Mexico’s New Tax Law Could Chill Its Economy, Hurt US Trade Relationship

From The Daily Signal.com (Nov. 21):

A new tax law approved last month by the political party of Mexican President Andres Manuel Lopez Obrador—which holds absolute control of the Mexican Congress—gives the government the right to seize land and assets without legal due process in certain tax evasion cases.

These new fiscal enforcement measures could damage Mexico’s economic freedom as well as its economic growth and its trade relations with the U.S.

Under U.S. federal statutes, tax evasion is a Class E felony, the lowest category of felonies—just above a Class A misdemeanor. By contrast, murder is a Class A felony in the United States, the highest category. Furthermore, prosecution of all federal crimes must be according to due process.

Opponents of the new Mexican law, however, assert that tax evasion has now been categorized as the equivalent of much higher felony classes, along with such grave infractions as organized crime, narcotics trafficking, corruption, and even homicide. 

In answer to a reporter’s question about those concerns at one of his daily morning press conferences, Lopez Obrador defended the new law by saying: “Nothing to hide, nothing to fear.”

Certainly, Lopez Obrador is right to fight against Mexico’s deeply rooted corruption, and tax evasion in the country is a well-known and long-standing problem.

But Mexican business leaders are deeply concerned by the authority the new law gives the government to suspend the presumption of innocence and seize assets prior to any legal due process. [read more]

Well, the new president is a socialist. What did you expect.