> extremely high taxes
I always find this funny. Brazilian taxes are nowhere near what I would say “high”. I pay about twice as much out of my compensation as I would pay in Brazil, and that would be as if I did zero tax optimisation back then.
I always find this funny. Brazilian taxes are nowhere near what I would say “high”. I pay about twice as much out of my compensation as I would pay in Brazil, and that would be as if I did zero tax optimisation back then.
Compared to many countries Brazil doesn't have such high taxes (I'd say that if you work remotely for a company outside of Brazil, you'll probably have much lower taxes compared to almost any other country -- working locally the difference isn't as big, but you have higher taxes in many other places).
What it really lacks is access to capital (which is the real "mojo" of the US compared to the rest of the world).
Incorporating and getting a functional business entity in Brazil is harder. In USA I literally do in 5min online including bank account. In Brazil they are taking out microscopes to verify your signature on the paperwork matches.
And in the USA if you have one bad employee, just fire them any time. In Brazil for better or for worse nowhere near as easy. Obviously better for employees but businesses don’t like it because you can get stuck with a employee dragging down everyone unless you pay them a years salary etc.
It’s still something you can do in less than a month. That’s nothing compared to the life of a functional enterprise.
For you to have to pay “years of salary” the employee must have been with you for a very long time - as in decades. Considering most companies don’t live to 2 years, the odds of it happening to you are very slim. Labor laws exist to protect the weak part against the possible abuses of the company. You must agree the harm a company can do to its employees is far greater than what an individual employee can do to a company. And this is why unions exist: because collectively is the only way the employees have teeth.
As a business owner: not so bad if you are a freelancing or just a few business partners providing some type of service, but terrible the moment you start considering employing other people.
Have you seen the public services of countries with lower taxes? Their public hospitals?
> but terrible the moment you start considering employing other people.
Employing people isn't cheap anywhere (except, perhaps, in the US, where labour rights are kind of nonexistent)
I quick visit to the dermatologist to check for some tiny bumps that showed up in my forehead: 60€, out of pocket, because the insurer doesn't cover it.
All in all, my point was only that the amount of taxes that people pay and quality of services are not necessarily related. Germany has high taxes and expensive-but-adequate healthcare. Greece has high taxes and expensive-and-inadequate healthcare. Switzerland has low taxes and universal/cheap healthcare (max. $5000/year deductible, max charge per hospitalization of $700).
That's how public health works. It's the same as mortgage insurance in Brazil (where I come from), which is mandatory, and, since it's mandatory, it doesn't consider actuarial risk.
BTW, “right” and “wrong” are human constructs, so you are totally free to organise a society around the survival of the richest. It’s just not a society you’ll like living in.
There are other ways to properly fund universal healthcare that does not involve creating artificial taxes:
- Increase the actual income taxes.
- Policies that mandate the allocation of revenue from vice and environmental taxes (alcohol, smoking, gambling, fossil fuels) to the health system.
- Social security reform. Pensions should not be an investment, only insurance. Turn pensions into an UBI program that has a hard cap.
- Supplemental and voluntary insurance plans to work on top of the existing public network. This might be risky as it can introduce a dual-class system, but (a) it's already the reality in most countries anyway and (b) could be avoided if the system is built around a "cafe sopezzo" [0] mechanism (the priority is given to you when you use the service, but redirected to non-paying members for the months when you don't)
If you go public, it’s free, but you’ll be in line based on the risk to your life, so it might be a long while. You really don’t want to check in to a public hospital and get an MRI right away because that means whatever you have is really, really bad.
The result is a nearly 100% tax on computers and consumer electronics.
One for you, one for the government.
And it's getting worse. Tariffs on computer hardware were raised only a few months ago.
The tariffs for commercial importations are much lower and depend on the part. For SSDs, for example, II is around 10%. With other fees and ICMS, you're looking at around +60% total. Still high, but not nearly as high.
But large businesses would rather really prefer if you continued to believe they pay +88% just like you. That way they get to point at the government while keeping their fat margins.
And, in the meantime, they help push for more "grift-friendly" politicians. For them, it's a win-win situation.
Nope. ICMS is calculated "por dentro". It's base / (1 - rate), not base * rate.
Product = 100
II = 60
= 160
ICMS total = 160 / (1 - 0.18)
= 195.12
ICMS = 195.12 - 160
= 35.12
> The tariffs for commercial importations are much lower and depend on the part.
Fair point, but they're sure as hell not "much" lower. As you yourself noted, they are still high, and obviously those companies are going to want to add their own margins on top.
Apart from that, this is something that affects the HN crowd and almost nobody else.
Brazil relies heavily on indirect taxation, not income tax.
The average Brazilian effectively pays about *41.1%* of their gross income in taxes when all major taxes are included. (https://ibpt.org.br/brasileiro-trabalha-150-dias-por-ano-ape...)
They break it down as: roughly 15.2% from income-related taxes, 3.1% from property taxes, and *22.9% from consumption taxes*.
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And anyway, the real problem is that the burden of tax is way way higher for a brazilian than someone in the global north.
As a general rule, in Brazil only people who do qualified work can reach the (converted) 1000 USD threshold. People who spent years in university or trade school, and are either very good at their jobs or graduated in prestigious professions such as engineering, law or medicine.
Even if they were to pay no taxes, most 40-hour week professional programmers here would still earn, at the end of the day, less than a high-school diploma 20-hour worker in US. Let that sink in.
Now take into account that on average, out of those $1000, $400 becomes taxes: In practice, there are lots of qualified workers here who don't even make $8k/year after taxes...
And no, the lower living cost does NOT offset it. Imported/technology goods are disproportionately expensive relative to income since we receive in BRL but still pay the dollar price, if not higher, due to said consumption taxes.
It's nigh-impossible to have true disposable income that your average Joe or plain Jane can use to dedicate to homebrew their personal projects in Brazil. And when it happens, it tends to in software form, since software still is relatively cheap to make.
People whose income in the top 25% bracket here make less in dollars than US's bottom 25% bracket, simple as that.
This is, of course also true of many many countries, which is why you usually don't hear about the new cool tech from Nigeria, Brazil, Bangladesh, Congo, etc. The people who are qualified enough tend to leave the country for better conditions. Of course, I'm not saying it's impossible, but people get surprised, just as you can see in this thread.