By Akracia – Fenikso Nigra
Since January 2026, those earning up to five thousand reais monthly stopped paying Income Tax. The measure affects 16 million people and was presented as tax justice. The government celebrates. The market projects controlled inflation. Workers discover a few more reais in their paychecks.
But what does tax justice mean when the structure remains untouched?
The exemption did not emerge from nothing. Until 2023, the IR table remained frozen for years, silently eroding purchasing power. Inflation rose, nominal salaries rose, tax bit larger slices without anyone having actually gained anything. Adjusting the table is not generosity. It is correction of accumulated distortion.
Official discourse emphasizes progressivity: those who earn less pay less, those who earn more pay more. In practice, the measure operates within narrow limits. To compensate for the exemption of up to five thousand, a minimum rate of ten percent was created on annual incomes above 600 thousand reais. Approximately 141 thousand people fall into this bracket.
The numbers impress less when one observes where income comes from in Brazil. Salaries suffer taxation at source, automatically. Profits and dividends distributed by companies are exempt, except when they exceed 50 thousand reais monthly. Financial income has privileged treatment. Inheritances and large estates circulate without significant taxation.
Those who live from work pay proportionally more than those who live from accumulated wealth. This architecture was not touched. The five thousand reais exemption relieves pressure on lower middle class and formal workers. But it does not alter fundamental logic: taxation concentrated on consumption and labor, light on capital and property.
Public debate treated the measure as historic achievement. Perhaps it is, within possible frameworks. But possible frameworks are political constructions, not natural laws. Other arrangements exist. One need only will to build them.
Countries with less regressive tax systems tax inheritances, large fortunes, speculative financial transactions. In Brazil, these proposals appear periodically and die in Congress. Not due to technical impossibility. Due to political power correlations that protect wealth concentration as untouchable principle.
The chosen compensation—minimum rate on high incomes—is timid. It catches only those who formally declare high income. Fortunes immobilized in estates, trusts, offshores, and sophisticated tax planning structures remain beyond reach. The system taxes flow, not stock. Accumulated wealth sleeps peacefully.
International experiences show different paths. Norway taxes fortunes annually, forcing declaration of all assets. France had a tax on large fortunes for decades. Uruguay taxes inheritances progressively. Argentina implemented a tax on large estates during the health crisis. These are not distant utopias. They are concrete political choices of states embedded in global capitalism.
In Brazil, any proposal in this direction faces immediate resistance. They claim capital flight, investment disincentive, punishment of success. The same arguments used against any redistribution since always. Meanwhile, billionaires pay proportionally less tax than teachers.
The five thousand reais exemption will have real impact for millions. Retirees receiving INSS pensions will have a few more reais. Workers with signed work cards will see smaller deductions. This relief matters, especially in tight budgets where every real counts.
But localized relief does not replace structural transformation. A fair tax system would require inverting the pyramid: heavy taxation on large estates and capital income, light on labor and basic consumption. This is not on the agenda. Not because it is technically impossible, but because those who have veto power have interest in maintaining as is.
Various strands of critical thought point out that taxation is not a technical question of collection efficiency. It is a political question about who decides collective priorities and who bears costs of maintaining state structures. When decisions about tax systems are concentrated in political and economic elites, the result tends to protect their own interests.
Alternatives exist outside the centralized state framework. Self-managed communities historically organized collective contribution based on assembly decisions. Not through fixed rates on monetary transactions, but according to real need and contributive capacity discussed collectively. Systems of collective work efforts, community labor, and in-kind contributions function as taxation decided by those who actually contribute.
These models do not solve the complexity of contemporary urbanized economies. But they point to an alternative principle: who decides about collective contribution should be who contributes and lives with consequences of these decisions. Not distant hierarchical structures that negotiate tax burden according to lobby pressure.
The practical response is not to celebrate the five thousand exemption as tax revolution. It is to recognize it as localized adjustment within a structure that remains profoundly unjust. And to ask: why not tax large fortunes? Why do capital incomes have privileges over labor incomes? Who gains from maintaining this architecture?
These questions have no neutral technical answers. They have political answers that reveal whom the system serves.
As long as taxation on concentrated wealth remains an untouchable taboo, adjustments at the pyramid’s base will function as pressure valve. They relieve tension without altering structure. They allow discourse of tax justice without real tax justice.
The extra money in paychecks is real. The relief for those living on the edge too. But one cannot confuse patch with transformation. Nor punctual relief with effective redistribution.
Between accepting crumbs as maximum achievement and demanding structural transformation, no neutrality is possible. The choice defines what country is built.
In struggle we continue—dignified, free, and untamable.
