Case Study: Tax reform, income distribution and poverty in Brazil: an applied general equilibrium analysis

Joaquim de Souza Ferreira Filho, Carliton V dos Santos () and Sandra M do Prado Lima ()
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Carliton V dos Santos: Universidade Estadual do Oeste do Paraná UNIOESTE. Colegiado de Economia. R. Universitária, 2069; Jd. Universitário. CEP: 85819-110. Cascavel PR, Brazil
Sandra M do Prado Lima: Universidade Estadual de Londrina UEL. Universidade Estadual de Londrina. Departamento de Economia. Rodovia Celso Garcia Cid. Pr 445 Km 380. Campus Universitário. Cx. Postal 6001. CEP 86051-990. Londrina PR, Brazil

International Journal of Microsimulation, 2010, vol. 3, issue 1, 114-117

Abstract: This case study considers two frequently advocated approaches to reducing indirect taxation in Brazil: reduction in taxes on food; reduction in taxes on intermediate inputs to agriculture. To asses the effects of both on income distribution poverty levels, a bottom-up general equilibrium model of Brazil (TERM-BR) is linked to a microsimulation model. It is shown that one of the favoured policies is more poverty reducing, the other more income inequality reducing. Perhaps even more importantly, the analysis demonstrates that the two policies lead to very different outcomes in terms of inter-state transfers; a major political barrier to reform in a federal state.

Keywords: CGE; inidrect tax; food; agriculture; regional; Brazil (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ijm:journl:v:3:y:2010:i:1:p:114-117

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