Higher taxes and mandates shifting firms to informal economy, Scott Lincicome notes

Higher taxes and mandates shifting firms to informal economy, Scott Lincicome notes
Mexican firms shift due to tax policy

Scott Lincicome highlights concerns that a mix of higher tax rates, increased minimum wages, and more government-mandated vacation days in Mexico may be prompting smaller businesses to leave the formal sector for the informal economy.

He points to this combination of policy changes as a key factor impacting the country's business environment.

Lincicome has previously criticized rising costs tied to government policies. He has flagged the increasing expense of farm subsidies and cited a 45 percent improper payment rate in the Emergency Conservation Program as wasteful. In a separate analysis, he noted European buyers are avoiding long-term contracts for U.S. LNG, causing developer frustrations. These examples reflect his ongoing focus on the unintended effects of regulatory decisions.

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