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When Do the Rich Willingly Pay Income Tax?


Brazil and South Africa have much in common. In particular, they are both large middle income countries with very high levels of income inequality where whites historically have dominated over blacks.

They differ markedly in terms of the significance of income tax. Relatively little income tax is collected in Brazil (4% of GDP). By contrast, South Africans an unusually high proportion of South Africa's GNP - about 15% - is collected by government in the form of income taxes. Direct income taxes fall relatively heavily on the wealthy.

Why do wealthy South Africans tax themselves so relatively heavily, and Brazilians so lightly? Evan Lieberman demonstrates that this difference dates back almost to the origins of income tax in the early twentieth century, and became more marked over time, accelerating during World War Two, and again from the early 1960s.

His explanation centres on contrasting definitions of citizenship, that he discusses using the notion of 'National Political Community'. That concept is arguably a little too abstract, and tends rather to obscure the central point: that rich white South Africans have been willing to tax themselves because they have perceived themselves as being under threat, and, until the recent end of white rule, trusted 'their' (centralised, national) government to use tax revenue to support and defend them. The most concentrated reforms in the income tax system and the fastest increases in revenue occurred immediately after the 1960 Sharpeville massacre, when the apartheid system became most intense and confrontational.

By contrast, wealthy Brazilians have experienced no comparable sense of internal threat and, unlike the South Africans, took no direct part in World Wars One and Two. The Brazilian state has been less centralized. Efforts directly to levy income taxes on the rich have been delayed and diluted in both provincial and national legislatures.


The rich citizens of many poorer countries pay shamefully little tax of any kind. The indirect taxes like VAT so favoured by international financial institutions are effective in many ways, but not in seriously taxing high incomes and wealth. Governments of poor countries need to raise more resources through income, wealth and property taxes. Is there anything practical to be learned from the South African experience, except that apartheid and white dominance had one incidental benefit?

Source: Evan S. Lieberman, 2001, 'National Political Community and the Politics of Income Taxation in Brazil and South Africa in the Twentieth Century', Politics and Society, Vol.29, No.4: 515-556.
Politics and Society is published quarterly by Sage (

Keywords: taxation, elites, Brazil, South Africa.

Commentator: Mick Moore, IDS (January 2002).

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