From its independence to the present, our country has been characterized by having an excessive centralization of power by the central governments.
Centralization of power went hand in hand with fiscal centralization.
In Mexico, the Federation has a preponderant factor in the collection and distribution of the taxes themselves, which are distributed to the states and municipalities and which become the public resource for the execution of infrastructure projects, social programs, public works, etc.
According to data from the IMCO Public Policy Research Center (2020), the states generate only 12% of their income, while 80% of their resources come from the fiscal coordination agreement they have with the Federation.
The states and municipalities obtain their income mainly through federal contributions and participations (branch 33 and branch 28) and their own income (money that is collected through local taxes), some entities such as Mexico City 47.7% of their budget is generated with their own income, while in Durango 9% of the total budget is generated with state revenues.
The fact that states and municipalities depend on federal resources greatly limits their actions in planning and crystallizing their government plans.
Unfortunately, the democratization of the Mexican political system was not accompanied by a fiscal reform and a better distribution of public revenues. Carlos Madrazo, who was a political egregious from Tabasco, said the following: “the municipality is the foundation of democratic life by becoming the first authority and contact of the population.
In addition to meeting the basic needs of the inhabitants ”(Hernández Roberto, Minimal History of the PRI). As Madrazo said, the municipal authority is the one that knows first-hand the main problems that afflict citizens, therefore, it is imperative to provide greater budgetary autonomy to states and municipalities by decentralizing public finances in order to allocate more money to work. public services and improve public services, however, it is necessary for both authorities to make collection more efficient and, in accordance with the powers granted by law, to collect the taxes they have to collect; For example, the property tax is a municipal tax that is wasted in Mexico, the collection of property is 0.2% of GDP, while the international average is 2% (Cernichiaro Reyna, C, 2020, local public finances, Centro de Investigación Económica and Budgetary, AC).
The excess centralism that exists in our political system leads to a discretion in the exercise of public spending.
There is an urgent need for an improvement in the collection of states and municipalities and a fiscal reform that allows increasing tax revenues to allocate more resources to the states and municipalities of the country.