European countries achieve an average of 4 percentage points of inequality reduction through direct taxes (Atta-Darkua and Barnard, 2010). Taken together, transfers and direct taxes reduce inequality by around 10%, which compares well by Latin American standards, but European countries manage to achieve a reduction of around one third through these instruments (Higgins and Pereira, 2013). Given that Brazil’s level of taxes is not far away from European levels, this comparison suggests that more could be done to raise the distributional effect of direct taxes in Brazil.