income tax (ISR*) It is what workers pay so that their country, state and/or municipality can pay for the necessary public goods and services.. Generally, each country sets a maximum income tax rate. Slovenia has the highest maximum rate with 61.1%. In Mexico it is 35%. From a list of 136 countries, there are 46 that have a higher maximum income tax rate than Mexico. Of which 32 are developed and 14 developing.
Among the public services covered by ISR are education, health, transportation and security. These basic services must be of high quality and accessible to the entire population regardless of the rate paid by each inhabitant. As is the case in many of the 32 developed countries. However, in Mexico, the population with higher purchasing power does not use basic public services and prefers to hire higher quality private services at a higher cost; example:
The INEGI (National Institute of Statistics and Geography) prepares the ENIGH (National Household Income and Expenditure Survey) which reports income and expenses in percentiles; that is, they are ordered from 1 to 100. Mexico has 130 million inhabitants, in 36 million households. Each percentile is made up of 360,000 households. Percentile 1 is the 1% of households that earn the least with 19,240 net annual ps. The 100th percentile is the 1% of households that earn the most with 1,556,502 net ps per year, which is equivalent to 2,394,618 ps gross per year, considering the maximum income tax rate of 35%.
The 100th percentile is the only one in Mexico that can pay for private services with the same quality as the 32 developed countries that appear in the table above. Only instead of paying between 35.1% and 61.1% ISR according to the table, he pays an ISR equivalent to 75%.
The rest of the percentiles that pay the maximum ISR rate would have to increasingly use public services because they cannot cover the 958 thousand ps of private basic services.
As percentiles drop, ISR decreases, but even more basic needs increase: food, energy, housing, etc. which makes it impossible to pay for education, health, transportation and private security.
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Dear reader,
Better public services would be more widely used, which would mean a lower equivalent ISR rate, which would allow the maximum ISR rate to be increased in order to incorporate the most disadvantaged percentiles into the market, producing a virtuous circle where everyone wins… Who puts the bell on it? to the cat?.
take life
*ISR with social security included.
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