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Average Effective Tax Rates in Mexico


  • Arturo Antón Sarabia

    () (División de Economía, CIDE)


The paper estimates average effective tax rates on consumption, labor and capital income for Mexico, using the method of Mendoza et al. (1994) and related extensions, including two novel refinements. On average, it is found that consumption taxes are roughly between 7 and 14%, whereas labor and capital income taxes are between 8 and 12.5%, and 8.5 and 15%, respectively. Tax estimates are found to be consistent with predictions from theory in general, both for Mexico as well as for a sample of OECD countries.

Suggested Citation

  • Arturo Antón Sarabia, 2005. "Average Effective Tax Rates in Mexico," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 185-215, July-Dece.
  • Handle: RePEc:emc:ecomex:v:14:y:2005:i:2:p:185-215

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    References listed on IDEAS

    1. Easterly, William & Rebelo, Sergio, 1993. "Marginal income tax rates and economic growth in developing countries," European Economic Review, Elsevier, vol. 37(2-3), pages 409-417, April.
    2. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
    3. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
    4. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    5. Mendoza, Enrique G. & Tesar, Linda L., 2005. "Why hasn't tax competition triggered a race to the bottom? Some quantitative lessons from the EU," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 163-204, January.
    6. Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997. "On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture," Journal of Public Economics, Elsevier, vol. 66(1), pages 99-126, October.
    7. Thomas Dalsgaard, 2000. "The Tax System in Mexico: A Need for Strengthening the Revenue-Raising Capacity," OECD Economics Department Working Papers 233, OECD Publishing.
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    Cited by:

    1. López-Martín Bernabé & Leal-Ordoñez Julio C. & Martínez André, 2017. "Commodity Price Risk Management and Fiscal Policy in a Sovereign Default Model," Working Papers 2017-04, Banco de México.


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