Income Redistribution And Inequality In The Mexican Tax-Benefit System

Type Journal Article - Cuadernos de Economía
Title Income Redistribution And Inequality In The Mexican Tax-Benefit System
Author(s)
Volume 36
Issue 72
Publication (Day/Month/Year) 2017
Page numbers 261-284
URL http://fce.unal.edu.co/media/files/Huesca_junio_16.pdf
Abstract
The paper examines the redistributive effect that was achieved by the Mexican taxbenefit system in 2014 using personal income tax, indirect taxes, social security contributions and social benefits. Our goal is to analyse the impact on inequality due to fiscal system action and then go further by demonstrating to what extent the contributions have on the total redistribution effect. The Mexican tax-benefit system is characterised by significant pre-fiscal income inequality. The contribution made by Vertical Equity (VE) is relatively important, but Horizontal Inequity (HI) reduces its impact. Income taxation does not greatly contribute to VE. Furthermore, some households receive unequal benefits, and therefore decrease the positive effect induced by VE.

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