Brazil's CPMF Tax Goes Down

This morning, Brazil's Senate voted down the CPMF tax by a vote of 45 in favor of maintaining the tax, and 34 against keeping it (the tax would have needed a 2/3 majority, or 49 of the 79 senate votes). The CPMF (Contribuição Provisório a Movimentação ou Transmissão de Valores de Créditos e Direitos de Natureza Finança - Brazilian acronyms don't always totally match with their full names) was basically a tax waged on those who had bank accounts. Every time you paid bills online or did major withdrawals or deposits on your bank account, there was a .38% tax levied (originally the rate was .25%, but former president Fernando Henrique Cardoso gradually raised it to its current level of .38% in 2001). Because only the middle-middle to upper classes in Brazil have bank accounts (due to multiple economic and social factors), this tax really affected the wealthiest sectors of Brazil.

The failure means a couple of things. First, the opposition has celebrated this as a major victory, and it is a blow to Lula's administration (though nowhere near the "worst defeat Lula has ever suffered" and revealed a major popular refutation of his policies, which is what one member of the opposition declared. Losing a 2/3 majority by only 4 votes hardly constitutes a major refutation of his policies.) Additionally, as I mentioned in passing before, it really shows how despicably contrarian oppositional politics in Brazil are sometimes. The bill was defeated by the PSDB-Democrata right-wing political alliance, the same parties that voted for the bill's permanence in 1997 when Fernando Henrique Cardoso, of the PSDB, was president, and the tax continued to be passed during his administration. Yet the moment it came up for renewal (until 2011 in theory) under Lula, the opposition condemned the tax as one of the worst things to ever happen to "honest" (read: white and wealthy) Brazilians. Finally, there is the policy impact. The CPMF wasn't a useless tax - it played a major role in providing funds to social programs like Brazil's health care system and the Bolsa Familia, which helps families with less than the minimum income (which in Brazil is about $200/month). In seeking its renewal, Lula had pledged that all of the money would go to Brazil's health care (and most of it had already gone to health care). With this vote, the right-wing opposition, in what is in no way surprising yet still frustrating, basically said "to hell with the poor and disadvantaged in Brazil, and to hell with a funcitoning health care system".

This doesn't totally mean these programs will now disappear. Just because one form of taxation has disappeared doesn't mean others won't pop up, and already the Folha de São Paulo (incidentally, a much better example of good journalism without nearly the classism and Lula-hatred of O Globo) is already pointing out that other taxes can and will probably surface to replace the CPMF. However, the vote will also probably force Lula to reduce Brazil's budget surplus to continue to try to address the issues of social and economic inequality in Brazil.

Finally, in the area of a more personal gripe, there is the issue of the PSOL (Partido de Socialismo e Liberdade). The Party claims to be from the left and to want to fight for equality amongst all Brazilians. Its claims appear leftist on the surface, but it has been clear since the party's foundation earlier this decade that there are no pretenses to issues of social equality in every aspect, as it repeatedly and adamantly refuses to even consider basic women's rights such as abortion. The strongest claims they could make to seeking "equality" were generally on economic grounds (better distribution of wealth, combat rural poverty, improve minimum wage, etc.). However, even those claims are now in doubt. The one senator from PSOL, João Nery, voted against the tax, in effect saying that he was not interested in approving a tax that actually taxed the wealthier in an effort to help the Brazilian poor and try to reduce the numerous social and economic equalities in Brazil. I have ideologically had more problems withe PSOL than the PSDB for a couple of years - at least I knew the PSDB wasn't even going to pretend to try to really work on issues like social equality, preferring neoliberalism and openly favoring "private initiative" (and subsequently blaming the poor for their conditions) instead. But any mild shred of respect for PSOL I may have had has basically disappeared. While it is possible, I find it extremely unlikely that Nery was bucking party policy behind closed doors on this one (as it was only founded in 2003, PSOL is still very much the party of its leader, Heloísa Helena, a presidential candidate last year, and her followers). Once again, despite its protestations to represent the "uncorrupt" left, the PSOL did everything to try to help the PSDB-Democratas right-wing alliance, as it has done many times before. Nery's vote today just goes to show that the PSOL, despite its superficial appearance and insistence otherwise, is no less than a mockery and affront to all parties and people actually interested in social and economic justice.