THE ROLE OF INHERITANCE AND TAXATION ON WEALTH AND INCOME DISTRIBUTION IN BRAZIL AND THE STATE OF RIO GRANDE DO SUL

A INFLUÊNCIA DA HERANÇA E DE SUA TRIBUTAÇÃO NA DISTRIBUIÇÃO DE RENDIMENTOS E RIQUEZA NO BRASIL E NO RIO GRANDE DO SUL

ABSTRACT

This article analyzes the role of inheritance and donation on the distribution of wealth and income in Brazil and the state of Rio Grande do Sul. Although several scholars coming from branches of Social Sciences have already scrutinized the influence that slavery and colonial exploitation had - and still have - in the Brazil’s development, no work in the economic literature has thus far attempted to estimate Brazil’s current inheritance stock in monetary terms. With this in mind, this paper has three specific goals: i) to estimate, in accordance with an original framework, the inheritance stock of Brazil (and Rio Grande do Sul) and their flow with respect to national income and household disposable income; ii) to measure potential revenue through the application of a more progressive taxation of inheritance and donations based on inheritance stock estimates and iii) to simulate the distributional effect of reallocating these new fiscal resources. It is important to note, however, that the simulations presented in this paper are static exercises, and do not intend to capture general equilibrium or behavioral effects.

KEYWORDS:
Brazil; inheritance; inheritance taxation; intergenerational mobility; wealth and income distribution