Why inheritance taxes remain controversial in Mexico

This blog post is based on an article published in the Journal of Social Policy by Raymundo M. Campos-Vazquez, Camilo A. Cepeda-Francese, Alice Krozer, and Aurora A. Ramírez-Álvarez.

Inheritance taxes and inequality in Latin America

Latin America has historically been one of the most unequal regions in the world, both in terms of income and wealth. The tax system, which usually plays a key role in reducing inequality in developed countries, does little to change this situation in most countries in the region, leading many experts to advocate for tax reforms aimed at increasing revenue collection and enhancing tax progressivity. In this paper, we explore the determinants of support for the reintroduction of an inheritance tax in Mexico, which existed from the 1920s until its abolition in the 1960s after prolonged ideological debates.

While some studies in developed countries find that inheritance taxes are among the least popular forms of taxation, there is limited evidence from middle-income countries such as Mexico. We examine public attitudes toward two hypothetical inheritance tax scenarios: a universal tax and a progressive tax that applies only to inheritances exceeding USD 1 million (PPP-adjusted). Our findings suggest significant variation in support between the two, with clear preferences for progressivity and cultural factors that differ from those in high-income contexts.

Public support for inheritance taxes in Mexico

Figure 1 shows the level of support for these two hypothetical taxes. Only 13.3 percent of respondents agree moderately, very much, or completely with an inheritance tax without a threshold. Support is much higher for the inheritance tax with a threshold in place, with 41.8 percent of respondents agreeing moderately, very much, or completely.

Figure 2 shows the perceptions of the legitimacy of inherited wealth, the role the government should play in intergenerational transfers of wealth, and whether it is fair to tax inheritance. Respondents regard inherited wealth as just as deserved as self-made wealth (54.1 percent agree moderately, very much, or completely with this statement). An even greater majority (73.4 percent) do not believe the state should interfere with wealth transfers between parents and their children. Accordingly, most people do not believe an inheritance tax would be just: only 25.5 percent agree moderately, very much, or completely with the idea. These findings are inconsistent with what sociologist Jens Beckert has described as an “equality of opportunity” orientation toward inheritance. Most respondents perceive inheritance as fair and are not convinced that the government should intervene.

Figure 3 analyzes the determinants of support in greater detail. Consistent with studies in high-income countries, our results show that trust in government plays a critical role in shaping attitudes toward the tax without a threshold, suggesting that distrust in government diminishes support for the tax. In the case of support for the progressive tax, perceptions of tax evasion among the wealthy are the strongest predictors of support, a finding that has not previously been documented in developing-country contexts. Greater evasion by this group seems to foster perceptions of unfairness, thereby increasing support. Concerns about inequality and tax evasion by the poor show similar coefficients but with opposite signs. In sum, support for the two types of inheritance tax appears to be shaped by different factors. Self-interest factors, such as the amount considered appropriate for a person to inherit, and trust in government drive support for a tax without a threshold, while peer effects, concerns about inequality, and self-interest factors shape support for a tax with a threshold.

Family values and inherited wealth

Most respondents do not appear to subscribe to an “equality of opportunity” view of inherited wealth. None of the variables traditionally associated with fairness concerns were significant. This runs counter to findings from developed countries and suggests that other value orientations, such as the “family principle”, may play an important role in shaping support for the tax. Family plays an especially important role in Latin American cultures, not only in social life but also in social security. Due to the high prevalence of labour market informality, many people do not have access to pensions and other forms of welfare through public or private institutions, a deficit which is commonly remedied through care work and “social security” within the family.

Tax evasion and support for redistribution

We also find that support for progressive taxation is affected by perceptions of tax evasion across classes. People who perceive higher levels of evasion by the upper classes have greater support for the tax, while perceptions of evasion by the poor decrease this support. This finding is consistent with Traxler’s argument that tax morale is shaped by the behaviour of reference groups. To our knowledge, this effect has not previously been documented empirically. In highly unequal societies like those in Latin America, conditional cooperation may be mediated by considerations of social class and could be an important factor in explaining support for taxation. This could also be an avenue for further research.

Reference

Campos-Vazquez, Raymundo M., Camilo A. Cepeda-Francese, Alice Krozer, and Aurora A. Ramírez-Álvarez. 2026. “Determinants of Support for Reintroducing Inheritance Taxes in Mexico.” Journal of Social Policy: 1–19. doi: 10.1017/S0047279426101317.

About the Authors

Raymundo M. Campos-Vazquez is Professor of Economics at the Center for Economic Studies (CEE) at El Colegio de México, Mexico City.

Camilo A. Cepeda-Francese is a researcher at the Center for Economic Studies (CEE) at El Colegio de México, Mexico City.

Alice Krozer is a Professor at the Center for Sociological Studies at El Colegio de México, Mexico City.

Aurora A. Ramírez-Álvarez is Associate Professor at the Center for Economic Studies (CEE) at El Colegio de México, Mexico City.