The Elderly Issue

Brazilian people are paying a bigger percentage of their income in taxes than many countries of the EU. It is calculated that a Brazilian must work an average of 148 days a year just to pay taxes. It doesn`t sound very fair if we compare Brazil with the social reality of the countries that collect as much taxes from its citizens. In fact it isn`t. There are series of problems to be solved in the country, and to do so, politicians would raise taxes rather than change the tributary system which is draining our money. One of the main issues to be solved is the elderly.

Brazil is still a young country, a little less than 10% of the population is over 65 years old. If we compare it to the UK, Germany or Spain, which pay about the same percentage in taxes (an average of about 36% of the population income), we know where a great part of these taxes are going, since a much bigger slice of their population at a retirement age. In Brazil, though, there is a deficit of 44,5 billion Reais just in retirement money. Last year, the government had to destine 90 billion Reais to retirement. Does it sound fair? Well, it would if 47 billion of this amount wasn`t just for the public service retired, which respond for only 1 million people, while the private sector retired, which are 27 million people, generated a deficit of 42,9 billion. That means the public sector`s benefits are 32 times bigger than the private sector.

So if you work for the government you might get paid an average of 5.600 Reais a month in your retirement. If you don’t, well, then you will have to be satisfied with a monthly average of 722 reais. In order to hide the monstrous contrast, the government stopped publishing the public sector worker`s data every month. This information only comes out annually, now, when the government send the congress the following year`s budget.

The problem will only increase the next few years, since the elderly percentage is expected to grow to 40% of the population until 2030. That means less active workers, less taxes, bigger deficit. A huge change must occur in order to keep the situation under control. If the government doesn`t start choosing wisely how to use our money, it might cause a social crisis very soon. The new president elected, Dilma Roussef, denied the necessity of a change on the tributary system and believes the deficit in the economy can be solved by the economy growth. Could it be that simple? That`s what Brazilian population is about to find out.

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