Comparing the Incidence of Taxes and Social Spending in Brazil and the United States

CEQ Working Paper No. 16

Posted: 18 Apr 2017

See all articles by Sean Higgins

Sean Higgins

Tulane University

Nora Lustig

Tulane University

Whitney Ruble

Tulane University

Timothy M. (Tim) Smeeding

Robert M. La Follette School of Public Affairs, University of Wisconsin - Madison

Multiple version iconThere are 2 versions of this paper

Date Written: November 30, 2013

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

JEL Classification: D31, H22, I38

Suggested Citation

Higgins, Sean and Lustig, Nora Claudia and Ruble, Whitney and Smeeding, Timothy M. (Tim), Comparing the Incidence of Taxes and Social Spending in Brazil and the United States (November 30, 2013). CEQ Working Paper No. 16, Available at SSRN: https://ssrn.com/abstract=2366808

Sean Higgins (Contact Author)

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Nora Claudia Lustig

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Whitney Ruble

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Timothy M. (Tim) Smeeding

Robert M. La Follette School of Public Affairs, University of Wisconsin - Madison ( email )

1180 Observatory Drive
Madison, WI 53706-1393
United States
608-890-1317 (Phone)
608-265-3119 (Fax)

HOME PAGE: http://www.lafollette.wisc.edu/facultystaff/smeeding-timothy.html

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