2022 Race

Lula promises to tax the super-rich and revoke federal spending cap

lula labor reform
Lula during a 2019 rally. Photo: BW Press/Shutterstock

While confirming the federation between the Workers’ Party, the Communist Party of Brazil (PCdoB), and the Green Party (PV) this week, the group set out its core proposals to repeal the 2017 labor reform and federal spending cap, as well as raising taxes on large fortunes.

Both the labor reform and public spending cap came during the Michel Temer administration, who took office in 2016 after Congress impeached the Workers’ Party’s Dilma Rousseff.

The Workers’ Party candidate and former President Luiz Inácio Lula da Silva is critical of how the labor reform scrapped mandatory trade union dues, the prime source of funding for representative entities. Before going into politics, Lula himself spent years as a trade union leader and organizer.

Lula’s election platform includes promises to make “the wealthy pay the right amount in income and wealth taxes.” Brazil’s Constitution includes a provision to tax large fortunes, but it has never been regulated or properly implemented. Studies indicate such a measure could generate revenue of BRL 100 billion per year (USD 467 million) and affect less than 0.1 percent of the population.

The proposals are clearly likely to cause discomfort to economic elites and other sectors who could help Lula reclaim the presidency. While all too aware of this, Lula is hoping the proposals will be sufficiently popular among the electorate.