Wednesday, May 13, 2009

Calderón in Torreón*

The president paid a visit to Torreón yesterday to inaugurate a new hospital. As is always the case when he visits, the town was swamped by soldiers and federales. Two years ago, he gave a speech at a local college whose campus had a perimeter of a little more than a mile. The visit was unannounced (as was this one), but when I went for my morning cup of coffee, there was a soldier standing at attention every two yards or so around school's outer wall.

While in nearby Saltillo yesterday (ever the politician, Calderón never seems to visit one city without stopping by the other), he mentioned the possibility of removing the IETU in favor of a value-added tax on food and medicine. The comment came during a meeting with local businessmen, who, of course, favor the replacement of a corporate tax with a consumer tax. Calderón's response was, "taxes are better the more general they are". All things being equal, that's a fair statement. However, when the proposal is to make the tax code far more regressive, all things are most assuredly not equal.

I'm not sure there is ever a good time to implement a more regressive tax code, but during the midst of a grave economic crisis and spiking unemployment, taxing the two things people most need seems like a golden way to offer the middle class and the poor a middle finger. If Calderón is seriously considering this (and it's possible that it was just a meaningless play to his audience), the PAN deserves to lose in July. I commented on Friday how Calderón and his business base seemed to have been at odds in recent weeks; maybe this has something to do with getting back on better footing with them.

*The title almost rhymes. How have I never noticed that before?

Update: The PRD has come out against the plan.

Another update: So has the PRI

2 comments:

jd said...

Mexico's tax structure/collection rate is already embarrassing, especially when it's compared to its OECD peers. Going through with this would really be a pretty bold move by Calderon and the PAN. What Mexico needs from a conservative party is technocratic skill and incremental reform, not a south-of-the-border GOP.

pc said...

That's well put about what the PAN has to offer. I don't think it'll go anywhere, it would just be such a bad move politically. They have a long way to go before the are comparable to the GOP, but supporting an IVA on food and medicine would be a big step in that direction.