Dce 05 2025| Nº. 185

Editorial

On Tuesday, Presidents Luiz Inácio Lula da Silva and Donald Trump held another phone call that both sides later described as friendly and forward-looking. Speaking to reporters, Lula said his relationship with Trump is “going very well” and suggested that he expects the United States to soon announce additional tariff reductions on Brazilian exports after the 40-minute conversation with his counterpart in Washington. Trump has already rolled back steep tariffs on Brazilian food products last month, reversing measures he imposed in July amid tensions over the prosecution of former President Jair Bolsonaro. Lula described the latest conversation as “extraordinary” and said the two leaders also agreed to expand cooperation against organized crime. For his part, when asked about the conversation, Trump reiterated that he “likes” Lula. This is a promising development for Brazil even as the United States embarks on an increasingly hostile, interventionist stance in the Caribbean and Venezuela, which shares a border with Latin America’s largest nation.

Domestic politics were less harmonious for Lula this week as his nomination of Attorney General Jorge Messias to the Supreme Federal Court set off a standoff with Senate President Davi Alcolumbre. Late last month, Lula selected Messias to replace Justice Luís Roberto Barroso, who retired early, but official confirmation proceedings are yet to begin. On Tuesday,  December 2, citing that delay, Alcolumbre canceled the confirmation hearing previously set for December 10 and accused the executive of an “unprecedented” procedural failure. Lula, asked about the impasse on December 3, said he “does not understand” why this pick has become such a political flashpoint, stressing that he has named eight justices across his presidencies and describing Messias as “professionally qualified.” The dispute reflects a broader power contest between Congress and the administration, with Alcolumbre openly favoring Senator Rodrigo Pacheco for the supreme court vacancy.

Meanwhile in regional affairs, it was reported this week that Brazilian meat mogul Joesley Batista quietly stepped into Venezuela’s political turmoil after flying to Caracas in late November for a discreet meeting with President Nicolás Maduro. His trip followed a tense phone call in which Trump told Maduro it was time to consider leaving office and allowing a political transition to take place. Batista traveled without an official mandate, yet he arrived with uncommon credibility in both capitals: JBS, his company, has deep business ties in the United States—including a record donation to Trump’s presidential inauguration—and more than US$2 billion in prior food shipments to Venezuela. People briefed on the visit said Batista’s task was exploratory, testing whether Maduro might accept safe passage before sanctions and pressure intensify further.

Highlights

• Supreme Divergence. Supreme Court Justice Gilmar Mendes suspended this week a 1950 constitutional provision that allowed any citizen to file an impeachment request against any of the 11 justices of the country's highest court. His decision seeks to shield the Supreme Court from actions brought by politicians and far-right activists sympathetic to former President Jair Bolsonaro, who was sentenced to more than 27 years in prison. With Gilmar's decision, only the Attorney General's Office will have the prerogative to request the impeachment of Supreme Court justices.

• Senate Reaction. In response to the measure taken by Gilmar Mendes, the president of the Senate, David Alcolumbre, made a harsh speech, saying that the Supreme Court is stealing legislative powers from the National Congress. The trend now is for Bolsonaro's supporters in Congress to pressure Alcolumbre to confront Gilmar Mendes, opening a new chapter in the long saga of clashes between the legislative and judicial branches in Brazil. The Attorney General's Office has asked Gilmar to reconsider his decision.

• Poverty Reduction. Poverty and extreme poverty rates fell for the third consecutive year in Brazil. In 2023, 27.3% of the population lived in poverty. This rate dropped to 23.1% in 2024. The percentage of people in extreme poverty fell from 4.4% to 3.5% in the same period. Despite the improvement, there are still 48.9 million poor people in the country, a number greater than the entire population of the state of São Paulo.

• Politician Arrested. Rodrigo Bacellar, the president of the Legislative Assembly of Rio de Janeiro, was arrested by the Federal Police. He is suspected of leaking classified information about a police operation carried out in September, which culminated in the arrest of another state deputy, known as TH Joias, accused of involvement in corruption and drug trafficking. The case further deepens the public security problems in Rio de Janeiro, a state that has become accustomed to seeing its governors arrested.

• Bolsonaro feud. This week, the sons of former president Jair Bolsonaro published messages on their social media criticizing their stepmother, Michelle Bolsonaro. The public disagreement within the most important family of the Brazilian far-right was motivated by Michelle's criticism of an attempt to get closer to Ciro Gomes in the state of Ceará. Ciro was once a minister in Lula’s government, but has drifted to the right in recent years, and is now attempting to align himself with Bolsonaro's movement.

News from ABO and social organizations and movements:

Brazil-USA. Paulo Abrão, the WBO executive director, participated this week in the annual meeting of the National Institute of Science and Technology for Studies on the United States (INCT-INEU), in São Paulo. Abrão was one of the members of the panel that discussed Brazil-USA bilateral relations throughout history and in the present moment. Learn more.

Allende in Chile. The Salvador Allende Foundation of Chile launched an urgent appeal for help this week, as, for the first time, it was cut from the national budget by the Chilean Congress. The cut, of approximately US$100,000 annually, "makes the institution's operation unfeasible. There is an imminent risk of closure, which would interrupt the preservation of historical archives and Human Rights programs." Read the Foundation's statement.

COP30 Review. Caetano Sacannavino, coordinator of Saúde e Alegria, published an article this week in which he reviews COP30. In the text, published on the blog Papo de Responsa, of the Folha de São Paulo newspaper, he assesses: “If we needed to run, at least we moved forward, in the field of just transition, attention to the most impacted peoples, global adaptation goals, forests, financing, new NDCs, ‘less bad’, but insufficient, as usual. Read the full content.

Feature Article

True Fair Taxation Requires a Counterpart from the Economic Elite, which is White and Male

By Viviana Santiago*

In 2025, Brazil witnessed debates about fair taxation, which included income tax reform and the approval by the Chamber of Deputies and the Senate of a Bill (PL 1.087/2025) that in order to reduce inequalities in the country exempted citizens earning up to R$ 5,000 (approximately US$1,000) from paying personal income tax (IRPF). Furthermore, this same bill reduced income tax for those earning up to R$ 7,000 per month. Finally, as a compensatory measure for the tax waiver, a minimum tax rate of up to 10% was adopted, benefiting approximately 141,000 Brazilians (0.13% of the population), a percentage corresponding to those Brazilians with incomes above R$ 50,000 per month. The estimated impact of implementing these measures gives clues to the extent of the system's inequality, since this minimum taxation could alleviate the income of another 10 million people.

Bill 1,087 corrects a historical distortion that causes the tax burden to remain on the base and middle of the Brazilian economic and social pyramid, while the super-rich accumulate wealth. Beyond fiscal relief, the measure is a milestone in the fight for a fairer tax system and a concrete step towards promoting social justice and strengthening democracy because it increases the disposable income of the poorest families – mostly headed by Black women – and stimulates the economy, acting both in combating inequality and in building a fairer and more inclusive economic model.

However, this victory is insufficient. True fair taxation requires progress on the other side of the equation as well. The maintenance of centuries-old privileges, such as the tax exemption for profits and dividends, demonstrates that the counterpart of the predominantly white and male economic elite has not yet been addressed.

In Brazil, profits and dividends are not taxed, which differs from most countries. Within the Organization for Economic Co-operation and Development (OECD), 24 of the 38 members have increased the maximum tax rate levied on distributed profits and dividends in the last two decades, according to researcher Sérgio Gobetti of the Institute for Applied Economic Research (IPEA). Of the few countries that, like Brazil, exempted dividends, only Estonia and Latvia maintain this practice. According to Gobetti, approximately 160,000 people (0.1% of the country) receive 47% of the nearly R$1 trillion in profits and dividends distributed in 2023.

It is also crucial to remember the exclusion of large rural producers from the minimum taxation, which perpetuates a model of privilege and causes serious socio-environmental impacts. Thus, the approval of Bill 1,087 does not replace the urgent need for a structural and anti-racist reform, which includes the taxation of large fortunes, as already foreseen in the Constitution, and the inclusion of racial markers in income tax returns to support truly reparative public policies.

In the document "The Root of Inequality is at the Top – The Distributive Impacts of Class, Race, and Gender in the New Income Tax Reform," published in November 2025, Oxfam Brazil reflects, from a feminist and anti-racist perspective, on the implementation of Bill 1,087. It makes the following recommendations for deeper advances in fair taxation: implementation of progressive income taxation through the expansion of tax brackets and updating of personal income tax rates to make it truly progressive; periodic assessments of income tax considering gender and race; and the inclusion of a field for racial self-declaration in the annual tax return to strengthen the quality of data production. It also includes the revocation of the income tax exemption on profit and dividend distribution, ending the asymmetry in treatment between capital income and wage income; the regulation of the application of taxes on large fortunes (according to article 153, VII of the Constitution); and the review and updating of the tax benefit policy for a more equitable distribution of tax burdens, with the implementation of a transparency system for tax benefits granted, similar to the "Transparency Portal" of the federal government.

The progress we are currently experiencing is still timid in the face of the scale of tax inequality in Brazil, which requires attentive and qualified participation from society to ensure that proposals do not succumb to the economic and corporate interests that perpetuate historical privileges. For deeper changes, it is essential that organizations and social movements continue to mobilize and fight so that Congress makes further progress in this area and ensures that the system stops penalizing those who need it most.

*Viviana Santiago is the executive director of Oxfam Brazil

Feature articles express the opinions of the author and do not necessarily reflect the opinions of the editors or WBO.