%0 Journal Article
%T REVENUE ELASTICITY OF THE MAIN FEDERAL TAXES IN MEXICO
%A Felipe J Fonseca
%A Daniel Ventosa-Santaularia
%J Latin American Journal of Economics
%D 2011
%I Pontificia Universidad Cat¨®lica de Chile
%X An inelastic tax system increases the uncertainty associated with tax revenue collection. This results in continuous short-term adjustments to maintain the stability of tax collection. In this paper, we estimate the revenue elasticity of the principal taxes in Mexico, finding a much greater elasticity than that found in previous studies. A cointegration model between the revenue and taxes is used which satisfies strong exogeneity, providing a basis for congruent and reliable projections. Using this model, the tax revenue projected for 2011 is much lower than the estimates prepared by Mexico's federal government.
%K Federal taxes
%K long-term revenue elasticity
%K cointegration
%K strong exogeneity
%K forecasts
%U http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100004