Brazil uses a four level system for economic classes based on income. Classes B and C are considered middle class. My values are from early 2010:
A >R$10,000 / US$6,000 monthly
B R$3,000-R$9,999 / US$1,800-US$5,999 monthly
C R$1,000-R$2,999 / US$600-US$1,799 monthly
The US$ figures are rounded using about US$1.00=R$1.67
Income taxes are progressive and reach the maximum rate of 27.5% at a monthly income of roughly US$2150. Classes B and C have been growing very rapidly and have lots of purchasing power, but also pay a greater tax burden because their tax burden on earned income is far greater than those who pay taxes on investment income or interest, both of which are taxed at the source and have generally lower rates than on earned income.
Despite the taxes Class B and C are buying huge numbers of cars and other consumer durables. The famed Bolsa Familia operates for people whose monthly income is below R$ 540 per month. |
