this post was submitted on 07 Jul 2025
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[–] burlemarx@lemmygrad.ml 9 points 22 hours ago* (last edited 22 hours ago) (1 children)

The "tax the rich" thingy is actually a neoliberal policy to increase government tax revenue by taxing some financial operations related to exchange rate. Most of the people affected will be middle class, not the rich. The government has already stepped back from taxing investment operations in foreign countries (which would target mostly rich people, and specially - financial institutions).

The other policy, the increase of the ceiling of the first revenue tax bracket is a good policy, though. The problem is that the government will still tax middle class people in other ways.

The reason the government wants to do this, however, is to throw some crumbs to the people in order to get re-elected in the 2026 elections. This increase in tax revenue won't be translated into public investment, since the workers' party pushed a fiscal policy early in 2023 to limit government spending increase.

The Brazilian workers' party strategy is to distract the left militancy so they still rally around the party for the next elections (so they don't leave the workers' party for another party), while at the same time they maintain their neoliberal agenda that supports the interest of the big financial sector and banks.

Lula is revealing himself as a sneaky bastard, and a shackle to an actually radical leftist agenda.

[–] yogthos@lemmygrad.ml 6 points 21 hours ago (1 children)

I largely agree, the whole taxing the rich thing is fundamentally a measure designed to preserve existing capitalist relations.

[–] burlemarx@lemmygrad.ml 6 points 18 hours ago* (last edited 12 hours ago) (1 children)

It's not even effectively taxing the rich. The government simply set a goal of 0 budget deficit.

In Brazil the government spends budget is divided into primary spends and nominal spends. Primary spends are the amount the government spends on health care, education, social benefits, infrastructure, research, military etc. Nominal spends are financial expenses (treasure bonds interest rates, securities etc). So the workers' party government goal of 0 deficit is basically about reducing primary spending to a value below the tax revenue.

Whose interests this policy and budget goal favors? The financial sector. The government put a lock on primary spending, in a way those spendings can't grow in the same pace the population grows or gets old. It can't run a deficit to increase the amount it spends on infrastructure and services. Even if the government increase its tax revenue, it can't increase spending, since there's a lock limiting government spending.

So how the financial and banking sector profits from this? Many of the government state owned companies will start having budget issues, meaning they can't provide services properly to the population. Meaning, to increase investment, they need private money, meaning opening a door for privatization. Secondly, any tax revenue growth that surpasses primary spending will only be used to pay financial expenses, meaning more interests and bonds issued paid by the government to the financial sector, who will probably use this new money to buy off state assets.

So the government is basically pushing a right wing agenda with leftist rhetoric. And using a good, but meagre policy to make the left militancy to support the right wing policies that will come in the same bill.

[–] yogthos@lemmygrad.ml 1 points 19 minutes ago
[–] Makan@lemmygrad.ml 4 points 1 day ago

Well, it's a start.