Authorities debt is an efficient answer for Brazil | Vinicius Lummertz

Alan Morici

Vinicius Lummertz, former Minister of Tourism

In an try and slash costs of prime gasoline and diesel, which has impacted inflation and election polls, Congress handed and President Jair Bolsonaro handed invoice that limits the ICMS to gas, fuel, electrical energy, telecommunications, and public transportation by classifying these items. and companies are important.

For the patron, the measure means the hope of paying much less on the time of provide, whereas for states and municipalities (which share) it represents the danger of losses of greater than R$100 billion per yr. complete, 25%). São Paulo governor Rodrigo Garcia, who remains to be within the dialogue section of the invoice, introduced within the Federal Senate a logical and sensible answer to decrease gas costs whereas not penalizing states and municipalities that might now endure severe losses. in the price of important companies resembling schooling, well being, public security, public housing, social growth and concrete infrastructure.

Rodrigo Garcia’s proposal – which might be expanded to incorporate the federation’s different 26 models – was for the Federal Authorities to droop São Paulo’s debt to the Union for 2 years in order that the State might scale back the ICMS on gasoline and 0 taxation on gasoline. fuels. “I take advantage of this cash from the mortgage to reset the ICMS on diesel, ethanol and cooking fuel and reduce down on gasoline. No want for PEC [Proposta de Emenda Constitucional] For this,” the governor declared.

The governor says it will likely be sooner and fairer. Rodrigo Garcia reminded that São Paulo “has at all times and nonetheless helps Brazil: In 2021, our State despatched R$716 billion in taxes to Brazil. However the return to São Paulo was solely R$25 billion [3,5%]”. Including to this stark distinction is spending that’s inefficient and poorly managed by the Union – that’s, it collects an excessive amount of, generates little return, and nonetheless loses billions by making dangerous investments.

Different States are penalized by the Union on this relationship between restoration and extradition. After São Paulo comes my hometown Santa Catarina, which despatched BRL 97 billion to Brasília in 2021 however solely has BRL 7 billion (7.6%) to put money into all key sectors and infrastructure. Subsequent comes Rio de Janeiro, with revenues of BRL 329 billion and BRL 25 billion (7.6%) – however Rio has the benefit of oil royalties. Then comes Paraná with R$91 billion and in return 10 billion (11.1%); Espirito Santo, R$30 billion and R$4 billion (13.8%); and Amazonas with R$20 billion and R$3 billion (14.5%).

An enormous and needy nation like Brazil wants extra funding. In follow, nevertheless, the focus of sources collected in Brasília, with 58% of all remaining taxes within the Union and solely 24% within the States and 18% in municipalities, creates a state of affairs of maximum inequality. With the 1988 Structure, well being, schooling and infrastructure have been dropped at the “tip”, and after it entered into power, the wages and contributions directed to the Union have been created and elevated.
Governor Rodrigo Garcia reminded us that regardless of all this useful resource depth in Brasília, our nation has spent greater than it has collected in not less than 10 years. To get an concept of ​​what meaning, Brazilian public spending elevated from 29.5% of GDP between 2008 and 2019, or from 29.5% of all wealth produced by Brazil mixed to 41%. Then got here the pandemic and explosion. A spending ceiling of R$524 billion in 2020 alone.

And there is extra: This public deficit resulted in a calculated debt service (curiosity) of R$600 to 700 billion in 2021 – Conflicts exist between the federal government numbers and the numbers of institutes and universities – The Union solely returned R$197 to America, 4 billion, or about 30% of that quantity for Federation models to cowl key areas and infrastructure. Because of this, in accordance with Fundação Getúlio Vargas, public funding in Brazil reached historic lows as in 1947 and is anticipated to say no additional. In spite of everything, methods to make investments if 95% of the Union’s price range is dedicated to mounted and obligatory expenditures, resembling Social Safety and public servants’ funds?

This case wants to alter – and creatively compensate the billionaire’s losses with ICMS assortment, as in Governor Rodrigo Garcia’s proposed answer to droop São Paulo’s debt for 2 years. I’ll go additional: in an emergency, one thing must be performed on this path with the debt of the States. At the moment the Union is the “usurer” of the Federation models, as if the states and municipalities have been “extraterrestrial” entities.

Authorities money owed will be utilized immediately to every of the well being, schooling, safety, infrastructure and different precedence sectors. The Federal Authorities and the States can be “companions” in these companies and investments that might profit 212 million Brazilians in 5,570 municipalities. Precedence works needs to be chosen by mutual settlement to extend the effectivity of the economic system, thereby strengthening the economic system itself and increasing future collections.

These are the issues we should always convey to society in these elections – not vulgarity, fact, faux information, or arguments concerning the “much less dangerous” future.

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