A 2008 SAM and AGEM of Mexico and the case of taxes on hydrocarbons extraction

Available from: 
March 2015
Paper author(s): 
Gaspar Núñez Rodríguez (El Colegio de México, Centro de Estudios Económicos)
Topic: 
Fiscal Policy - Public and Welfare Economics
Year: 
2015

This paper has three goals. First, to build and publish a transparent Social Accounting Matrix, based on the 2008 Input-Output Table of Mexico. Second, to develop a parsimonious Applied General Equilibrium Model (AGEM), which can be modified, and applied to other research purposes. And third, to apply this AGEM to the analysis of taxes on hydrocarbons extraction, given their importance for public budget and recent energy reforms. Specifically, we analyze an increase in Households Income Taxes that would collect the same amount of money, while we diminish taxes on hydrocarbons extraction. Our main results show that income tax would have to triple in order to compensate for diminished taxes on hydrocarbons extraction, and that the first four deciles would benefit with a positive HEV (given the progressive structure of the Income tax), but deciles from V to X would suffer a severe loss, which would overcome low income deciles gains by far.

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