The new United Nations Report Informe sobre Desarrollo Humano México 2011: equidad del gasto público: derechos sociales universales con subsidios focalizados, highlights how so many of the Mexican government's programs "in redistributive terms are probably very questionable": They do not serve to lessen income differences, but rather benefit the rich more than the poor. I haven't gotten to read the report yet, but El Universal highlights a few examples:
- Farm subsidies going to richer farmers
- Health spending benefits not going to the poorest
- Education spending, ditto
(One excellent earlier study that demonstrate what programs in fact to improve equality, and which lead to more inequality, is A Decade of Falling. Inequality in Mexico: Market Forces or State Action? by Gerardo Esquivel, Nora Lustig and John Scott. One earlier version available for free here)
Another case in point: Ending the tenencia, or roughly the sales tax for new cars, has been a populist mantra for particularly PRI candidates for governor, who foolishly (from a financial, not electoral point of view) have championed taking away a tax that not only has provided much-needed income to cash-strapped state governments, but whose elimination will be a blatant hand-out to the more wealthy of Mexicans.
Who wants to pay car sales taxes voluntarily? Of course few, but fact remains that the ones most likely to pay the highest tenencia are from the upper economic layers of Mexican society.
Credit then, of sorts, to Veracruz Governor César Duarte, who despite irresponsibly calling for the elimination of the tenencia in his election campaign, is now backtracking and want to keep it, realizing that its elimination would break the state's finances.
What a belated "discovery" - after the election has been one, of course.
Guess who else is proposing its elimination, and ranking high in polls? PRI candidate Eruviel Ávila in Mexico State. When the time comes to pick up the bill... well, that's another story.
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