Share this story
Close X
Switch to Desktop Site

Mexico and Boston's Tea Party

THOSE who have been out of fourth grade for a while might need their memories refreshed, but the Boston Tea Party is an episode of American history applicable to today's Mexico.

On the night of Dec. 16, 1773, a group of colonists disguised as Indians dumped valuable tea into Boston Harbor to protest a hated tax imposed by Parliament. The famous justification was ''No taxation without representation.''

About these ads

The analogy is clear. The Mexican people feel they are being heavily taxed by a Congress that doesn't represent them. And they are right.

The supposed cure for the current Mexican financial crisis is an austerity program that has as its cornerstone more taxes on the middle class, which, my wife notes, was already bearing the taxes of Sweden but receiving the services of Zaire.

President Ernesto Zedillo Ponce de Leon sent a bill to Congress that would raise the value-added tax (paid on almost everything) from 10 to a whopping 15 percent.

Mexicans are known for stoically enduring government mismanagement. This time, however, there was protest. The newspaper Reforma even published the phone numbers of individual members of Congress so that the public could call them. Predictably, those who tried to were almost invariably frustrated. The press quoted several PRI congressmen as saying, in effect, ''I will not be pressured by my constituents.''

The tax increase won strictly along party lines. All the opposition voted against, while all but one of the PRI in each house voted for the measure. Why did the PRI members vote against the sentiments of the vast majority of the people? Because they were told to do so by the president, to whom they owe their loyalty. Since Mexican politicians can never be reelected, they have no opportunity to be rewarded for conscientious representation of constituents. Future jobs in government depend on strictly toeing the party line.

In Mexican politics, there is a presumption that the president knows what he is doing. Presidents have taken advantage of this, becoming arrogant in their decisions, which are often simply wrong. The case of the value-added tax is a good example because of its obvious unfairness.

Mexico simply isn't a society in which a dominant uniform sales tax could be considered borne fairly. About half the population is so poor that it lives on beans and tortillas bought at markets where no taxes are applied. The wealthy buy heavily abroad and have never been taxed according to their abilities or responsibilities. That leaves a once growing, but now contracting, middle class of about 35 percent.

About these ads

What Mexico needs least right now are more burdens on the middle class. What it needs most is to remedy the inequality of wealth. Gift and estate and/or inheritance taxes have satis-factorily accomplished redistributions in most developed countries. They have never even been proposed in Mexico, however, because the PRI government depends on the support of the wealthy.

Another source, which could raise revenues considerably faster, would be a tax on current wealth above a determined minimum. There is precedent already in Mexico in the corporate sector, where a 2 percent tax on assets was initiated during the previous administration of Carlos Salinas de Gortari.

No doubt, any such tax on the wealthy would be difficult to enforce; it's much easier to simply add 50 percent to an existing tax. But we're not talking ''easy'' here; we're talking ''right.'' Nothing Mexico does to get back on its feet is going to be easy, so it might as well do things correctly.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.