[01/16/08] MST Informa #148: For Fair Tax Reform

We begin this year by taking on an important battle for the development of our country around Tax Reform and reform of the current economic policy. The role of taxation is not just apportioning the tax burden among the various sectors of society but is also a basic tool for income distribution and helps to shape the project for the country that we want to build for the future.

At this time, with the defeat of the Provisional Contribution on Financial Movement (CPMF) in the Senate and with the legislation proposed by the federal government, the discussion about the subject is open and various social forces are presenting their proposals.

With the victory in the Senate, the Brazilian Federation of Banks and the Federation of State Industries of São Paulo, by means of the Democrats and of the Social Democratic Party of Brazil propose a complete tax reform and through it, intend to impose other reforms of the State to lessen the number of public employees and reduce the expenditures on social welfare. Facing the pressure from the ruling class, representatives of civil society groups, popular organizations, social movements, intellectuals, students, and clergy launched the manifesto “For a Fair Tax Reform” (read the document below).

We cannot accept that a legitimate demand of the people for reform can contribute to the deepening of the regressive character of the current system, which penalizes the poorest by means of taxes on consumption and benefits the richest and the financial system.

The manifesto has the support of a broad sector of society, which intends to participate in the discussion about taxation, demanding changes that can create conditions for income distribution and for the development of the country, with investments in education, health, job creation and agrarian reform.

The country needs tax reform that promotes taxation in accord with each citizen’s ability to pay. In this sense, we consider three measures indispensable: to modify the income tax and enforce it on large fortunes and on inheritances. The tax on large fortunes, for example, is covered in the Federal Constitution of 1988 and has still not been put into law.

There should be more discussion about changes in taxation and for this reason we invite everyone--social groups, workers’ organizations, intellectuals, economists, students, and clergy-- to contribute their proposals for a people’s project of tax reform.

The people need to take advantage of the opportunity to position themselves and ensure that the result of the discussion corresponds to their needs and concerns. Read the whole statement below.


To the Brazilian people and the federal government, The people who have signed this manifesto--leaders of people’s movements, social movements, intellectuals, and clergy--want to express our views with respect to recent changes that have occurred in the country’s financial system.

1. The rich classes in Brazil got together with their politicians in the Federal Senate and succeeded in defeating the Provisional Contribution on Financial Movement (CPMF), after it had been approved in the Chamber of Deputies.

2. The same Senate approved the continuation of the Disengaging of the Federal Revenue, which allows the federal government to use 20% of all the revenue without specifying ahead of time where it will be spent. So now funds destined for social area can be used without any control for the payment of interest and other non-priority expenses.

3. The CPMF was supposed to penalize the wealthiest and 70% of it came from large corporations and banks. Its collection mechanisms prevented tax evasion and allowed the Federal Revenue Division to check financial movements with the income tax, avoiding frauds and diversion of funds.

4. Now the federal government took the initiative to increase the Tax on Financial Operations and the Social Contribution on Liquid Profit and took up again the imposition of tax on sending profits abroad. This was a correct and fair measure since it affected the wealthiest and especially the banks, the financial system, and foreign corporations.

5. The conservative forces, headed up by the Brazilian Federation of Banks and the Federation of State Industries of São Paulo, got together to condemn these measures through Globo Network and lawmakers of the Democrat and Social Democrat parties. The worst is that they are lying when they say that the people will be affected more by the tax, while they hide the fact that the greatest cost of credit purchases are the taxes on excessive interest, about which they are silent because they approve of them.

6. We demand that the cut in public spending that is demanded by the right, can be made instead in the primary surplus and in the payment of interest on the public debt, which is the greatest expense by far in the Federal Budget in the last ten years. It’s a question of transferring money from the people to benefit the banks and a minority of applicants. In 2007, the federal government paid R$ 160.3 billion in interest payments, four times more than everything that was spent on social areas and corresponding to 6.3% in the Gross National Product.

7. We demand that the federal government maintain and increase its social investments, mainly in health and education as the Constitution requires and not reduce the number and salaries of public employees.

8. Brazil needs real tax reform that can make the taxation system more effective. Today 70% of the taxes are charged on consumption and only 30% on the patrimony. We need to lessen the weight on the population and increase it on wealth and income. To reduce the basic interest rate paid by the government to the banks and scandalous interest rates charged to consumers and businesses. Eliminate the service taxes by which the banks collect R$ 54 billion per year! And end the Kandir Law, that exempts farm and primary exports from the Tax on the Circulation of Merchandise and Service, penalizing the people and public accounts in the states and municipalities.

9. Brazil needs a permanent policy for the distribution of income. For this, it will be necessary to take measures that affect the patrimony, income, and privileges of the very rich minority. We need to increase the opportunities for jobs, education, and income for the majority of the population. To use the resources of the federal and state budgets to broaden public services in an efficient way and let them be free for the whole population, especially services related to health, education, and social security.

10. Facing pressures from the conservative sectors, we should call on the people to make their voices heard. To use the plebiscites and popular consultations so that the people exercise the right to decide about such important subjects.

11. We call on activists, our social base and the whole Brazilian population to make their voices heard and to stay alert for more of these maneuvers that the conservative forces are trying to impose on all of society.

Brazil, January 10, 2008 Abrahão de Oliveira Santos - Psicólogo, professor universitário Adelaide gonçalves - historiadora, universidade federal do ceará Aldany Rezende, do diretório do PDT- MG Aldo Ambrózio. Doutorando em Psicologia Clínica - PUC/SP. Altamiro Borges, jornalista, e membro do CC do PCdoB. Antonio Carlos Spis - direção nacional da CUT (Central Única dos Trabalhadores) Antonio Zanon, do Conselho de Leigos da Arquidiocese de São Paulo Arnaldo Carrilho - Embaixador, Representante junto à Cúpula ASPA (América do Sul-Países Árabes). Aton Fon Filho, da Rede Social de Justiça e Direitos Humanos, São Paulo Babe Lavenère Machado de Menezes Bastos, servidora da Radiobras, Bernardete Gaspar, religiosa, do Conselho de religiosos do Brasil-CRB Beto Almeida, presidente da TV comunitária Cidade Livre, Brasília Bráulio Ribeiro, do Intervozes - Coletivo Brasil de Comunicação Social. Burnier, padre, Goiânia/Goiás Carlos Alberto Duarte, Presidente do Sindicato dos advogados de São Paulo Carlos Eduardo Martins - Professor Ciência Política da UFF Carlos Antonio Coutrim Caridade - Analista de sistema/Psicólogo - DF Carlos Walter Porto-Gonçalves, doutor, geógrafo, professor da UFF CECI JURUA - Pesquisadora associada ao LPP/UERJ. Celi Zulke Taffarel – Profa. da UFBA Celso Woyciechowski, Presidente da CUT-RS Celso Agra , da Coordenação Provisória da Campanha a “Agroenergia é Nossa!” Chico Menezes - Diretor do Ibase Clarisse Castilhos, economista Clovis Vailant, da REMSOL - Rede Matogrossense de Educação e Sócio-economia Solidária e do FBES - Fórum Brasileiro de Economia Solidária Danielle Corrêa Tristão - Publicitária - Rio de Janeiro - RJ Dom. Demétrio Valentini, bispo de Jales e presidente da Cáritas Brasileira. Dom Tomas Balduino, bispo e membro do conselho permanente da CPT nacional. Edson Silva, do Conselho de Leigos da Região Episcopal Ipiranga - CLERI -São Paulo Edson Barrus, artista multimidia Eleuterio F. S. Prado – Prof. da FEA/USP Eliana Magalhães Graça, do Instituto de Estudos Socioeconômicos- INESC, Brasilia Emir Sader, da UERJ e coord. da CLACSO Evilásio Salvador, do Inesc- Brasilia Fernanda Carvalho - coordenadora do Ibase – Rio de janeiro Fernando Morais, jornalista e escritor Fernando Correa Prado, do mestrado estudos latinos- Unam FLÁVIO AGUIAR, JORNALISTA e professor universitário. Francisco Marcos Lopes Cavalcanti - Engenheiro Gaudêncio Frigotto. Professor universitário. Educador. Gentil Corazza - Prof. Universitário – UFRGS Geraldo Marcos Labarrère Nascimento, padre jesuíta, Diretor da Casa da Juventude-Goiania Geter Borges de Sousa, Brasilia Gilberto Maringoni - Jornalista da Fundação Cásper Líbero, São paulo José Heleno Rotta, professor de economia da UEPB Heloísa Fernandes, socióloga, e professora da Escola Nacional Florestan Fernandes, do MST. profa. aposentada da USP Iraê Sassi, da sucursal da Telesur no Brasil, Brasilia Isidoro Revers, da assessoria da CPT nacional. Goiania Ismael Cardoso - Pres. da UBES - UNE União Nacional dos Estudantes Ivana Jinkings – editora, São Paulo Ivo Poletto, assessor de Cáritas e Pastorais Sociais. Ivo Lesbaupin, cientista político, assessor de pastorais sociais João Pedro Stedile, da Coord. Nac. da Via campesina Brasil João Brant, da Intervozes Jonas Duarte, professor da UFPB e da Comissão de Direitos Humanos/UFPB Jonei Reis – Engenheiro Civil – Caxias do Sul Jorge Luís Ferreira Boeira, Gerente De Projetos Jose Antonio Moroni, da Coord. Nacional da ABONG e da campanha nacional por reformas políticas. José Juliano de Carvalho Filho, professor aposentado da FEA/USP e diretor da Abra Jose Luis Guimarães, agrônomo, Belo Horizonte Jose Ruy Correa, Curitiba. PR Leila Jinkings, Jornalista, Centro De Estudos Latino Americanos - Cela, Brasilia Luana Bonone, da executiva nacional da Une Lúcia Stumpf, presidente, pela União Nacional dos Estudantes- UNE. Lúcia Copetti Dalmaso, advogada, Santa Maria, RS Luciane Udovic , pelo Grito Continental dos excluídos. Luis Bassegio, do Grito continental dos Excluídos Luiz Carlos Pinheiro Machado – Presidente do Instituto André Voisin, professor catedrático pela UFGRS e pela UFSC Luiz Antonio C. Barbosa, Servidor Público Federal, RJ Luiz B. L. Orlandi ,Professor universitário. Luiz Carlos Puscas - professor da Universidade Federal do Piauí – UFPI Maria Luiza Lavenère, arquiteta/urbanista, Brasília Marina dos Santos, da coord. Nac do MST Marcelo Crivella, Bispo da Igreja universal e senador. Marcel Gomes, da ONG Repórter Brasil Marcelo Resende, da diretoria da ABRA- Associação brasileira de reforma agrária. Marcos Arruda - do PACS - Instituto Políticas Alternativas para o Cone Sul, Rio de Janeiro, e do Instituto Transnacional, Amsterdam. Marcos Simões dos Santos - policial militar-SP Marcos Zerbielle, do Movimento dos Trabalhadores desempregados- MTD Mauricio de Souza Sabadini - Prof. UFES Maria Helenita Sperotto – ICM, religiosa, assessora da CRB Maria Raimunda Ribeiro da Costa – MJC, religiosa, acompanha área indígena e afrodescetnes da CRB Mauro Castelo Branco de Moura, Professor de Filosofia-UFBA Miguel Leonel dos Santos, da Secretaria de Pós Graduação do Instituto de Estudos da Linguagem - UNICAMP Miltom Viário, da diretoria da confederação nacional dos metalúrgicos, CUT Nalu Faria, da Marcha Mundial das Mulheres, MMM Paulo Sérgio Vaillant - presbítero Plínio de Arruda Sampaio, presidente da ABRA. Pompea Maria Bernasconi- religiosa e diretora do Instituto Sedes Sapientiae, São paulo Raul Vinhas Ribeiro, prof. Universitário, de Campinas, SP Raul Longo, professor, Florianópolis, SC Reinaldo A. Carcanholo - professor da UFES e Vice-Presidente da Sociedade Latino-americana de Economia Política-SEPLA Ricardo Tauile do LEMA Roberto Amaral, cientista político e vice-presidente nacional do PSB Rodrigo Nobile –professor, do Laboratório de Políticas públicas-UERJ. Rodrigo Castelo Branco, pesquisador do Laboratório de Estudos Marxistas Ronald Rocha, sociólogo Belo Horizonte- MG Roseana Ferreira Martins, do Instituto São Paulo de Cidadania Política -São Paulo-SP Sandra Camilo Ede OP- Irmãs Dominicanas de Monteils- GO Sávio Bonés, jornalista, e membro da ABRA-MG Severo Salles, professor universitário, e Pesquisador da UNAM Sidnei Liberal, Médico, Do Pcdob, Df Tania Maria Barros Cavalcanti - Autonoma Telia Negrão ,Secretária Executiva - Rede Feminista de Saúde- RS Temístocles Marcelos Neto. da secretaria nac. de meio ambiente da CUT Nac Virgílio de Mattos - professor universitário da Escola Superior Dom Helder Câmara, em BH/MG. Coordenador do Grupo de Pesquisas Criminalidade, Violência e Direitos Humanos.