CIPR | Center For Inter-American Policy & Research

Tulane University

CEQ Working Paper No 16: Comparing The Incidence Of Taxes And Social Spending In Brazil And The United States


Comparing The Incidence Of Taxes And Social Spending In Brazil And The United States
Working Paper No. 16

A working document by:
Nora Lustig
Tulane University
Sean Higgins
Tulane University
Whitney Ruble
Tulane University
Timothy Smeeding
University of Wisconsin at Madison

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.

Access the working document here:
Updated November 2013
CEQ Working Paper No 16: Comparing The Incidence Of Taxes And Social Spending In Brazil And The United States

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