Bolsonaro talks of taxing the super-rich to maintain Brazil aid for the poorest

President Jair Bolsonaro spoke on Thursday (Sep.1) about taxing profits and dividends of those earning more than R$ 400 thousand (US$80,000) per month as a possible alternative to maintain the Brazil aid of R$600 in 2023.

According to Bolsonaro, the tax proposal of Minister Paulo Guedes’ economic team is 15%, which would be a “very low” tax.

Bolsonaro’s statement was made during his weekly live broadcast on YouTube.

The president also said that the proposal was not included in the budget because there was no room for it.

“Right now, there is no way to find room for it; there is a limit. And that adds up to some tens of billions of reais,” he explained.

The proposal had already been voiced in August by Paulo Guedes. The minister defended the imposition of a 15% tax rate on excess profits over R$ 400 thousand per month. According to him, the measure would reach 60,000 people.

It is expected that the R$600 subsidy will only be paid until December this year.

Bolsonaro and former President Luiz Inácio Lula da Silva (PT), who is leading in the presidential election polls, have already promised to preserve the value of the benefit starting in 2023.

In addition to taxing the super-rich, Bolsonaro also said that one way to preserve the benefit’s value is to vote on a PEC (Proposed Constitutional Amendment) if the emergency due to the war in Ukraine continues.

According to the president, Congress should favor the proposal, while the “leftists speak against it” but will also vote for it.

BRAZIL AID

The increase in the value of Brazil Aid, which was previously R$400, came with the approval of the PEC of kindnesses by the House of Representatives in July this year.

In an election year, the social measures were reevaluated and increased after fuel prices increased. The increase is an attempt by Bolsonaro to improve benefits for the poorest.

The proposed constitutional amendment, nicknamed the “PEC of kindnesses,” recognizes the state of emergency and authorizes the government to launch and expand social programs in an election year. However, the issue could lead to problems in the judiciary.

Key points of the proposal include an urgent increase of R$200 for Auxílio Brasil – a program that replaces Bolsa Família – a R$1,000 voucher for self-employed truck drivers, and an increase in the gasoline voucher to the equivalent of one gas cylinder (R$120) per two months.

The benefits approved less than three months before the election, on Oct. 2, will last until the end of the year.

According to the latest PoderData poll, conducted Aug. 28-30, 2022, Lula continues to lead among the poorest.

Lula has 49% of the vote among those earning up to two minimum wages, compared to 31% for the current president.

There remains a technical balance between those earning between 2 and 5 minimum wages and those earning more than five minimum wages.

With information from Poder360