Brazil candidate Rousseff opposes taxing fortunes

Wed Jul 21, 2010 8:41pm EDT

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* Brazil's Rousseff steps back from hard-left proposals

* Says "no" to media control and shorter work week

* Seeks to win over centrist voters, investors

By Raymond Colitt and Fernando Exman

BRASILIA, July 21 (Reuters) - Brazil's ruling party candidate in October's presidential election, Dilma Rousseff, said on Wednesday she saw no benefit in taxing big fortunes as some of her coalition allies have proposed.

Since the beginning of the race in April, Rousseff has been trying to shed her hard-left image and court investors. She has pledged continuity of President Luiz Inacio Lula da Silva's mostly market-friendly policies, which have helped accelerate Brazil's economy to growth of around 7 percent this year.

"There is no indication that taxing big fortunes results in big benefits," Rousseff told state-owned TV Brasil in an interview to be broadcast later on Wednesday.

"It doesn't always result in gains for society," said Rousseff, Lula's former chief of staff.

Several hardliners in her center-left coalition have been calling on Rousseff to include such a tax in her government platform as a way to reduce the country's large gap between rich and poor more quickly.

Despite some progress due to fast economic growth and social welfare programs, income gaps have narrowed only marginally since Lula took office in January 2003.

Rousseff has been tied in opinion polls with former Sao Paulo State Governor Jose Serra, who is preferred by some investors for his extensive executive experience and market-friendly centrist PSDB party.

Nicknamed "The Iron Lady," former leftist militant Rousseff distanced herself on Wednesday from a labor union proposal to reduce the work week by four hours to 40 hours.

Industry leaders have opposed such a move, arguing it would increase unemployment and the cost of doing business in a country already losing its competitive position because of high taxes and an expensive currency.

"Neither the executive nor the legislature can legislate on a matter that has yet to mature in society," she said when asked about the proposed work week reduction.

Public sector labor unions are a traditional stronghold for the Workers' Party, or PT, founded by Lula in 1980.

But Rousseff must also meet demands from her more conservative allies, including the centrist PMDB party.

In the interview with TV Brasil on Wednesday, she rejected demands by some members of the PT to increase control over the media, which they say is dominated by the country's traditional oligarchy. "I'm rigorously against press censorship ... against content control," Rousseff said. (Reporting by Fernando Exman; Writing by Raymond Colitt)

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