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Mexican finance minister calls U.S. tax overhaul 'regressive'

Reuters  |  MEXICO CITY 

By Anthony Esposito

CITY (Reuters) - Mexico's on Thursday labelled the U. S. overhaul passed by in December as "regressive" and said the Mexican economy would remain competitive without sweeping cuts to corporate rates.

The Republican-controlled U. S. defied opposition from Democrats to pass the bill and give his first major legislative victory.

The overhaul cuts taxes for corporations and the wealthy while giving mixed, temporary relief to middle-class Americans.

Cutting the U. S. corporate rate to 21 percent from 35 percent has sparked concern among Mexican companies and some lawmakers that it could lead to less investment reaching Latin America's second biggest economy.

However, argued the changes could make the U.

S. economy overheat and said his government did not want to copy Trump's overhaul.

"It's a very regressive reform: the top one percent of earners will get 40 percent of the benefits," he said at an event in City. "It's not exactly something we want here."

What makes a country competitive is not simply a matter of taxation, said Gonzalez Anaya.

"If that were the case the countries with the lowest take would be the most competitive," he said, citing and as examples in the "They aren't exactly the most competitive countries in the hemisphere."

Still, automaker Chrysler said shortly after Gonzalez Anaya spoke that the U. S. overhaul had partially enabled the company to boost investment in its U. S. and grant a bonus payment to workers.

The said that since the is near full employment the overhaul's impact on economic activity would be "limited". It could, however, make it overheat, he added.

"That would force the Federal Reserve to act more quickly than it's been doing up until now," he said.

(Editing by Dave Graham)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 06:45 IST