Taxation as an instrument for reducing inequalities in Brazil

Abstract

This article aims to demonstrate how inequality of income and wealth can be reduced through a more equitable tax system. Taxation based on consumer goods and services increases income inequalities, since the tax burden significantly affects the share of the lower and middle class population. Its regressive effects lead to problems in the distribution of income, as well as access to the basic rights of the Brazilian citizen. Thus, in the first moment, it will be analyzed how the Brazilian tax burden is distributed, so that, later on, the principles of tax capacity and tax escalation can be verified as effective and efficient instruments for the reduction of wealth inequality. In general terms, the article discusses the real possibility of reducing the concentration of wealth and income inequality through taxation, that is, taxing more equity and income, reducing the incidence on consumer goods and services, respecting the economic capacity of the taxpayer.