This post is a summary of two articles. The first one with the title above, published at http://www.guardian.co.uk/, on 14 June 2011. Written by Jean-Pierre Langellier. The second published at http://www.thedailybeast.com, on April 14, 2011. With the title of," One Sure Thing: Death to Taxes." Written by Mac Margolis. Maybe these articles help us to understand, why around two millions gone to the streets to protest in more than 400 cities. I think the awareness that the Brazilian people has done a lot for Brazil and its government is increasing, and that now it is time that the government and the politicians do more for Brazil and its people. What the protesters want become clear, they want their tax money wisely spend to promote justice, education, health, development and human rights. In short, a better country.
As every editor knows, a writer should never inflict too many numbers on the reader. It can be downright bore. With this in mind, here is a little collection, gleaned recently from the Brazilian press, which may help to decipher a few local realities. Let is start with 30,000. That is the number of bills pending in Brazil`s congress, the legislative body in Brasilia, composed of 513 deputies and 81 senators. Among these dormant bills are 975 constitutional amendments awaiting ratification. There are also, 2,180 draft laws that have been vetoed by successive presidents. Technically, their fate should have been decided within 30 days of the veto. The federal delegates have mostly abandoned their prerogative of controlling the president`s accounts. No fewer than 12 budgets are still awaiting debate. The Brazilian congress has a singular talent for indecision. It is stifled by bureaucracy, and subject to clientelism. So the executive legislates, not the legislature. The constitution authorises the head of state to take "provisional measures." Itamar Franco, a former president concluded: " We are pathetic legislators." Brasilia has become one of the most expensive cities in the world, with São Paulo and Rio close behind. In Buenos Aires commuters can buy six subway tickets for the price of one in Brasilia. The list of goods and services costing more in Brazil than elsewhere includes clothes, shoes, medicines, toys and restaurants. According to Forbes magazine, which tracks the geographic location of billionaires, São Paulo ranks before Los Angeles and Tokio. Sadly, there are more modest figures too, such as the percentage of illiterate adults. Illiteracy fell from 13.6% to 9.6% of the population between 2000 and 2010, but mainly among those under 20. Progress remains marginal among adults.
Grousing about taxes is as old as Latin America itself. Resentment over the portuguese crown`s levy of 20% of the bounty from colonial gold mines fed a rebellion in Brazil. Two centuries later, little seems to have changed. While government in places like Brazil and Honduras have paid down their debts and deficits, they have often relied on tax hikes to do so rather than cutting spending. Now ordinary citizens and business leaders are striking back. In Brazil, a movement by middle-class taxpayers pushed Congress to strike down a $22 billion-a-year levy on banking transactions last December. The Brazilian rebels are now pressing to require vendors to reveal each of the cascade of levies that inflate the final price of goods and services. Each of these conflicts has its own peculiarities, but they all reflect the fatigue of citizens who see taxes as an excessive and growing burden. In 2006, Latin America`s overall tax burden of 18% of GDP is about 7 points below the global average from just over 12% of GDP in 1990. The tax bite is especially fierce in two of the largest economies. Argentines pay 30% of their earnings to federal, provincial and local taxes. Brazilians must work five months of the year just to honor their debts to the government, which takes 36% of the national wealth in taxes, against 25% in the mid-90s. The São Paulo chamber of commerce, which represent small and medium-size firms, created a "taximeter," that flashes the swelling national tax burden. Latin American companies pay 57% of their profits in taxes, which is higher than the world average of 52%, and far above Asia`s markets, where businesses pay 38%. Latin Americans might be more forgiving of such high taxes if the government are forced to feed returned the favor in public goods. But public investment lags behind that of Asia, and has fallen in the last decade to 5.1% of GDP, compared with 8% in Asia and Africa. "In country after country, roads are crumbling, railways are atrocious and ports are clogged," says Walter Molano, of BCP Securities, an investment bank. He add, "but instead of investing in infrastructure, governments have used their tax boom to increase public employment."
"Freedom is when the people can speak, democracy is when the government listen."
Alastair Farrugia
