How does Brazilian private investment respond to increases in the gross tax burden? An econometric investigation.

Vol. 29 No. 3 (2009)

Jul-Sep / 2009
Published July 1, 2009
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Santos, Cláudio H. dos, and Manoel Carlos de Castro Pires. 2009. “How Does Brazilian Private Investment Respond to Increases in the Gross Tax Burden? An Econometric Investigation.”. Brazilian Journal of Political Economy 29 (3):213-31. https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/494.
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How does Brazilian private investment respond to increases in the gross tax burden? An econometric investigation.

Cláudio H. dos Santos
Técnico de pesquisa e planejamento e coordenador de finanças públicas do IPEA e pesquisador associado do Levy Economics Institute
Manoel Carlos de Castro Pires
técnico de pesquisa e planejamento do IPEA e coordenador geral de política fiscal da Secretaria de Política Econômica do Ministério da Fazenda
Brazilian Journal of Political Economy, Vol. 29 No. 3 (2009), Jul-Sep / 2009, Pages 213-231

Abstract

This article aims to offer three contributions to the debate on the recent performance of the Brazilian economy. First, it presents approximate quarterly figures for the Brazilian private investment beginning in 1995. Second, it presents estimates of the Brazilian “investment function” which are robust to the presence of structural breaks. Third, it discusses the sensitivity of private investment to increases in the gross aggregate tax rate. Estimates based on national accounting data prior to march 2007 seem to indicate that an increase of 1% of GDP in the tax rate is associated with a reduction of 1% in private investment.

JEL Classification: C22; C82; E22.


Keywords: Brazilian private investment Brazilian aggregate tax rate Cointegration analysis with structural breaks