A UNIVERSAL BASIC INCOME FOR BRAZIL: FISCAL AND DISTRIBUTIONAL EFFECTS OF ALTERNATIVE SCHEMES

Abstract

The Covid-19 pandemic outbreak has led to an increasing interest in universal basic income (UBI) proposals, as it exposed the inadequacy of traditional welfare systems to provide basic financial security to a large share of the population. In this paper, we use a static tax-benefit microsimulation model to analyse the fiscal and distributional effects of the hypothetical implementation in Brazil of alternative UBI schemes that partially replace the existing tax-transfer system. The results indicate that introducing a UBI/Flat Tax system in the country could be both extremely effective in reducing poverty and inequality and economically viable.