choose only one explanation for the high prices in Brazil, however, it would be taxes. Even products in the basic basket, such as rice, beans, coffee and French bread, pay taxes, which increase the final price between 15% and 20%.

According to the Brazilian Institute of Tax Planning (IBPT), Brazil is among the countries with the highest taxes in the world: one of its studies showed that, in 2009, Brazilians worked 147 days just to pay taxes. In Spain, 137 days are spent to support the tax authorities. In the USA, 102. In Argentina, 97. According to data from the Impostometer, an electronic calculator developed by the IBPT for the São Paulo Trade Association, Brazilians paid R $ 1,1 trillion in taxes in 2009. This represents 35% of the Domestic Product Gross (GDP), which reflects everything that is produced in the country each year. In no other emerging country, with per capita income equal to or less than Brazil, the weight of taxes (called by the technicians by the hermetic name "tax burden") is so great. In Argentina, it is 22,9%. In India, 17,7%. In China, 17%. In some developed countries, taxes are higher. In Denmark and Sweden, they reach 49,1% of GDP. In France, 44,2%. The difference is that there the population receives quality services in exchange for what they pay to the government. Several countries with a lower tax burden, such as Japan and the United States, are able to guarantee good services for the population. In Brazil, the middle class not only pays high taxes, but also needs to pay a private school, health insurance, sometimes even private security, to supply the state's poor services on its own. "If we make the relationship between what Brazil collects and what it returns to the population in public services, we can say that the country has the highest tax burden in the world", says João Eloi Olenike, president of IBPT.

Against the perception of the problem in the country and abroad, the US Secretary of State, Hillary Clinton, praised the Brazilian tax burden last week. "This is a policy that has been in place for several decades (in Brazil) and is working," said Hillary. His statement generated outrage. "I wanted to see Hillary get sick and go to see the SUS (Unified Health System)," says businessman Paulo Francini, director of the Department of Research and Economic Studies at the Federation of Industries of the State of São Paulo. "What Hillary said is stupid," says economist Paulo Rabello de Castro (read his column). "It is something that does not know the country and does not know what it is talking about." As if it were not high enough, the Brazilian tax burden continues to grow. Although relatively stable in relation to GDP, due to the growth of the economy in recent years, in absolute terms it took a leap ”and this was not the privilege of a single government. From 1986 to 2009, it increased 13 times, while GDP grew eight times. In the Lula government alone, it went from R $ 482,5 billion to R $ 1,1 trillion, most of which went to the Union. In 1993, each Brazilian paid an average of R $ 799 in taxes per year. Today, it pays, on average, R $ 5.929. "This encourages tax evasion, the informality of companies and workers," says Olenike. High taxes are, after all, cruel: since most of them fall on product prices, their effects are much greater for the poorest.

According to a survey by the Institute of Applied Economic Research (Ipea), linked to the federal government, the low-income population, who earn up to two minimum wages per month, has to work 197 days a year just to pay taxes. The richest, with monthly income above 30 minimum wages, 106 days. A study carried out in 2009, in 70 cities, by Instituto Análise, by sociologist Almeida, shows that 67% of people with a family income of up to one minimum wage say they prefer a president who cuts food taxes to buy cheaper food. "It is a system that takes from the poor to give to the rich," says Almeida. "People know that they could consume more, were it not for taxes."

The Brazilian tax system is also very complex. It compromises the competitiveness of national companies in the global market. According to a survey by the consultancy PriceWaterhouse Coopers for the World Bank, Brazil is the country where companies spend the most time managing their tax obligations: 2.600 hours per year, the longest in a list of 183 countries. In Mexico, a direct competitor from Brazil, it is 517 hours. In Argentina, 453. In terms of assessing the ease of paying taxes, Brazil ranks 150th. Carlos Iacia, partner and coordinator of the tax consultancy, says that in large banks, 300 to 400 people have to be directly involved with tax management. "The tax burden is high, but bureaucracy also affects the lives of companies," he says. "In Brazil, they need to use much greater resources in calculating taxes than their competitors from abroad." It seems that reducing taxes is not on the agenda of President Luiz Inácio Lula da Silva. At the end of last year, he declared that Brazilians will have to learn to live with high taxes. "It is silly to think that it is possible to live with low taxes in Brazil," he said. This is the point of greatest dissatisfaction with your government. A survey carried out in March by Ibope for the National Confederation of Industry (CNI) shows that, when it comes to taxes, Lula's approval drops from 83% to 37%. The disapproval rate for this government item is 54% (9% did not answer the question).

Lula's biggest defeat in his administration was also on issues related to taxes. Under pressure from civil society entities, which held demonstrations across the country, Congress overturned the CPMF extension, known as the check tax. Before, in 2005, due to pressure from business associations, the government had to give up approving MP 232 in Congress, which increased the taxes of service providers. If the taxes were lower and the difference (or a good part of it) was passed on to the consumer, more people could buy the same things. There would also be more money left for people to buy other things ”or save. In both cases, they would stimulate the country's development, help to generate more jobs and, in the end, even raise the government's tax collection, by increasing economic activity. “The country's high tax burden prevents growth and contains consumption and savings”, says Olenike, from IBPT.

An example of what can happen with the tax reduction was observed last year, when, in response to the global crisis, the government reduced taxes in the sectors of vehicles, building materials and white goods (refrigerators, stoves and washing machines). The reduction in car taxes led to discounts of around 5% in the final consumer price. Sales exploded and broke a historic record. Last year, more vehicles were sold in Brazil than in the USA: about 3 million units. The same thing happened with white goods and construction materials. “It is the law of supply and demand. With the price drop, demand increases and the market expands ”, says economist Júlio Sérgio Gomes de Almeida, director of the Industrial Development Institute (Iedi) and former director of Economic Policy at the Ministry of Finance. "The collection did not drop because the population bought more." If the tax reduction can have such a positive effect in the country, why doesn't the government adopt it definitively and also in other sectors? The answer is that governments, especially the federal government, spend a lot and need tax money to pay their bills, especially the cost of the administrative machine. “Prices are high because public spending is high. That is the main question. It is necessary to discuss spending, to see where it is inefficient, and to show that one of the benefits of a lower tax burden is cheaper products and broader markets, ”says economist Raul Velloso, a specialist in public finance.

Since 2003, federal government spending on civil servants has more than doubled, from R $ 75 billion to R $ 151,7 billion. The number of executive officers increased by around 85 thousand, from 1,78 million to 1,86 million, most of whom were commissioned. The Social Security deficit grew 12% in 2009 compared to the previous year, to R $ 43,6 billion, mainly due to the generous retirements of the public sector and the increases granted to retirees in recent years. "You have to do something to end this," says Velloso. "It is better to start on the spending side, because no government has the courage to change the tax." With fixed expenses so high, the government has few resources available to invest in infrastructure, such as the construction of roads, ports and airports. “The State is fat and spends a lot on its maintenance”, says economist Antonio Delfim Netto, former Minister of Finance and Agriculture. “The state is getting bloated and not very muscular”, says economist Luiz Gonzaga Beluzzo. One indication that spending on their own costs is excessive is that in recent years, with the exception of the worst phase of the crisis, government revenue has been breaking successive records, but even so, the government has not managed to increase its savings to fund investments. In the first four months of 2010, federal revenue reached R $ 245,8 billion, up 10,9% over the same period in 2009. “The government celebrates when tax collection goes up and the press goes after it,” says political scientist Alexandre Barros, director of Early Warning, a company that assesses political risk and public policies. "We should shout" cheers "when government revenue falls." At the beginning of May, the Minister of Finance, Guido Mantega, announced a cut of R $ 10 billion in expenses foreseen in this year's Budget. Many analysts, however, consider the cut only cosmetic. "This is a joke," says Constantino. "A cut of R $ 10 billion in spending of more than R $ 1 trillion a year is like a family that spends R $ 20 thousand a month saying that it will make a R $ 200 megacorte." In the view of economist Júlio Sérgio Gomes de Almeida, there is scope to promote a progressive reduction of up to 5% of GDP in the tax burden to about 30% of GDP. He says that in 2010, due to the increase in government spending during the crisis, it will be necessary to recompose public accounts. But that, in 2011, with the maintenance of economic growth, the government will be able to promote an immediate reduction of 0,5% of GDP, equivalent to R $ 30 billion or two years of the Bolsa-Família budget. “The tax can fall without the government giving up social programs, PAC (Growth Acceleration Program) and Minha Casa, Minha Vida, which are important for growth and jobs,” he says. "One of the instruments to promote the growth of the economy is to have a well thought out tax reduction policy."