Mexican President Felipe Calderon called for doing “more with less’ when he presented his 2010 budget to Mexico’s Chamber of Deputies Last Tuesday. The austerity budget, designed to resolve a 480,000 million peso fiscal deficit, calls for increases in almost every tax that affects the working class and poor, including the Value Added Tax (IVA,) taxes on internet services, mobile telephones, income taxes, and bank deposit taxes. And, in its present form, the budget further dismantles the last remnants of Mexico’s nationalized industries.
The document, now in draft form, will undoubtedly undergo modification by the legislature before a final budget is approved in November. However, in the context of Mexico’s participation in the North American Free Trade Agreement, the country’s ruling elite has no more choice in this matter than do California or Michigan. Like the US states, the Mexican government is under the thumb of Wall Street and the financial sector...
On top of the current 15 percent IVA, a 2 percent sales tax will be applied to both food and medicines—items that historically had been free of taxes. Ironically, the budget document refers to the new tax as a “fund to combat poverty,” a nod to a paltry increase in some programs for the very poor. It proposes increases in electricity and gasoline prices. Beer and cigarettes will also both be taxed at higher rates...
In comparison, the budget document contemplates a continuing financial drain from the nearly permanent “war on drugs.” Since 2007 the Public Security budget has exploded by 140 percent. The national defense budget has increased by 33 percent...
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