Abstract

MAYER-SERRA, Carlos Elizondo. How to Collect more Taxes Without Spending more Efficiently? On the Difficulties of Increasing the Tax Burden in Mexico. Rev. mex. cienc. polít. soc [online]. 2014, vol.59, n.220, pp.147-190. ISSN 0185-1918.

This article explores how tax revenue can be increased in Mexico, especially through more collection in higher-income sectors. An overview of the Mexican government's capacity to collect taxes is offered before analyzing the reasons why tax revenue has not increased in over more than two decades. A sketch of strategies that the recent Peña Nieto administration could have followed in order to increase tax revenue in a progressive fashion is also provided. One of the article's main arguments is that without more efficient public spending, it will be difficult to collect more taxes permanently, especially in such an open economy, with institutions that are as weak as those in Mexico. Furthermore, in a democracy, there is little public acceptance for more taxes, no matter how progressive they may be, unless the government can provide certainty about more efficient public spending. For these reasons, unless the quality and progressiveness of public spending and tax collection advances, it is even undesirable that the government increase its tax revenue.

Keywords : tax revenue; public spending; public finances; fiscal pact; income tax; Value Added Tax; Mexico.

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