Taxing your supporters
A classic question in politics is, "What does it take for a politician to advocate policies that might hurt her or his supporters?"Ask your students why President Calderón is proposing higher taxes on his business supporters. Similarly, why did Nigerian President Yar'Adua raise petrol (gasoline) prices? ( See Shortage amid plenty, especially the follow-up comments.)
Did Tony Blair ever do something like that? President Putin? Would President Hu ever propose a policy detrimental to the Communist Party? Why or why not?
Is this situation more likely in a democratic regime than in an authoritarian one?
Mexico Moves to Cut Back Tax Loopholes for Businesses
"Hoping to raise Mexico's tax collection rate to offset future declines in oil revenue, President Felipe Calderón presented a tax package to Congress Wednesday that seeks to close many of the loopholes that businesses have used to avoid paying taxes.
"Mexico collects less than 11 percent of its gross domestic product in taxes, well below the average of about 16 percent for South American countries and 25 percent for developed countries...
"The government has made up for its tax shortfall by heavily taxing the state oil monopoly, Petróleos Mexicanos, which last year financed 40 percent of government spending. Starved for investment money, Pemex, as the company is known, now faces stagnant production and declining oil reserves...
"That [tax] measure is likely to be publicly popular, but it is also likely to be opposed by some of the most powerful companies in Mexico, which quietly backed Mr. Calderón’s campaign last year..."
See also Mexico cheers higher taxes
"May 31, 2007: That's right, investors in Mexico drove that market to a record high yesterday on news that a soon-to-be-announced tax overhaul may require Mexican businesses to pay more taxes. Seems that's better than no reform at all..."
Labels: Mexico, politics, theory
posted by Ken Wedding @ 8:40 AM
0 Comments:
Post a Comment
<< Home