THE WORLD - Political compromise makes it a win-win day in Mexico - Congress passes tax measures sought by Calderon's party and electoral reforms wanted by leftist rivals.
MEXICO CITY — Mexico's legislature approved major overhauls of the nation's tax and election laws Friday, untangling a months-long stalemate that had threatened to make the country ungovernable in the wake of last year's bitterly contested presidential election.
Longtime rivals crafted the compromise in weeks of highly sensitive talks that gave President Felipe Calderon's conservative National Action Party, or PAN, the tax reform it had sought for more than a decade. The leftist Democratic Revolution Party, or PRD, which accuses Calderon's party of stealing the 2006 presidential election, gained tough new limits on negative campaign advertising and a purge of top election officials.
Friday's votes showed that Calderon is a more savvy political operative than his predecessor, Vicente Fox, who struggled to advance his agenda during his six-year term. A PAN veteran experienced in rough-and-tumble politics, Calderon was willing to compromise with PRD leaders even as they attacked him in public as an "illegitimate" leader.
At the same time, PRD moderates gradually and quietly distanced themselves from defeated presidential candidate Andres Manuel Lopez Obrador, who proclaimed himself Mexico's "legitimate" president after last year's vote.
"With the approval of these reforms, Mexico will be stronger in its public finances and stronger in its institutional life," said Calderon, who declared that he'd sign both sets of legislation.
The tax reform eliminates loopholes in corporate taxes, creates a new tax on cash deposits, and increases the gasoline tax by 5.5%. Analysts said it may allow Mexico to survive a looming fiscal crisis caused by declining production from the country's government-run oil fields, a crucial source of public funds.
The new tax measures are expected to increase government revenue by about 5%, adding about $10 billion annually to the public coffers. Tax collectors will get more funding to crack down on widespread tax evasion, which the newspaper El Universal in an editorial Friday called "the second national sport" after soccer.
The electoral reform seeks to rein in political campaign spending by giving all candidates free access to the airwaves. Supporters of the reform said it would level the electoral playing field. Calderon is widely believed to have won the July 2006 election with a sophisticated and well- financed media campaign that gradually eroded the leftist candidate's large lead in the polls.
