ABSTRACT
Income distribution in Mexico, as in many Latin American countries, is very unequal. Nearly 43 per cent of the population lives below the poverty line, according to the National Institute of Statistics (INEGI 2006). This presents fiscal policy-makers with the challenge of financing economic growth and social welfare at a time when total financial resources are insufficient to meet the country’s social protection needs. In part, this reflects a long-standing reluctance by Mexican policy-makers to confront the need to address the problem of growing income inequality through a more equitable tax policy.
