Comparing the incidence of taxes and social spending in Brazil and the United States

Sean Higgins (), Nora Lustig, Whitney Ruble and Timothy Smeeding
Additional contact information
Whitney Ruble: Department of Economics, Tulane University, USA
Timothy Smeeding: University of Wisconsin at Madison, USA

No 316, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: We perform the first comprehensive fiscal incidence analyses in Brazil and the US, including direct cash and food transfers, targeted housing and heating subsidies, public spending on education and health, and personal income, payroll, corporate income, property, and expenditure taxes. In both countries, primary spending is close to 40 percent of GDP. The US achieves higher redistribution through direct taxes and transfers, primarily due to underutilization of the personal income tax in Brazil and the fact that Brazil’s highly progressive cash and food transfer programs are small while larger transfer programs are less progressive. However, when health and non-tertiary education spending are added to income using the government cost approach, the two countries achieve similar levels of redistribution. This result may be a reflection of better-off households in Brazil opting out of public services due to quality concerns rather than a result of government effort to make spending more equitable.

Keywords: Inequality; fiscal policy; taxation; social spending. (search for similar items in EconPapers)
JEL-codes: D31 H22 I38 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013-11
New Economics Papers: this item is included in nep-lam, nep-pbe and nep-pub
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Citations: View citations in EconPapers (32)

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Related works:
Journal Article: Comparing the Incidence of Taxes and Social Spending in Brazil and the United States (2016)
Journal Article: Comparing the Incidence of Taxes and Social Spending in Brazil and the United States (2016)
Working Paper: Comparing the incidence of taxes and social spending in Brazil and the United States (2013)
Working Paper: Comparing the Incidence of Taxes and Social Spending in Brazil and the United States (2013)
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