Brazil’s Leaders Tout Austerity (Just Not for Them)

Firefighters shouting slogans during a public servants’ demonstration against austerity measures in Rio de Janeiro. 

SÃO PAULO, Brazil — Brazil’s sickly economy is hemorrhaging thousands of jobs a day, states are scrambling to pay police officers and teachers, and money for subsidized meals is in such short supply that one legislator suggested that the poor could “eat every other day.”

Still, not everyone is suffering. Civil servants in the judicial branch are enjoying a 41 percent raise. Legislators here in São Paulo, Brazil’s largest city, voted to increase their own salaries by more than 26 percent. And Congress, which is preparing to cut pension benefits around the country, is now allowing its members to retire with lifelong pensions after just two years in office.

Brazil is struggling to pull out of its worst economic crisis in decades, and President Michel Temer says the country needs to curb public spending to do so.

Yet it did not help his dismal approval ratings when he hosted a lavish taxpayer-funded banquet to persuade members of Congress to support his budget cuts, with 300 guests eating shrimp and filet mignon.

Outside such rarefied circles, Mr. Temer’s austerity measures are igniting a fierce debate over how the richest and most powerful Brazilians are protecting their wealth and privileges at a time when much of the country is enduring a harrowing economic decline.

“This government talks about austerity for everyone, but of course forces the costs on society’s most vulnerable people,” said Giovana Santos Pereira, 25, a schoolteacher. “It’s ridiculous to the point of being tragic.”

Much of the ire revolves around the centerpiece of Mr. Temer’s austerity drive: his success in persuading the scandal-ridden Congress to impose a cap on federal spending for the next 20 years.

Mr. Temer, who rose to power last year after supporting the impeachment of his predecessor, Dilma Rousseff, says the cap, which would limit the growth in spending to the rate of inflation, is needed to scale back ballooning budget deficits.

Investors have applauded the measure as a turning point for Latin America’s largest economy. But critics are lashing out at the spending cap, saying it could harm the poor for decades to come, especially in areas like education. Philip Alston, the United Nations special rapporteur on extreme poverty and human rights, said the spending cap placed Brazil “in a socially retrogressive category all of its own.”

The debate is all the more caustic because Mr. Temer’s government is resisting calls to raise taxes on wealthy Brazilians, who still enjoy what some economists describe as one of the most generous tax systems for the rich among major economies.

For instance, Brazilians remain exempt from paying any taxes at all on dividends from stock holdings, and they can easily use loopholes to significantly lower taxes on other sources of income.

Economists at the government’s Institute of Applied Economic Research said in a 2016 study that a 15 percent tax on dividends could generate nearly $17 billion in revenue a year, but such proposals have failed to gain traction in a government that has shifted to the right.

“The system is engineered to perpetuate inequality, and Temer is doubling down on bets that Brazil needs Greek-style austerity,” said Pedro Paulo Zahluth Bastos, an economist at the University of Campinas, drawing parallels between Brazil’s multiyear slowdown and Greece’s seemingly interminable economic crisis.

Mr. Temer has not been a popular president, and his approval ratings stand at just 10 percent. But his supporters point out that his leftist predecessor, Ms. Rousseff, sought her own austerity measures before her ouster last year, and that his government has promised to maintain some widely popular antipoverty programs expanded by her party years ago.

Mr. Temer’s government says it is reversing the free-spending ways of previous governments. Brazil’s economy shrank about 4 percent in 2016, when its political class was consumed by infighting over the impeachment. But last month, the finance minister, Henrique Meirelles, claimed that “the recession has ended.”

President Michel Temer of Brazil aims to impose a cap on federal spending for the next 20 years.

Some promising signs of a recovery may be emerging. Foreign investment has increased and, after performing poorly, Brazil’s stock market was one of the best performing in the world in 2016, creating a windfall for the relatively prosperous Brazilians who put money into equities. Mr. Temer is especially bullish, predictingthat the economy will grow 3 percent next year.

But the conditions on the streets of cities around Brazil tell a different story, reflecting devilishly complex structural challenges as millions of Brazilians fall into poverty.

States are facing crippling strikes by public employees over unpaid or inadequate salaries. In the state of Espírito Santo, in southeast Brazil, a police strike last month produced an anarchic week marked by looting and a surge in homicides.

Rio de Janeiro, which hosted the Olympics in August, showcases the complex issues Brazil’s states face. In desperate efforts to slash deficits, the authorities in Rio are shutting down restaurants that provide subsidized meals to the poor, raising taxes on residential electricity service and eliminating welfare programs for the state’s poorest residents.

Yet Rio’s governor, like his counterparts in other Brazilian states, enjoys the use of a private jet for jaunts around the country. And Rio’s judges, already well paid, were pressing ahead with plans to spend millions of dollars hiring new servants for their chambers — until the public got wind of the plan. The ensuing outrage forced the judges to shelve the idea.

At the same time, the state is having trouble finding money to pay for food for the poor. The cost — about 65 cents a meal — was straining the state enough that one state legislator, Pedro Fernandes, suggested taking meals “every other day.”

“I don’t know if what I’m saying is absurd, but it’s something to ponder,” he said.

The ability of elected officials and elite public employees to secure what Brazilians call “super salaries” and outsize benefits for themselves has long been a contentious feature of the country’s political system.

But while Brazilians fume over the issue at a time of national belt-tightening, some officials say they are entitled to special treatment. Brazilian judges, who can easily make about $200,000 a year, have been especially outspoken in demanding raises in a country where roughly half the population scrapes by on a minimum wage of about $4,000.

“There’s no shame whatsoever in this,” Ricardo Lewandowski, a Supreme Court justice, recently told a conference of judges to a round of applause. “Building maintenance fees go up, real estate taxes go up, gasoline goes up, food goes up, and the judge’s salary can’t go up?”

As many poor and middle-class Brazilians absorb the brunt of austerity policies, the protracted economic slowdown and a dizzying array of graft scandals involving the nation’s political leaders are fueling anti-establishment sentiment ahead of presidential elections in 2018, paving the way for figures outside the mainstream to gain momentum.

Alarming some politicians, Jair Bolsonaro, an ultranationalist congressman who excoriates immigrants and defends the torture of drug traffickers, is polling well ahead of traditional contenders like Aécio Neves, a senator from the Brazilian Social Democracy Party.

According to a survey last month by MDA, a Brazilian polling company, just 1 percent of respondents said they would vote for Mr. Temer, reflecting his dismal nationwide standing. It may not even matter, since Mr. Temer’s conviction for violating campaign finance limits could make him ineligible to run. His popularity sustained another blow in recent days after his government spent thousands of dollars to upgrade the president’s luxurious residence, only for Mr. Temer to move his family back to another government-owned palace in the capital, Brasília.

The poll was conducted from Feb. 8 to 11 through interviews with 2,002 people, with a margin of sampling error or plus or minus 2.2 percentage points. It also showed a former president, Luiz Inácio Lula da Silva, as a potential front-runner.

But Mr. da Silva, a leftist who has been condemning Mr. Temer’s austerity measures, could also find himself ineligible to run if he is convicted of graft charges in connection with his ties to construction companies that profited from public contracts.

Given the volatile political landscape and the weak economy, a sense of hopelessness afflicts many Brazilians.

Ana Cristina Silva, 49, lost her job in December at a company in the southern city of Porto Alegre that assembles furniture.

“They just think about themselves,” she said about Mr. Temer’s government, expressing indignation about the pay increases granted to some public employees while much of the country is still reeling. “It’s absurd. Those who don’t need it get a raise.”

Correction: March 22, 2017
An article and a picture caption on March 4 about the privileges and wealth enjoyed by Brazil’s richest and most powerful citizens at a time when much of the country is enduring a harrowing economic decline misidentified the recipients of a raise in the country’s public sector. Civil servants in the judicial branch, not judges, received a 41 percent raise.


Sonegação Fiscal, o Esporte Predileto das Elites

Em época de austeridade fiscal e de reformas impopulares como a da Previdência, o combate à sonegação, que passa de R$ 400 bilhões ao ano no Brasil, é deixado de lado, escreve Tomás Rigoletto Pernías, doutorando em Desenvolvimento Econômico pelo Instituto de Economia da Unicamp, em artigo publicado por Brasil Debate, 25-04-2017: “Sonegação fiscal, o esporte predileto das elites” Veja também em IHU de 26 de abril de 2017.

Eis o artigo.

Em tempos de crescente desigualdade social, desemprego, rebaixamento dos salários, corte nos benefícios sociais e precarização dos serviços públicos, é imperioso frisar que há uma alternativa para a agenda de austeridade imposta pelo governo. Repetir o mantra “não há alternativa”, TINA – “There is no alternative“, também é, por seu turno, uma escolha.

O combate à sonegação fiscal, alternativa pouco lembrada pelos parlamentares quando o assunto concerne à arrecadação fiscal, passa ao largo da agenda governamental. Cumpre lembrar que o recém-eleito presidente da Câmara dos Deputados, Rodrigo Maia, ainda em 2016, procurou inviabilizar a continuidade da CPI do CARF,(Conselho Administrativo de Recursos Fiscais) em clara tentativa de blindar investigações que miravam os grandes empresários e suas relações promíscuas com o Conselho Administrativo de Recursos Fiscais.

Estima-se que, somente em 2013, o valor de impostos sonegados no Brasil tenha atingido R$ 415 bilhões. No ano seguinte, em 2014, o valor sonegado chegou aos R$ 500 bilhões. Tampouco em 2015, com o ex-ministro da fazenda Joaquim Levy – mãos de tesoura – e seu suposto rigor fiscal, o assunto foi tratado de maneira diferente, uma vez que a sonegação ultrapassou os R$ 420 bilhões.

Querido pelo mercado financeiro e bem visto pelos grandes veículos de comunicação, o atual ministro da Fazenda Henrique Meirelles parece ignorar que o combate à sonegação é uma alternativa viável às práticas de austeridade econômica. Em 2016, estimou-se que, novamente, R$ 500 bi foram sonegados.

Entretanto, mesmo após as experiências fracassadas dos países que optaram pelas vias da austeridade depois da crise de 2008, os parlamentares brasileiros aprovaram a PEC 55, que congelou por 20 anos os gastos do governo federal. O descaso relacionado à cobrança de recursos públicos afeta diretamente a previdência – alvo da vez – com somas que atingem R$ 426 bilhões devidos ao INSS por diversas empresas.

Em 2017, a sangria persiste: aproximadamente 158 bilhões sonegados. Neste mesmo ano, o ministro Henrique Meirelles sinaliza uma possível elevação de impostos, ao contrariar os anseios da notória campanha realizada pela FIESP – “não vou pagar o pato”. O motivo: evitar o descumprimento da meta fiscal e contornar a frustração da receita pública. Além disto, observa-se que o sistema tributário brasileiro, que já pune desproporcionalmente a população pobre, é marcado por seu caráter regressivo e injusto – como bem observado pelo colega Juliano Gourlarti em artigo publicado no Brasil Debate.

A sonegação também é um esporte praticado em outros países. Nos EUA, o Internal Revenue Service (agência norte-americana responsável pelo recolhimento dos impostos) estima que o net tax gap médio (diferença que nunca será recuperada entre o valor que deveria ser recolhido e o valor efetivamente recolhido) anual entre 2008-2010 seja de U$406 bilhões. Neste ínterim, Donald Trump procura desmantelar iniciativas como o Obamacare,ao dificultar ainda mais o acesso da população pobre ao sistema de saúde norte-americano, caracterizado por seus custos elevados em comparação com outros sistemas de saúde de países desenvolvidos.

No Reino Unido, em 2013: £119.4 bilhões foram estimados para o tax gap – a soma dos impostos não pagos, impostos evitados e a sonegação. Autoridades oficiais apontam um valor menor, mas ainda significativo. Entrementes, o National Health Service – sistema de saúde público inglês – sofre com os cortes promovidos pela austeridade fiscal, deteriorando a qualidade da oferta de serviços de saúde.

Para além das pessoas físicas que podem contratar serviços de “planejamento tributário” para seus impostos, o que dizer de empresas como a Apple, Google e empresas farmacêuticas, que surfaram em inovações tecnológicas criadas e financiadas pelo Estado – com o dinheiro de impostos dos contribuintes norte-americanos – mas que agora abusam de créditos fiscais/tributários e procuram fugir de suas obrigações fiscais? “Stay hungry, stay foolish” ?!? Mariana Mazzucato, em seu livro O Estado Empreendedor – Desmascarando o Mito do Setor Público Vs. o Setor Privado, explora a questão e demonstra como as grandes empresas que se apoiaram em recursos públicos estão falhando em dar a devida contrapartida à sociedade.

Cabe questionar: a quem interessa a sonegação e a morosidade com a cobrança dos impostos devidos? Ao trabalhador formal, certamente que não, posto que seu imposto de renda é retido na fonte. O escândalo recente “Panamá papers”, ao flagrar graúdos da política e mundo empresarial envolvidos em “contabilidade criativa” e alocação de recursos em paraísos fiscais, prova que a sonegação favorece a classe alta – em evidente detrimento do grosso da população.

É fundamental salientar que há uma alternativa aos descaminhos da austeridade fiscal. Para além de perseguir uma estratégia que priorize o crescimento econômico – sem o qual não haverá recuperação das receitas fiscais – é urgente a criação de um sistema tributário que combata a desigualdade e a sonegação.

A mesma mão que taxa pesadamente os pobres parece acariciar o bolso dos ricos. Essa mão não é invisível.

Afinal de contas, existe (ou não) almoço grátis?