A tale of two taxes: The diverging fates of the federal property and income tax decrees in post-revolutionary Mexico

Mónica Unda Gutiérrez
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Mónica Unda Gutiérrez: Instituto Tecnológico y de Estudios Superiores de Occidente, Periférico Sur #8585, C.P. 45604 Tlaquepaque, Jalisco, Mexico

Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, 2017, vol. 13, issue 02, 107-116

Abstract: The Mexican tax system in the 1800s was almost entirely composed of indirect taxes. However, the Revolution opened a window for change. In the early 1920s, President Alvaro Obregón created two direct taxes by decree: the federal property tax and the income tax. It was a clear disruption of the status quo, naturally raising opposition from those affected by the new taxes. Yet the attempt to establish the federal property tax failed, while the income tax was a relative success. This paper explains the divergent fates of these two tax decrees. In order to explain the divergent outcomes I focus on the political struggles behind both decrees. I argue that the roles played by both the opposition groups and the government in the two struggles differed greatly and help explain the fates of these taxes. The political and ideological background behind both tax struggles also help to explain the failure of the federal property tax and the implementation of the income tax. KEY Classification-JEL: H20. N00

Keywords: Tax; politics.; Interest; groups.; México.; Tax; reform (search for similar items in EconPapers)
Date: 2017
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