Opinion – Vinicius Torres Freire: Zeroing gasoline tax is Bolsonaro, zorra!

Let’s assume that Congress passes Jair Bolsonaro’s latest demagogic whim and ends federal taxes on fuel sales. At best, and “all else being equal,” the price of gas could drop by as much as 40 cents. Hardly “everything else” will stay constant.

The price can get even higher. It may even be that Bolsonaro wins a few political points by being defeated. For some, perhaps the image of the system’s victim remained: “They don’t let the man work”.

If the price of a barrel of oil reaches US$ 100 (it is US$ 88), fuel will be even more expensive than it is now, even without federal tax.

It is not known where the dollar goes, which also sets the price of gasoline, diesel, etc. It is not known how much of the tax reduction will disappear because it can be appropriated by companies, being absorbed by the margins of the companies involved in the fuel chain.

There would then only be a hole of tens of billions of reais in the government’s accounts, which would be covered with tax increases elsewhere, increasing the bullshit of the tax system, otherwise lending a helping hand to people who are not exactly the poorest in the country. .

How will the hole be compensated? Who will pay? Will credit become more expensive, for example? It is not even possible to imagine, of course, that the government will cut spending to clean up the new mess it intends to make.

Furthermore, it is another indication that Bolsonaro and his political command are willing to do any business in order to avoid defeat or elimination in the first round of the election.

This is not to say that crazy measures like this can certainly earn points in polls or at the polls. They can even be counterproductive in electoral terms, at the limit. However, as we should be quite used to it by now, in the case of Bolsonaro or:

1) lack of pragmatism, undermined by the crudest, atrocious or ugly ignorance — these people shoot themselves in the foot for stupidity or incompetence or;

2) the idea is really just to cause confusion, play for the Bolsonarist phalanges and keep a troop together, immune to reason or unnoticed, a group that today is equivalent to a quarter of the electorate, according to polls. It’s enough to avoid impeachment, get to a second round and try to disrupt the environment as much as possible.

Will it pass Congress? Hard to know. Senators and deputies are on vacation, literally or metaphorically traveling. Upon hearing the journalist’s question, some ask “where did that come from?”. Around the dome of the center, however, it is said that the idea is the same, to approve a constitutional amendment towards the end of March, in order to lower fuel and electricity prices; that parliamentarians “would not have the courage” to deny this “benefit for the people in times of inflation”.

Would it make any sense to do away with energy taxes? Perhaps. It is not possible to know without asking “in exchange for what?”. It depends. Which taxes would be saltier? What is the effect on rents and economic efficiency? Who would pay the bill, in the end?

It’s never a simple answer, when it comes to taxes: who collects the tax is not the one who keeps the bill. The effect of a tax increase here may show up in another part of the economy (the account may be transferred, some business or income that has nothing to do with the tax may be affected, there may be increased inefficiencies and general losses, etc.).

In short, this is not how it is done. What is happening now is blatant populism, direct and atrocious, perhaps just an attempt to create turmoil and smokescreen. It’s “Bolsonaro, zorra!”.