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Inequality in Brazil : income, wealth and tax distribution
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FRIEDRICH-EBERT-STIFTUNG INEQUALITY IN BRAZIL Table 1 Appropriation of national income by selected income strata and demographic composition Income strata Demographic group 0–90% 10% 1% 0.1% Black women 10.3% Black men 12.6% White women 11.2% White men 11.7% Source: Made-FEA/USP(Bottega et al., 2021b, Table 1, translated). 4.0% 8.0% 13.9% 27.8% 1.2% 2.2% 5.9% 15.3% 0.5% 0.6% 3.0% 8.0% These results are in line with the evidence provided by the World Inequality Database(WID) for Brazil 2 : between 2001 and 2019, the top 10 per cent share of pre-tax income 3 for individuals aged 20 and over fluctuated between 60.9 per cent to 57.1 per cent, exhibiting remarkable stability over the past two decades. In the same vein, the share of the top 1 per cent rose from 23.7 per cent in 2001 to 25.4 per cent in 2012, then trending downwards in the following years, reaching 20.3 per cent of pre-tax national income in 2019. By contrast, the bottom 50 per cent appropriated an income share of 8.6 per cent, in 2001, 10.8 per cent in 2013, and 10.1 per cent in 2019. corresponds to 42 per cent of the 10 per cent poorest, be­ing overrepresented, alongside black men, at the bottom of the income distribution. Thus, racism and racial hierarchies manifested in the social division of labour seem to correlate with income inequality more than gender relations, even though there is also evidence that men in general as well as within each racial category outnumber women among the top earners. Still, white women represent a greater portion of the top 10 per cent, 1 per cent and 0.1 per cent, than black men: 27 per cent, 23 per cent and 15 per cent, in contrast to 20 per cent, 13 per cent and 10 per cent, respectively(Graph 2; Graph 3). THE PROFILES OF THE RICH Looking at the profiles of the rich, Bottega et al.(2021b) show that the top of the income distribution structure is characterised by gender and racial inequalities. First, white men make up 42 per cent of the highest income decile, 57 per cent of the top 1 per cent, and 69 per cent of the top 0.1 per cent, while black women only account for 10 per cent, 6 per cent and again 6 per cent of these top income earners, respectively. We should note that black women represent 26.6 per cent and white men 22.6 per cent of the Brazilian population, so it is not surprising that the former Second, and from another related perspective, national per­sonal income is disproportionately appropriated by a few white men(Bottega et al., 2021b). White men among the top 1 per cent(around 705,000 individuals or 0.57 per cent of the Brazilian population) appropriate a greater share of na­tional income(15.3 per cent) than all black women together, who number 32.7 million individuals, but appropriate only 14.3 per cent of national income. Similarly, white men among the top 10 per cent, representing 4.2 per cent of the popula­tion, absorb 27.8 per cent of national income. This figure is higher than the share of both white women and black men, who correspond to 23.3 per cent and 27.6 per cent of the population, and obtain 25.1 per cent and 20.6 per cent of national income, respectively(Graph 4; Table 1). 2 For details on the methodology used by WID researchers to esti­mate income inequality in a vast sample of countries, see Bajard et al.(2021), Chancel and Piketty(2021), Chancel et al.(2023). For Latin American countries in particular, see also De Rosa et al.(2022). 3Pre-tax national income is the sum of all pre-tax personal income flows accruing to owners of the production factors labour and cap­ital before taking into account the operation of the tax/transfer sys­tem, but after taking into account the impact of the pension system. The key difference between personal factor income and pre-tax in­come is the treatment of pensions, which are counted on a contribu­tion basis by factor income and on a distribution basis by pre-tax in­come. The population is comprised of individuals over age 20. The base unit is the individual(rather than the household) but resources are split equally within couples. For more details, see Sources& In­formations in https://wid.world/country/brazil/. Third, among white men, income is more concentrated at the top in comparison to other demographic groups(Botte­ga et al., 2021b): the income share appropriated by the highest decile within each demographic group is 60 per cent among white men, 53 per cent among white women, 44 per cent among black men and 42 per cent among black women. Similarly, the top 1 per cent within each demo­graphic group appropriates 29 per cent, 24 per cent and 16 per cent of each groups total income for white men, white women, and black people, respectively. As should be expected, income inequality among black people is less pro­nounced, although still high. 4