This document reports the results of an applied general equilibrium model built to evaluate the fiscal reform initiative of the Mexican government. Taking public revenues as endogenous and tax rates as exogenous variables, the model incorporates in an explicit manner both the tax structure of...

This article reports the results of an Applied General Equilibrium Model (AGEM) built to simulate a recent fiscal reform initiative of the Mexican government. Treating public revenues as endogenous and tax rates as exogenous variables, the model explicitly incorporates both the tax structure and...

The paper presents a summary of the theory of fiscal decentralization for a federal government. Possible applications of the theory to the case of Mexico are discussed. Finally, a reform consisting of a partial decentralization of the personal income tax is simulated.