Crescimento, emprego e produção setorial: efeitos da desoneração de tributos sobre a folha de salários no Brasil

The high tax wedge on labor income and the cost for the economic sectors, especially industry, is a significant problem in the Brazilian economy. We use a computable general equilibrium model to project the effects of the exemption of the payroll tax on the economy, with different assumptions about the adjustment of government budget. The results of the exemption on the economy tend to be positive, even when the government adjusts its spending due to falling revenues. By sector, the exemption causes a positive impact on industrial sectors, particularly for capital and intermediate goods’ industries.