Redistributive Impact and Efficiency of Mexico's Fiscal System

John Scott
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John Scott: Department of Economics, Centro de Investigación y Docencia Económica (CIDE)

No 8, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: A comprehensive tax and benefit incidence analysis is presented covering the redistributive fiscal instruments implemented in Mexico in 2008 and 2010, representative of the urban and rural sectors, as well as nationally. The expansion of basic social programs and effectively targeted direct monetary transfers have increased the progressivity of Mexico ́s fiscal system in recent years, but redistributive impact is limited by a comparatively ineffective tax system and a significant share of resources tied to instruments with limited redistributive effectiveness, including subsidies to contributory social security systems, large exemptions in direct and indirect taxes, energy subsidies, and access to public tertiary education. The transition to a more effective and equitable fiscal system will require a comprehensive tax-benefits reform designed to improve tax productivity and benefit equity, combining a broad tax base with universally accessible public services and social protection.

Keywords: Ntax-benefit incidence analysis; social spending; inequality; poverty; Mexico (search for similar items in EconPapers)
JEL-codes: H2 H5 I3 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2013-01, Revised 2013-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published in Commitment to Equity, January 2013, pages 1-17

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http://repec.tulane.edu/RePEc/ceq/ceq08.pdf Revised version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:08

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