Post by account_disabled on Mar 13, 2024 6:43:09 GMT -2
Payroll relief has been frequently discussed as a potential loss of revenue for the government mainly due to the supposed reduction in tax revenue the impact on the financing of social security and social programs and the need for fiscal balance since Any significant reduction in tax collection without adequate compensation creates additional pressures on the public budget and affects the government's ability to meet its obligations.
However in my view this view is mistaken. The idea that payroll tax relief would imply a loss of revenue and would be unconstitutional does not stand up to a contrast with the science of law.
To clarify this myth I remind you that the government is not renouncing this principle. After all the exemption has been in place for over a decade — that is the recipe has been the same for ten years. Therefore the argument of alleged unconstitutionality is not valid.
Correctly Minister Ricardo Lewandowski now retired CG Leadsfrom the Federal Supreme Court already expressed his opinion on the issue when the tax exemption was maintained in the previous government. Like him I am frankly in favor of it because it is a mistake to think that by charging more you will earn more.
To explain my point of view I will use the example of the North American model: in the United States payroll taxes finance social security medical expenses and unemployment insurance. To finance social security social security; old age survivor and disability insurance the employee and employer are charged . totaling .. The tax is charged up to an annual limit of US.
To finance administrative expenses with unemployment insurance the employer is charged on the first US paid to the employee. However this rate is reduced in practice to . as a credit equivalent to up to . is allowed a rebate calculated based on the payment of unemployment insurance made to the states state unemployment taxes . . Therefore all in all it can be said that the general incidence on the payroll reaches . including the unemployment insurance rebate charged at the state level.
In Brazil the social security contribution charged to employees of private companies has progressive rates and its calculation base is limited to the contribution salary which will serve as the basis for granting benefits under the general social security regime. Here employers are subject to a series of payroll contributions none of which have a limit based on the remuneration paid to the employee.
From an economic sociological and employment perspective payroll tax relief optimizes employability — contrary to what could happen if Congress does not overturn the veto.
Another point I would like to highlight refers to a symbolic image of economist Richard Kern. He once said that when dismissing a group of employees the effect of negative multiplication is generated: it means that these employees will stop consuming from other employees from other companies who also lost their jobs. It is an inevitable nominal effect because there will be unemployment and other sectors that enjoy this regime and that pay to . on revenue lose this cost. Therefore they will have to pay on the payroll. This creates unemployment.
Therefore contrary to losing revenue the payroll tax relief would gain revenue if the state situation were maintained as it is. It now remains to be seen whether this bill will be maintained by the President of the Republic.
However in my view this view is mistaken. The idea that payroll tax relief would imply a loss of revenue and would be unconstitutional does not stand up to a contrast with the science of law.
To clarify this myth I remind you that the government is not renouncing this principle. After all the exemption has been in place for over a decade — that is the recipe has been the same for ten years. Therefore the argument of alleged unconstitutionality is not valid.
Correctly Minister Ricardo Lewandowski now retired CG Leadsfrom the Federal Supreme Court already expressed his opinion on the issue when the tax exemption was maintained in the previous government. Like him I am frankly in favor of it because it is a mistake to think that by charging more you will earn more.
To explain my point of view I will use the example of the North American model: in the United States payroll taxes finance social security medical expenses and unemployment insurance. To finance social security social security; old age survivor and disability insurance the employee and employer are charged . totaling .. The tax is charged up to an annual limit of US.
To finance administrative expenses with unemployment insurance the employer is charged on the first US paid to the employee. However this rate is reduced in practice to . as a credit equivalent to up to . is allowed a rebate calculated based on the payment of unemployment insurance made to the states state unemployment taxes . . Therefore all in all it can be said that the general incidence on the payroll reaches . including the unemployment insurance rebate charged at the state level.
In Brazil the social security contribution charged to employees of private companies has progressive rates and its calculation base is limited to the contribution salary which will serve as the basis for granting benefits under the general social security regime. Here employers are subject to a series of payroll contributions none of which have a limit based on the remuneration paid to the employee.
From an economic sociological and employment perspective payroll tax relief optimizes employability — contrary to what could happen if Congress does not overturn the veto.
Another point I would like to highlight refers to a symbolic image of economist Richard Kern. He once said that when dismissing a group of employees the effect of negative multiplication is generated: it means that these employees will stop consuming from other employees from other companies who also lost their jobs. It is an inevitable nominal effect because there will be unemployment and other sectors that enjoy this regime and that pay to . on revenue lose this cost. Therefore they will have to pay on the payroll. This creates unemployment.
Therefore contrary to losing revenue the payroll tax relief would gain revenue if the state situation were maintained as it is. It now remains to be seen whether this bill will be maintained by the President of the Republic.