Taxing great wealth, a way to reduce inequality

The tax system is a tool that can reduce inequality and improve income distribution by collecting taxes on large fortunes and higher-income workers, agreed in separate interviews Héctor Villarreal, economist and academic at the Institute of Technology and Studies. Superiors of Monterrey (Itesm), and Raúl Carbajal, professor at the National Autonomous University of Mexico (UNAM) and advisor to the Legislative Branch during the six-year term of Vicente Fox.

They argued that although Mexicans already benefit from social programs such as the Pension for the Well-being of the Elderly, a tax reform that includes taxing more the segments that generate greater wealth, either through their income or their heritage, would contribute to improving income distribution and eradicating inequality.

Last Thursday, during the fall meeting of the International Monetary Fund (IMF) and the World Bank, those responsible for the finances of the countries that make up the Group of 20 (G20), the forum for coordinating macroeconomic policies of the economies The most important companies in the world, including Mexico, reiterated their commitment to progressive taxation, a project promoted by Brazil, which seeks to charge a tax of at least 2 percent to large fortunes.

That percentage would apply to each individual’s total wealth, measured by the value of their stocks and bonds and investments in private companies.

Progressive taxes are those taxes that increase as the taxpayer’s economic capacity increases, and in different countries there is already a consensus to achieve this.

Last June, Fernando Haddad, Brazil’s finance minister, noted that polls in many countries suggest that 80 percent of populations support a tax on the mega-rich.

Carbajal, from UNAM, stated that it is feasible to reform the income tax (ISR) to include more workers who have incomes greater than 250 thousand pesos per month, since they pay taxes tiny.

That would improve income distribution. They pay more than 20 thousand pesos, but it is little because the mega-rich have millions. The tax system we have today does not redistribute income, and the ISR, as designed, does not apply to the mega-rich at a level appropriate to their wealth or high income levels.he expressed.

The analyst commented that there is also a proposal to tax investments in international markets, for which agreements would have to be established with other countries.

He pointed out that in 2023 Oxfam-Mexico proposed charging 2 percent to those who have a fortune of 20 million pesos and 3 percent if it amounts to 100 million pesos, as well as 5 percent to those who have more than 20 billion pesos. weights.

The Oxfam study indicates that for every 100 pesos of wealth generated between 2019 and 2021, about 21 pesos fell into the hands of the richest 1 percent of Mexico and 0.40 pesos to the poorest 50 percent of the population.

For his part, Villarreal, from Itesm, commented that before applying a tax on wealth, the property tax would have to be reviewed.

I think we need a modernization of property; A significant part of wealth is in property. They are little distorting and raise a lothe declared.

And second: we are returning ownership, perhaps federal and participatory to the states. There are Ferrari cars registered in Morelos that do not pay a fifth of ownership. We would have to start there; If we are going to discuss a wealth tax, fine, let it be something reasonable and not impact people who might seem rich, but in reality are not.he mentioned.