The question of fuels: taxation, state structure and social chaos

The paralysis of truck drivers throughout the country due to the price of fuel leads to reflection on deeper issues about the structure of the Brazilian State. Government interference and the swelling of the state entity are two aspects that have been challenged by the social crisis created in recent days due to the successive increases in the prices of petroleum products.

One of the arguments put forward in disagreement with government policy is that Petrobras has changed its position in recent times, especially in the management of Pedro Parente, and there has been less interference by the state in the price of fuel, with greater fluctuation according to the international market. Such a view does not proceed, since in other countries the same conduct is adopted without there being an equal production of the effects verified in the Brazilian reality. The explanation for the chaotic situation of the last week is in other fields.

Excessive taxation is one of the main factors responsible for the high price of fuels (and of any other goods). The government's collection of funds in order to obtain sufficient resources to maintain a gigantic state structure is something that has long demanded discussion. There is no magic in this matter: the larger the size of the state, the greater the amount needed to maintain it. As a result, the leaner state structure would have less need for collection by the Treasury. The current configuration of the state does not meet the essential social demands, although it is an increasing drain of the riches produced by the collectivity.

Another point to highlight is the stoppage movement adopted by the truck drivers. The demand side, which concerns mainly tax reduction issues, is typically of a business nature, with little connection to the main interests of the workers. Although a good part of the strikers is made up of autonomous people, who have a direct interest in the subject, there is clear adhesion of the transport companies. It should be remembered that lockout, understood as the stoppage on the initiative of employers, is a situation prohibited by the national legal system, as can be seen from the analysis of Law No.7783 of 1989.

The statement is cliché, but it is true for that: every crisis brings an opportunity. The issue of fuels evidences the need for reflection on the size of the Brazilian State. The political use of the sad national situation at that time should not obscure the central theme: the excess of taxation, whose roots lie in the state entity's enlargement. The reduction in the size of the State and the consequent lower need for taxation, especially on consumption, would have a very beneficial social effect. As long as such a topic is not courageously faced, society will be subject to moments of economic dysfunctionality, in which, unlike common sense, suffering, while affecting the whole community, is more cruel to the poorest, deprived of resources for emergency situations. The great state interference is the cause of the disease, not its remedy.