La Jornada: Fiscal policy helped reduce the income gap

In six years, Mexico reduced the gap between people who earn the most income and those who earn the least, and it is largely explained by the increase in the minimum wage; Furthermore, the reduction in this inequality had greater scope with the collection of taxes and the distribution of public spending, such as the policies with which the State intervenes to redistribute, according to official information.

By itself, the gap between people who belong to the 10 percent of the population with the highest income and those from the decile with the lowest income was reduced by 5.3 percentage points between 2018 and 2024, according to data from the National Survey of Household Income and Expenditures (ENIGH), which is carried out biannually.

Without taking into account the impact of fiscal policy on the distribution, in 2018, of every 100 pesos of national income, people in decile

That same comparison showed that in 2024 of every 100 pesos of income, 27.5 would go to people in decile X and 2.8 pesos would go to the opposite decile.

Thus, the gap was reduced in six years, but even with this, what the highest-income population captures is 9.8 times more than what is earned by those who are among the 10 percent with the lowest economic income.

Diego Merla, coordinator of Oxfam Mexico’s Tax Justice strategy, explained that this data, which “is just the income before the State intervenes, before it collects taxes or transfers money through social programs and other public policies,” accounts for the impact of the increases in the minimum wage, being the policy that has had the greatest impact on the fact that income is distributed more fairly.

The tax return

This reduction in income inequality solely due to market conditions is the starting point, but fiscal policy also participated, show the reports on Distribution of tax payments and receipt of public spending by deciles of households and individuals, published each year by the Treasury.

In the most recent, from 2026, the agency recovered the ENIGH data to highlight that, once the effect of taxes was taken into account, the participation of people in decile

In 2018, once the effect of taxes was taken into account, 28.3 pesos out of every 100 of national income remained among the citizens with the highest monetary income, while the 10 percent with the lowest income only kept 2.6 pesos out of every 100.

On the spending side, where transfers by social programs are also integrated, while each of the people who are in the decile with the highest income captured 26.3 pesos out of every 100 in 2018, by 2024 a reduction was recorded to 23 pesos. Among the population in decile I it went from 3.4 to 4.3 pesos.

With these figures recorded in its reports, the Treasury pointed out: a redistributive role of fiscal policy can be inferred, attributable both to the progressivity of the tax system, where households with greater resources contribute to a greater extent, and to the public spending policy through which resources are redistributed to the population in the lower income deciles.

Merla stressed that it can be confirmed that through spending and social transfers a greater impact can be seen on the distribution of income, which has allowed more than 13.4 million people to escape income poverty. “It is clearly a positive result,” he acknowledged, but the problem is on the tax side, he considered.

Above all because a redistribution policy does not only focus on income, which is a flow, but also because it has to be directed at reducing wealth inequality, which is where accumulation really is.

Merla emphasized that the data, as captured so far, undervalues ​​inequality, given that in decile

He noted that in the data reported by the Treasury you can “observe some of the effect of having placed more emphasis on collecting debts from large taxpayers.”

However, as long as the tax structure is not changed, “there will be no greater impact of the tax system on reducing inequalities and better distributing income.”