Brazil’s fiscal crisis is rooted in its history of independence

Having completed its bicentennial in September 2022, the proclamation of Brazil’s independence derived from a process that, in some ways, resembles the context of the country in 2022. In both situations, Brazil suffered from a serious economic and fiscal crisis, which produced peaks in social inequality.

“Brazil was born out of a fiscal crisis. Its father was the deficit. Its mother, inflation,” begins the first chapter of “Adeus, Senhor Portugal,” a book on the economic history of Brazil’s independence written by Fundação Getulio Vargas professor Thales Zamberlan Pereira. He argues that these economic conditions forced profound political changes.

In the case of Brazil’s independence, change was led by a disgruntled elite, upset about paying the bills of an empire it had no relationship with, and which was left near broke due to military expenditures during the Napoleonic wars. 

Today, a similar movement may be connected to the rise of the extreme right and the subsequent election of President Jair Bolsonaro. “The link between the past and present is a political change of great proportions,” says Mr. Pereira.

Brazil’s unfair tax history

Back in the 1800s and still today, Brazil has a tax system...