BAJA CALIFORNIA.- Chris Lopez, who represents Baja California in the Mexican lower house of Congress, did not make himself any new friends among his constituents after describing most of them as "mediocre" in a local news clip, just because people still gripe about the increase in the Value Added Tax (VAT) rate along the border.

[p]The representative was heavily criticized in October 2013, when he voted in favor of a fiscal reform bill that included an increase to the VAT along the border. The border region previously had a VAT of 11% in contrast to 16% throughout the country, as a way to make the region more competitive with U.S. border cities that typically have sales tax rates of less than 10%.

The measure, commonly referred to as the VAT "homologation" as it brought the border region in line with the rest of the country, was a widely unpopular proposal among Baja California constituents.

Leading up to and subsequent to the passage of the fiscal reform bill, many business groups led social campaigns to attempt to revert the effects of the new law, including via a legal measure known as a collective "amparo", which is a form of constitutional relief. Many of these efforts continue underway, and the negative effects of the VAT increase continue to appear in headlines in the region as a contributing factor to the declining economy in the state.

Chris Lopez states that these groups "need to look forward....mediocrity cannot take hold of us, and we cannot stand still waiting to see what happens. This country needs people to work on what is next, and not be stuck in the past".

After the bill was passed, the Representative gained the nickname "Chris 16 Percent Lopez" and was heavily criticized in the press and over social media. Lopez is the federal coordinator of the PRI (Institutional Revolutionary Party) for Baja California, which is the same party that President Enrique Peña Nieto is a member of. The vote was widely interpreted as a way to toe the party line on a bill that was passed down from the presidency. After the vote, Rep. Chris Lopez claimed that he voted against the "homologation" reserve, but voted in favor of the bill as a whole because it contained other beneficial measures.

In this same video segment, Tijuana Mayor Jorge Astiazaran - who is also a PRI party member --refutes Chris Lopez's stance, by saying that "it [the VAT increase] did harm us....it hurt our city too. We can't bury our heads in the sand... I am a PRI member, but I am the mayor of all Tijuanenses and the reality is that the majority was harmed by this measure. On a day-to-day basis I see the effects on the streets, and how, every day, more and more, people need more economic support."

According to a study conducted by the the highly regarded think tank, Colegio de la Frontera Norte (COLEF in conjunction with Baja California's State Government , the acquisitive power of Baja California families was reduced by 30% as a result of the measure this year alone. However, Chris Lopez dismisses this study as insufficient, stating that it is "just one study".

Meanwhile, this weekend, there were reports of pedestrians waiting four hours to cross the border to go Christmas shopping in San Diego. Said one border crosser, "we have been in line around four and a half hours and there are times when the line doesn't move at all, but it is still worth it because things are better and cheaper to buy [in San Diego] than here in Tijuana.

More than six billion dollars is spent in California by border residents in each year, and this figure is expected to increase to approximately 7 billion dollars this year as a result of the 16% VAT increase, according to the National Chamber of Commerce. Increased consumer spending in the U.S. comes in light of the fact that the value of pesos to dollar has decreased to its lowest level since 2009,

with the exchange rate reaching almost 15 pesos per dollar.

Via: STMedia.net

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