The way taxes are done here are beyond stupid. Seriously, it's Idiocracy level stuff.
There are 19 basic types of taxes. Most of these taxes are collected at the factory, before the product even enters commercialization. Which in reality means all these are transferred to the consumer, which kinda explains why everything is so expensive.
We passed a law requiring taxes to be visible on receipts, in hopes this would help people realize how much they're actually being buttfucked, but it hasn't helped much. People still try to point out stuff like, some products have over 60% taxation. Some, even more, like, 75%+, which basically means that for every thing you're buying, one is for you, three is for the government. Yeah, stupid as fuck.
These are also known as INDIRECT taxes, which are absolutely GREAT for the government, because it means they're VERY hard to evade. You only have to keep an eye on the factory/company level to make sure the amount produced roughly equals the expected amount of taxes you would expect from that level of production.
Taxes on profit, comparatively, make up a smaller percentage of the governments revenue. These are the direct taxes, the ones you have to file and pay and such.
Our government is VERY efficient at collecting taxes because of this taxation scheme.
HOWEVER, this taxation scheme HEAVILY penalizes the poorer half of the population.
Why?
Well... If you're being taxed on stuff like food, medication, clothing, gas, transportation, etc... These are stuff everyone buys.
Poor people don't pay taxes on their paycheck or their profits. But they do on everything else. And this everything else has, roughly, 40% of tax added on top of it.
Assuming you make US$ 300 a month, which is about minimum wage here. And you spend half of it on rent, and half of it making a living. About half of that, will be taxes.
If you make US$ 3.000,00, which would be around the top half of middle-class, you're going to pay 27,5% of your salary, then you're going to expend around, say, 1.500 making a living and save the rest. 40% goes on top of this 1.500, adding up to US$ 600, and 27,5% goes on the full 3.000, adding up to 825. If you add the two up, this means you've paid, in total, US$ 1425 in taxes. Just under 50% of taxes.
The thing is, this is REALLY CLOSE to the amount of taxes paid by someone that makes minimum wage, isn't it? If poor people are paying 40% taxes, on average, and someone high-middle class is paying around 50%, something is wrong, isn't it?
It gets worse. The more money you make, the lesser the proportion of that income is spent on your livelihood. Which means, less of your income is subject to that 40% indirect taxation average. Which, in reality, means that the more money you make, the closer you get to being taxed only or very close to only that 27,5% which is the top bracket of the income/profit tax.
Indirect taxes are SHIT for the people, and GREAT for the rich. Because the more revenue government makes from indirect taxes, which are harder to evade, the less incentive they'll have to increase income/profit taxes, which hit much harder on the richer part of the population.
The government is also very protective of our "internal market" (which is nonexistant for several goods). Which means the import taxes is stupidly, PROHIBITIVELY high.
Simply put, the government DOES NOT want you buying stuff overseas, they want you to buy stuff HERE, and keep the profit HERE. Doesn't matter if the thing is not really MADE here, they want you to buy it here, so they can slap on every kind of tax ever invented by mankind onto it, plus a hefty profit to the reseller and the importer.
Because of that, our buying power is low. Very low.
You see, the thing with our government is, we are essentially governed by the commies we tried to purge during the Military Dictatorship that lasted from 1964 to 1988. They eventually won because the military weren't actually economic geniuses (surprise), and they plunged the country into a massive inflation (surprise), and the economic miracle they promised wasn't really a miracle but a bunch of loans and someone eventually collects (surprise).
And these commies believe that regulations are the way to go. Heavy, heavy regulations. And everything written down. Our law, is very extensive. Our legal tradition stems from the likes of Portugal, Italy and France, the so-called "civil law" countries. And oh boy, did we ever learn from them. The Napoleonic Code was the main inspiration for our first republican Civil Code, in 1916, which we only really replaced in 2002 for something that's very, very similar, but more in line with our constitution from 1988, which is also one of the largest Constitutions in the world, with over 250 articles and their sub-articles (paragraphs, letters, numbers).
Our labor law is ancient by any recognition. It's a mish-mash of laws from the 1930's to the current day, that don't really talk to eachother. The result of which is that the labor supreme court (and by the way we have specialized supreme courts, and a super-supreme court that deals with the constitution which basically covers everything since the constitution is so verbose), ends up regulating as much, or maybe even more, than the labor law itself. Which is sorely in need of a reform, that can't actually happen because it's political suicide to mess with labor law.
And the commies-in-charge want to stay in power, they want to win elections, they don't actually give a crap about the country and making it grow. So the status-quo just kind of remains.
The legal insecurity is too strong. Because tax law is so complicated and convoluted, and labor law is basically being changed all the time in the courts, companies don't really know what the hell to expect when setting up in Brazil. Really, they don't.
I haven't even TOUCHED on the regulations companies are subjected to.
The only ones relatively safe from the staggering amount of regulations are banks. Because banks are simply too powerful and can demand basically what the hell they want.
We have very little in the manner of laws governing what banks can and cannot do. Most is done by government bodies akin to the FCC and our Federal Bank and it's subdivisions, and these regulations are veryyyy lax. And because they're only regulations and not laws, they can be changed much more easily. And it's only a couple of people really deciding what goes on these regulations so bribes are also easier.
It's more than Game of Thrones level stuff going on here. I'm not even kidding. Hell, i didn't even get started, this is just a warm-up for me. The more i study law, the more i see just how absolutely god-awful EVERYTHING here is.
We don't really have a democracy, it's really, really, just a bunch of very old families, the same ones that held power for the last 100 years or more, just sharing the pizza slices between them. Our supreme court(s) is a joke. It's like a really bad sketch of what a country should be.
Best thing would be to just throw EVERYTHING away and start fresh, like, tabula rasa. For real.