Extreme Wealth in Mexico and Latin America
Also in this edition: Sheinbaum suggests fracking. Academics and activists for Palestine. Soccer opens the door to big business.
Lea La Jornada Internacional en español aquí.
The 4T, Anti-Neoliberal but Not Anti-Rich
“There were too many years in our country that governments looked out for only a very few; at least 36 years of what we call the ‘neoliberal period,’” President Claudia Sheinbaum reiterated this month. And this week, a new report shows the results of that period: over the past 26 years, the wealth of Mexican billionaires has increased by more than 400 percent, while the wealth of the poorest half of the population has remained virtually stagnant.
Inequality is still present today: the richest one percent in Mexico holds 43 percent of the country’s wealth, while the poorest 50 percent accounts for just 2 percent of total wealth. Carlos Slim Helú and his family alone control $125 billion; Germán Larrea and his family, $67.1 billion; and Alejandro Baillères and his family, $19.5 billion. Altogether, Mexican magnates make up 20 percent of the ultra-wealthy in Latin America.
“It is time to tax extreme wealth in Mexico and Latin America,” writes Gabriel Zucman, founding director of the International Tax Observatory, in La Jornada. The professor at the Paris School of Economics and the University of California, Berkeley, who developed a proposal to tax the ultra-rich for Lula and the G20, explains that in Latin America, the richest 10 percent receives around 50 percent of national income, while the poorest half gets just 8 percent.
The Tax Systems Are No Help
Across the region, tax systems do little to reduce inequality and, in many cases, actually worsen it. The poorest 50 percent of Latin America’s population pays about one-third of its income in taxes, mainly through consumption taxes. By contrast, the richest 1 percent pays, on average, around 22 percent.
In Mexico, the poorest 50 percent pays an effective tax rate of 24 percent, while the richest 10 percent contributes 16 percent and the top 1 percent pays just 12 percent. Mexico’s tax system ranks it as the country with the lowest tax revenue as a share of GDP within the Organization for Economic Cooperation and Development (OECD): 18.3 percent, compared with the group’s average of 34.1 percent.
The Mexican government reports that the tax revenues are increasing, and in 2025 tax revenues will reach a historic high of 15.1 percent of gross domestic product (GDP). “Revenue is increasing due to efficiency, formalization, and better enforcement—not because of new broad-based taxes,” the finance secretary explained. After La Jornada published Zucman’s article, Sheinbaum was asked whether the government is considering introducing a new tax on large fortunes. She said it is something that merits analysis, but that for now, “we are not considering it as part of a broader tax reform.”
Zucman’s proposal, a minimum effective tax of 2 percent for individuals with wealth exceeding $100 million, sparked political debate over fairer taxation in countries such as France, Spain, the Netherlands, Denmark, and Sweden. In the United States, California could put a tax on the ultra-wealthy to a referendum in November; meanwhile, in New York, Zohran Mamdani has proposed taxing millionaires more heavily to fund social programs for the majority.
The Quote:
“Look, Bartola, I’m leaving you these two pesos. Pay the rent, the phone, and the electricity. From what’s left, take your spending money; and save the rest for me, so I can have my little drink.”
—Peso sobre peso (La Bartola), by Chava Flores
In Case You Missed It
◻️ Cuba: Aún nos queda el alma and the poetry of resistance. The project by photographer Luis Casadevall presents images drawn from an archive of more than 65,000 photographs taken in Havana over more than a decade.The photos focus on what is essential: what is not always seen, but what defines a community, and reveals the everyday dignity of a people who are marked by history, and at the same time deeply resilient. The photographs are part of PhotoEspaña, whose theme this year is “Imagine Again.” To be able to write poetry that is not political/ I must listen to the birds./ And to hear the birds/ the warplanes must be silent, quotes Rosa Miriam Elizalde from Cuba, citing the Palestinian poet Marwan Makhoul, when commenting on the role of poets and musicians (Carpentier, Guillén, Silvio, and others) in countries like hers, under siege by empires.
◻️ Universal health service in Mexico. President Claudia Sheinbaum Pardo announced plans to create a new universal health service that will initially operate in 24 of the country’s 31 states. Starting with people aged 85 and older, the president stated that the goal is that by the end of her administration, any person, regardless of which health institution they are registered with, will be able to receive care at any hospital, as well as access medications, medical tests, and diagnoses, among other healthcare services across the three public health systems. Mexicans living abroad will also be issued credentials for the universal health service, she said.
◻️ Sheinbaum proposes fracking. To address dependence on imported natural gas from the United States (which accounts for 75 percent of national consumption), the federal government is considering the extraction of “unconventional” sources of this fuel through hydraulic fracturing (fracking). President Sheinbaum argued that new technologies reduce the environmental impact and announced a committee of specialists who will analyze the options and evaluate an investment scheme that includes the private sector. However, environmental organizations warn that the initiative is very high-cost and will perpetuate dependence on hydrocarbons. Analysts such as Julio Hernández question whether the official argument on the issue is the result of discussions with international investors, and experts note that the initiative will require private investment and technology.
◻️ Academics and activists with Palestine. The collective Academics with Palestine Against Genocide condemns several Mexican universities and educational centers that continue to maintain collaborations with the State of Israel. “Breaking academic relations with the State of Israel is not merely a political or situational decision; it is a matter of ethical choices in the face of a barbarity that is directed both at Palestinian higher education institutions and directly against students and professors who have been killed,” write Márgara Millán and Juan Trujillo Limones. In other news, a Mexican contingent joined the 1,000 activists from 70 countries participating in the new Global Sumud Flotilla, whose nearly 80 vessels departed from Barcelona in April to break the blockade of Gaza, reports Arturo Landeros.
◻️ Chico Buarque supports Cuba with “Sueño con serpientes,” alongside Silvio Rodríguez. His visit to the island strengthens the ties between two iconic figures of the still new Latin American Song movement. “In the midst of the tightening of sanctions against the island and the worsening economic and energy crisis, this trip is a show of solidarity with the Cuban people,” the Brazilian singer and songwriter writes on his social media.
◻️ Soccer opens the door to big business. “The major clubs are presided over by magnates and businesspeople. Several of the major European clubs are owned by investment funds from Middle Eastern countries,” explains Roberto González, coordinator of Economics at La Jornada. “These countries invest in soccer because it is the gateway to major business deals and political relationships. It would be very interesting to know all of the business deals.” ▶️ VIDEO
🎧 What We Are Listening To
Ya se murió el angelito. Óscar Chávez and Amparo Ochoa
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Edited by David Brooks and Jim Cason in the United States, Tania Molina Ramírez in Mexico City, of La Jornada, and Elizabeth Coll in Tokyo, under the direction of Carmen Lira Saade and Guillermina Alvarez. More information.