Tax Reform package`s passage is no reason to celebrate

This reform, passed by the lower House of Congress September 15 and by the Union Senate Wednesday, now joins the Electoral Reform in being one of President Calderòn`s major achievements of his first year as president. His predecessor, PAN`s Vincente Fox, failed in his two attempts to get a similar package passed through both national legislative bodies. The general purpose of the reform is to create more spending money for the government in its anticipation for the already dropping value of oil, which currently comprises nearly 40% of the government`s total income. The package lays out a string of tax reforms that aim to achieve a 2% increase in the state`s annual income.

While one means of achieving this somewhat ambitious objective is by charging companys with a minumum tax, the more controversial and already well-felt change has been the proposed 5.5% increase in oil prices. Even in the weeks leading up to the bill`s approval, the anticipated rise in oil prices has already sparked a nation-wide .62% spike in prices of basic foods such as bread, chicken, and eggs. Obviously, this reform isn`t quite as popular as its electoral cousin.

Yesterday, AMLO (PRD presidential candiate for 2006 elections that still claims to be the country`s legitimate president after, he claims, mass electoral fraud resulted in PRI`s Calderon`s victory) traveled around the neighboring state of Puebla, condemning the PRI backed Tax Reform. He criticized the President for permitting a 35% rise in the price of basic goods while the minimum wage has only increased 4%. He also represented a recently popular sentiment within PRD factions in his proposal for eliminating the extraordinarily large pensions of ex-presidents. AMLO:

It is totally unjust that Carlos Salinas de Gortari (President from 1988-`94) receives 5 million pesos (US$500,000). It seems incredible. The same is received by that lazy traitor to democracy, that thief, Vicente Fox. And the people are dying of hunger! Courtesy of La Jornada; trans. from Sp.

While the general idea of giving the government more money so that it can have a greater capacity to do good things for a society can`t really be opposed. Unfortunately, while the government`s will surely get more money, it won`t be going toward solving the problems of poverty and hunger that plague Mexican society. Instead, as a direct result of the neoliberal policies that took full effect in Mexico after the 1980 economic crisis, the money will slip right through the government`s hands and be sent directly to the multi-national financial organizations such as the World Bank, to which it owes billions of dollars of debt.

I realize that the ultimate solution to poor countries' problems is not the absolution of foreign debt, however, it is often the first step needed in giving a country even a glimmer of hope of ever emerging from the black hole of national poverty. With interest piling on top of the mountain of debt at an uncontrollable rate, the half of the country that is poor can`t hope to be seeing any of the government`s money anytime soon.