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Title:The impact of Brazil's tax-benefit system on inequality and poverty PDF Logo
Authors:Immervoll, Herwig
Levy, Horacio
Nogueira, José Ricardo
O'Donoghue, Cathal
de Siqueira, Rozane Bezerra
Issue Date:2006
Series/Report no.:IZA Discussion Papers 2114
Abstract:The Brazilian government raises taxes amounting to 35% of GDP and spends more than two thirds of this on social programmes. These shares are in pair with the OECD averages and well in excess of Latin America averages. However, while tax-benefit systems in most OECD countries reduce income disparities very significantly, the Brazilian government has been much less successful in alleviating inequality and poverty. Focussing on taxes and cash transfers, this paper investigates the impact of the government budget on the income distribution in Brazil, and evaluates its efficiency and effectiveness in reducing inequality and poverty. We present BRAHMS, a new tax-benefit microsimulation model for Brazil and illustrate its use by evaluating the impact of policy on economic inequality. It is argued that microsimulation provides a valuable analytical tool for policy makers in emerging and developing countries in particular.
Subjects:Brazil
inequality
poverty
redistribution
microsimulation
JEL:H22
H23
C81
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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