An irrational tax burden


Author: Ives Gandra da Silva Martins

Source: Folha de S. Paulo, 13/11/2007

PAULO RABELLO de Castro, in an econometric study for the magazine
October's “Financial” (pages 14 to 17), demonstrates that the increase in the
in Brazil has represented a constant loss of GDP growth in
percentage every day higher. So, in the so-called “crowding out” effect
(expulsion), for each 1% increase in load, the increase in the loss value is
6,7%, considering the current GDP, which means that, in increases of 1%, 2%, 3%,
4% and 5%, the loss would be 6,7%, 13,4%, 20%, 26,7%, and 33,4% per year,

The study impresses, above all in the statistical annex and in the decomposition
logarithmic growth of the gross product of Brazil, for demonstrating that, having
the country has a tax burden higher than that of the BRIC countries, it grows,
to the evidence, less than these countries. It therefore proves that the tax levy
serves the interest of those in power, but, to the evidence, it is not the
public interest or society.

Not without reason, Brazil fell, in the list of competitiveness among nations, to
the 72nd position, and of our direct competitors, China boasts the 34th
position, India, 48th, and Russia, 58th. Worse than that: Chile boasts the
26th, Puerto Rico, 36th, Mexico, 52nd, and even Colombia appears in
better position than Brazil (69th), despite its indisputable problems
with drug trafficking and the FARC parallel government.

It should also be remembered that the increase in the tax burden last year to
this also corresponded to the fall from 66th to 72nd, in clear
demonstration that, although the tax levy was not the only factor
loss of national competitiveness, it was, without a doubt, an element
relevant side by side with sclerotic bureaucracy, the level of corruption detected by
international bodies in administrative and regulatory structures
excessive inflation through legislative inflation.

This real legislative dehydration shames the overwhelming majority of
law professors, obliged to live with it and explain it to their
students. Unfortunately, we live, in this incoherent, tiring and convenient region,
the lack of a public administration, which does not privilege the careers of the State
nor does it create a stimulating hierarchical evolution in the public sector.

In light of these negative data, the government insists on the extension of the CPMF,
despite raising this year, according to government projections, 60
billion reais more than projected in the 2007 Budget, that is,
a third more than what you intend to receive from the CPMF in 2008!

In this context, in which the PAC (Growth Acceleration Program) does not
takes off, the load increases and the president allows the hiring of more
servers, aiming to inflate their archaic and inoperative structures, it is
The revelation made by Folha a few months ago is frightening: of the 100% of
“Friends of the king” - those hired without a competition for positions and
administration - 47% are union members, that is, they have little specialization in
public administration, except that of defending the interests of the category, and
19% are members of the PT.

In view of this reality, the evidence, the tax burden does not tend to fall, and the
economy, despite the brigadier sky of the world “performance”, is condemned to
grow less than that of the whole world, taking serious risks when the clouds
that appear on the economic horizon turn into storms.
I am
convinced that if governments did not consider power to be of use
people and the people as a mere producer of taxes and decided to bet on
society, we would certainly be ahead of China, India and Russia in
growth rates, as we have better conditions, under all conditions
aspects, than those countries.

We have everything - and thanks to that, the country still grows, thanks to the work of
society; we just don't have rulers with statesmen's view, which is why in
all international indices Brazil remains in a lower position. In time:
we are ahead of Burundi and Haiti.

IVES GANDRA DA SILVA MARTINS, 72, tax lawyer, professor
emeritus of Mackenzie University, UniFMU, School of Command and State
Major of the Army and of the Superior School of War, is president of the Council
Fecomercio Superior Law and Extension Center