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Bolsonaro reprimands his chief economic advisor over new taxes controversy

Saturday, September 22nd 2018 - 08:24 UTC
Full article 19 comments

The key economic adviser to Brazil's leading presidential candidate cancelled two campaign events on Friday amid a disagreement with his boss. Market-friendly Paulo Guedes, the main adviser of far-right candidate Jair Bolsonaro, canceled events at the American Chamber of Commerce and broker XP Investimentos in Sao Paulo. Read full article


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  • :o))

    REF: “Guedes told that he planned to reduce income taxes on the wealthy to 20% from the current 27.5%. He also said Brazilians making less than US$ 500/month start paying 20% of income tax“. Bolsonaro said. “A single levy for income tax is a good idea”:

    Robbing from the poor to feed the rich has always been a “Good Idea”!

    Sep 23rd, 2018 - 03:02 pm - Link - Report abuse 0
  • DemonTree

    Yeah, higher taxes on the poor, that's just what Brazil needs. What is wrong with these people?

    Sep 24th, 2018 - 06:49 am - Link - Report abuse 0
  • :o))


    REF: “What is wrong with these people?”:

    What's RIGHT with these people?

    Sep 24th, 2018 - 01:32 pm - Link - Report abuse 0
  • DemonTree

    @ :o))
    Their 'wing' and nothing else.

    Seriously, taxes are too high in Brazil, especially for the level of service citizens get back from the government. But the top rate of income tax is NOT the problem, it's already very low compared to other countries (27.5% in Brazil vs 37% + state taxes in America, higher in most of Europe). If they are going to cut taxes they should cut some of the indirect taxes on consumption that currently generate half of all tax revenue. That would benefit everyone, but the poor most of all. And if they simplified these taxes, companies could probably save money on calculating them, without any losses to the state.

    Instead they want to cut their own taxes, but to maintain the flow of money (for stealing), they'll increase the tax burden on people who are struggling, probably pushing more of them into the informal sector as a side effect.

    Sep 24th, 2018 - 05:50 pm - Link - Report abuse 0
  • :o))


    REF: “taxes are too high in Brazil”:

    From the observation of the past, the present taxes are NOTHING as compared to the ones which are being cooked - independent to the party + independent to the candidate + the fairytales which we hear.

    The need for more [and more] cash is not only incessant but also is greater than ever - to steal more + to recover their losses due to the scandals which are now in the open. Once the elections are over; its first victims will be the poor who'll end up paying more + getting nothing in return. To believe or not to believe; is up to you.

    Sep 25th, 2018 - 09:07 am - Link - Report abuse 0
  • Jack Bauer

    Re Guedes' tax reform, one thing is clear : it’s still pretty vague (or at least what’s been divulged), not to mention all the fake news, which doesn’t help - same as the article published by leftist a paper, saying Bolsonaro used to beat his ex-wife & children... his ex-wife has come forward and posted a video emphatically denying the accusations.

    Getting back to Guedes’ intended reform, a few main points 'seem' to be taking shape :
    On a personal level it suggests one bracket of 20% for income tax, ‘n exempts those who earn up to R$ 5,000/month (gross).
    Given the current salary /revenue structure (source : IBGE, 2017), abt 50% earn on average R$ 1,700 (ceiling R$ 2,900); 40%, average $ 4,700 (ceiling $ 8,800) ; 9% , average $ 13,800 (ceiling $ 27,000); 0,9%, average $ 35,000 (ceiling $ 60,000); 0,1%, average $ 135,000 (ceiling $ 12,000,000), this would translate into 90% becoming exempt, ‘n 10% having the burden reduced from 27.5 to 20 %. The ‘loss’ of revenue (7.5% on top 10%) would be compensated by taxing currently exempt items, such as dividends (already taxed as corporate profit before distribution to individuals) which would pay 20%, and a few other similar rearrangements (still not clear which) would gradually increase the tax burden of the rich, targeting items currently exempt (and which benefit only the top 1%). This would mean more money in the taxpayer's pocket.
    On corporate level, proposes elimination of several Federal/State taxes, to be substituted by a single tax, with similar revenue capacity, with the objective of making the system more transparent, ‘n more difficult to evade. Reducing taxes on consumption has been mentioned, which if true, would greatly benefit the poor. That’s all I’ve got for the moment.
    Strangely, little has been divulged abt other candidates' tax (‘n other) reforms other than the extreme left’s total moratorium, or default on domestic/int’l debt…to maintain the cash flow /populist fantasy long enough to get rich.

    Sep 27th, 2018 - 10:38 pm - Link - Report abuse 0
  • :o))


    REF: “more money in the taxpayer's pocket”:

    It's not ONLY about how much one EARNS using the efficient uses of the resources. It's about:
    - How much one SPENDS [wisely; + Spending-Limits?]
    - How much one SAVES [encouraged with incentives?]
    - How are the debts AVOIDED [How FAST they are paid]

    If there are NO plants for the above mentioned; irrespective to whosoever earns whatsoever $; they are doomed to “remain in red”- forever - not mentioning the unrealistic+exagerated waste of public funds [including (apart from stealing) the absurd salaries + benefits + privileges of the politicians & their innumerable parties]. A Simple Lesson on The (personal+private+public) Economy!

    Sep 28th, 2018 - 10:03 am - Link - Report abuse 0
  • Terence Hill

    “one thing is clear : it’s still pretty vague”
    “Too bad that all the people who know how to run the country are busy driving taxicabs and cutting hair.” ― George Burns

    Sep 29th, 2018 - 03:35 pm - Link - Report abuse 0
  • DemonTree

    You're saying the opposite of the article, it says “Brazilians making less than US$ 500 a month [would] start paying 20 percent of income tax.” That's obviously incompatible with making the first R$5000 tax free, so which is it? And if B intends to cut taxes, is he also going to cut spending, and if so, what? Or is he planning to borrow like Macri and Trump?

    It's pretty appalling that not only is B seemingly trying to keep his economy guy quiet about his plans, but none of the other candidates have revealed theirs, either. How on earth are you supposed to decide who to vote for?

    Sep 29th, 2018 - 05:43 pm - Link - Report abuse 0
  • Jack Bauer

    NB: I did say a lot of fake news was out there...but what I saw on the news /read in VEJA magazine, supports what I wrote, or exemption up to R$ 5,000. Over that, a flat 20% tax. Taxing salaries under US$ 500 (which are currently exempt), is absurd, and sounds fake.

    Currently, up to R$ 1,903 is exempt ; up to $ 2,826, 7,5% tax ; up to $ 3,751, 15% ; up to $ 4664, 22,5 %; over that, 27,5%. B is not trying to hide anything, but the time on TV, in most cases, instead of focusing on proposals, and explaining them (which as I've said, doesn't seems to interest 55% of the people), is about impossible promises 'n attacking adversaries.

    How this apparent tax loss would be compensated, I explained briefly 'n superficially above, and I don't know where he'd cut spending, but hopefully on the government machine...get rid of dead wood, prosecute large debtors to the govt (income 'n other taxes, INSS), fraud and corruption in all govt depts.

    Continuation of “Bolsonaro undergoes surgery...”
    In Brazil, other than politicians (using ideology for convenience), 99% of the left electorate are in the lower classes…those that will usually latch on to any fantastic promise, no matter how impractical or absurd.. so yes, if you were lower class, or an intellectual, or in show biz, you might be a leftist.
    I don’t believe for one second that champagne socialists believe what they preach ; the fact they don’t put their money where their mouths are, confirms it.
    LatAm, socially speaking, is very poor, has low level of education, so the basic conditions to build on a strong foundation do not exist.
    Re the Holocaust, I think that the average German, even the soldiers, were not aware of the death camps and actually did believe Hitler would lead them to glory, until the Reich started to fall apart. Also think that most at the top, who knew what was happening, agreed (with the killing); those who didn’t agree, kept quiet as they were afraid.

    Sep 29th, 2018 - 09:39 pm - Link - Report abuse 0
  • DemonTree

    So Mercopress is fake news? Sounds too good to be true, cutting income taxes for everyone and the indirect taxes too. What's the catch?

    “99% of the left electorate are in the lower classes”

    I do recall something in that survey on political attitudes vs intelligence that I linked to... here it is:

    ”More highly educated people tended to fall into the left category.
    If we do not consider the “without orientation” category, 68% of the sample with university education is left (left and center-left vs. 29% right), but only 40% of the sample with secondary education and 50% with primary education are left orientated.“

    Also, in the latest Datafolha survey, it shows that even among the highest income category, 14% of people surveyed support the PT, the highest amount for any individual party. And considering some of the left in the past were exiled or worse for their beliefs, I'm pretty sure they're sincere. I know my beliefs are, so why would I doubt anyone else's?

    ”I think that the average German, even the soldiers, were not aware of the death camps”

    Maybe. They knew Hitler had taken away all the Jews (their neighbours, colleagues, even friends), and what he said, but perhaps they didn't believe he'd really do it. And the things they did know about - the Nuremberg laws, the ghettos, the slave labour - they were okay with that?

    Sep 29th, 2018 - 10:35 pm - Link - Report abuse 0
  • Jack Bauer

    We have all seen some incorrect reporting by not saying they purposely report fake news, more like quoting other reports without due fact checking.

    Re my statement ““99% of the left electorate are in the lower classes”...ok , I admit, not 99% but the great majority.
    And yr ””More highly educated people tended to fall into the left category”...Don't know how true that is but, given that the highly educated (which supposedly includes intelectuals, champage socialists, show biz peole who depend on their own popularity as well) represent a very small percentage of the what are talking of ? 1% ? hardly enough to sway an election.
    With the leftist orientation prevailing in public universities (the ones the 'poor' are “quota'd” into) it's not surprising they would naturally be in favor of leftist ideas, until they start to understand how things work. As long as they believe in miracles and handouts, they'll support the left.
    Imo, recent datafolha surveys have not been too reliable, as they conflicted with reaches a point you really don't know what the numbers are. Someone is either mistaken, or lying.
    Ok, Germans knew the Jews were being taken away - they could see it happen - but where to, or for what, they knew no more than the actual Jews did before getting to the camps. The Germans were too busy enjoying their newfound pride, and probably already did, or were lead to believe the Jews were their biggest, many probably were Ok with it...dunno if they took much time off to think about it.

    Sep 29th, 2018 - 11:08 pm - Link - Report abuse 0
  • DemonTree

    Show biz people aren't necessarily highly educated, though they might be influential. The association between education and left-wing views would fit with evidence from other countries, but I don't think the Datafolha survey confirms it. That shows support for the PT is highest in the lowest educational group, and lowest in the most educated. However, support for the PDT and PSOL, as well as Partido Novo (whatever that is) seems to come mostly from the highest educated. However, in all groups, over 50% did not support any party.

    Where have Dataholha disagreed with other surveys? Just looking at what has been reported in MP, they seem to match up as well as can be expected.

    Anyway, from what you've said you had very different views to me even as a student, so if the difference was caused by experience it must have been from when you were a child. Ie surely more to do with upbringing than any experiences of the world.

    “The Germans were too busy enjoying their newfound pride”

    Probably. It's easy for governments to get away with doing terrible things if they can just keep people distracted.

    Sep 30th, 2018 - 04:41 pm - Link - Report abuse 0
  • Jack Bauer

    Your right. Most showbiz people aren't very highly educated, but they share the same motivation when it comes down to their popularity. If the majority of their potential fans were right-wing, they'd be cheering Bolsonaro on. One thing you need to get straight : being a moderate socialist in EU, where people are sufficiently educated to know what they are listening to, is very different to a bunch of rather ignorant people, who support 'socialism', without understanding what it entails, and believeing it means something quite different to what the politicians - who plug it - have in mind.

    One polling company came up with a 60% support for Bolsonaro in SP....hard to believe...any of it. Then again, even if the polls are not manipulated (as an ex-employee of IBOPE went public to denounce), the fact that different polls, taken days apart, in different municipalities (and regions), therefore always with different people, of different social classes, seems there is no relation between one and the intentions shoot up and down 2 or 3%, which makes you wonder what the comparative base, between polls, is...I no longer pay much attention to them, as I don't know what to believe, but I suspect all.

    Looks like our initial upbringing may have had something in common (English school, traditions, values), but after that I think our experiences were very different, which I presume, at least partially accounts for our views on politics, on life...

    Were you ever concerned with what might happen to you (not necessarily to do with being a crime victim, but) in the sense that if you did not look out for yourself, no one else would, or could ? that you had no safety-net to fall back on, that you depended on yourself and your decisions alone, in the sense that you could not count on your country to guarantee a minimum standard of living ? The absence of these basic guarantees, with which, if not mistaken, you grew up with, give you a different outlook on life.

    Sep 30th, 2018 - 08:39 pm - Link - Report abuse 0
  • DemonTree

    The impression you've given of Brazil is that many of the poor people - and for all I know some of the richer ones - don't know or care too much about right vs left, or which policies are supposed to be associated with either. They vote based on personality (Lula or Bolsonaro for being more 'folky'), or on what they get out of it (BF or handouts from local oligarchs). So if they support the left it isn't from conviction, and they could just as well switch to the right; they always voted for centre-right governments before Lula.

    SP is supposed to be the most right-wing bit of Brazil, but 60% for B is hard to believe. However, 2-3% would be the usual error rate for such surveys, so maybe changing by that much is not too surprising.

    I'm not sure my school had much in common with yours. It could have been worse, but it was a comprehensive and not particularly good. I gave up trying after the first month, and it was really hard to learn to work later when I did my A levels. And no, I always had a safety net living in Britain. Since I went to university I've always kept some savings for an emergency, and afterwards I mostly looked after myself; when I moved back in with my Mum I gave her money for expenses, but my parents would have helped if I really needed it. And back then I worried I'd never find a decent job, but I knew the state would never let me starve.

    Sep 30th, 2018 - 10:39 pm - Link - Report abuse 0
  • Jack Bauer

    “The impression you've given of Brazil is many of the poor people - 'n for all I know some of the richer ones….” In a way, yes. The poor are lead to believe socialism is the solution, w/o knowing the implications of the distorted view, and use of the term, by politicians. The rich, imo support it for convenience. And those in power, who're willing to go to extremes to reach their objective, are the most dangerous. Look at Jose Dirceu, recently released from prison while he appeals (despite the fact he has 14 more Federal cases of corruption against him), in a recent interview to “El País”, on the possibility of a PT victory being contested : “In Brazil, it’s only a matter of time before the PT takes power; we are going to ‘take power’, which is different to winning an election”….veeery democratic.

    Looks like the runoff will be btwn Bolsonaro 'n Haddad, and it’ll be interesting to see whom the vote intentions, currently with Ciro, Alckmin 'n Marina, and the undecided, go to. It’s very unfortunate for Brazil that these are the only options, but if it means voting against the PT…

    The support for the left from the poor is the Bolsa Familia effect….they’ve been led to believe that without the PT they’ll lose it, despite proof to the contrary.
    The amount of fake news being spread about Bolsonaro is incredible, and many people are either too lazy or incapable to get to the truth.
    SP is the most anti-petista, not necessarily right-wing. In the last election for Mayor of S.Paulo, according to Datafolha/IBOPE, Doria would not reach the 2nd round…he won in the first. (Haddad lost). The ex-employee from IBOPE said that the manipulation occurred during the interviews with voters, by falsifying what they said.

    Am sorry to hear abt yr school, but mine was tops. University as well, one of the the highest ranking in Latin-America. In Brazil, you count on yourself, 'n yourself alone…and when the ‘penny drops’, that's when you’ve got to make up yr mind what you want.

    Oct 01st, 2018 - 07:02 pm - Link - Report abuse 0
  • DemonTree

    “The rich, imo support it for convenience.”

    How so? Socialism is not famous for benefiting the rich, and isn't exactly a winning electoral strategy in Brazil. Lula failed to get elected 3 times, and only won the presidency after abandoning his most radical ideas and moving towards the centre. I suppose it's hard to believe people could honestly prefer those ideas, but everyone's different.

    Interesting interview with Dirceu, and that comment does sound rather ominous. Wonder what he meant exactly? And this: “Many might have the opinion that reforms needed to be made even if it would cost us to fall out of government.” But they had to make a choice and Lula chose the other option - to leave the economy and political system mostly alone and concentrate on social policies to reduce poverty and hunger. Dirceu has a point about Argentina, anyway. They went with the orthodox 'market friendly' option, and it hasn't turned out well.

    “It’s very unfortunate for Brazil that these are the only options”

    Yes, it is. I suppose a lot of people will voting against, rather than for, a candidate. If I was Brazilian I'd vote for Haddad just to keep Bolsonaro out.

    Faking polls isn't going to change the real vote, so what's the point? Just makes the polling company look bad and means people won't trust them in future. Did this ex-employee say what they hoped to achieve?

    Plenty of people go to worse schools than mine. I was bored and miserable, but I could have worked anyway; it's my own fault I didn't put any effort in. A levels were much better, but it was a struggle to learn to work hard at that point, and I didn't do as well as I could have. I was originally accepted into Cambridge, but I got a B on my Chemistry A level so I had to go to my second choice university instead. And university was quite a shock, both for how much harder it was, and how clever everyone is. After being one of the smartest in the class all your life, suddenly you're average, or below. It's humbling.

    Oct 01st, 2018 - 09:47 pm - Link - Report abuse 0
  • Jack Bauer

    “The rich support it for convenience”.....Socialism, “Brazilian-style”, well understood...not what it means in EU. Here, it translates into the politicians and their cronies stealing, as we've seen over the last two decades - according to what has/is being uncovered.
    It became a winning electoral strategy just before (and remained so, after) the PT got in....the 'people' support it because they come to feel 'recognized' by things like the Bolsa Familia, without realizing it is nothing compared to what they could have, under an honest government, that did not resort to fooling the people to get elected, and then continuing the farce, at the expense of the country.
    Dirceu meant that, as far as he and the PT are concerned, they will do whatever it takes to get back into power...not because they are anxious to 'help' the people, but because then they can carry on with their Bolivarian dream. Lula' choice was to guarantee his future, while giving Brazilians a mere pittance, with no perspective other than I ask, where are all those (40 million) he took out of poverty ? it's a joke, but used effectively to convince those who don't expect much more.

    Well, I think I'll have to vote against the PT, for whoever their adversary is.
    Faking polls can change the vote...people who are undecided, or who aren't well informed, will guide themselves by the polls, just because they don't want to vote for a losing candidate. Can't tell you how many times I've heard this.
    The ex-IBOPE surveyor said the intention was to fool people, in the PT's favor.

    I just did O levels in the British system, and the equivalent of A levels in Brazilian high-school. Even though I did relatively well all the way through, including high-school, University for me was an eye-opener. The volume of information you had to digest, expected to know, stressed me out in the beginning....but after a while I got used to the pace. My motivation was to think of the alternative. Didn't thrill me.

    Oct 01st, 2018 - 10:29 pm - Link - Report abuse 0
  • DemonTree

    Sure, politicians could support socialism or any other ideology for their own benefit, but what about ordinary people who don't have anything to gain?

    “it is nothing compared to what they could have, under an honest government”

    Yeah, but when is that going to happen? The fact a program to end hunger was even required shows that previous governments did not give people everything they could have. Brazil is not so poor it couldn't feed everyone.

    Lula made the easier choice, both in terms of pleasing the voters (he was a populist, after all), and politically. A lot of powerful people would be opposed to tax reform, because they would personally lose money if the system was made less regressive. It probably would have made more difference in the long term, but I don't know if they could have done it.

    “I think I'll have to vote against the PT”

    I thought you'd say that. Fortunately I don't have to live with the results, unfortunately the bigots are on the rise in the UK, too.

    “Faking polls can change the vote”

    It could here, there's no run off so people will vote tactically if they think their first choice has no chance. I suppose it's also possible with a run off, but it would be a lot more complicated. Was IBOPE the only company doing polls? If the others were completely different, surely that would give the game away?

    Yeah, the pace at university was a shock. Sometimes it felt like they were firing information at me like one of those tennis ball machines, and most of it was just bouncing off. Maths was especially bad because it's so very different from school, and it didn't help that there were a lot more opportunities for a social life away from home. I don't know why they don't just teach us more in school, it seems silly to go so slowly for years, only to have to cram everything in at the end. Probably it's partly due to dumbing down the exams over the yeas, so schools can say they are getting better results.

    Oct 01st, 2018 - 11:25 pm - Link - Report abuse 0

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