Conflict & Justice

Taxes and the drug war


A member of youth Human Rights organizations holds a sign reading "Enough" during a protest against violence in Guatemala City, on Feb. 8, 2011.


Johan Ordonez

There tends to be a lot of gore and sensationalism in stories about the Mexico drug war.

But for a more academic take, check out this article from the Council on Hemispheric Affairs on the link between taxation and insecurity.

The gist of the argument: In Central America, tax revenue comes in at a notoriously low level. Consequentially, Central American states routinely have limited funds to combat the security threat posed by the rapidly expanding Mexican drug wars.

A few highlights from the article:

  • Tax revenue represented 13.53 percent of GDP in 2010 in El Salvador, Guatemala and Honduras. In Chile, it was 18.6 percent. In the United States, it was 26.9 percent.
  • Says Costa Rican ombudsman Ofelia Taitelbaum: “Tax evasion is the national sport.”
  • The tax code favors wealthier citizens by imposing indirect taxes on goods purchased, rather than direct taxes on income, property and capital.
  • The conclusion: "For Central American governments to have even the slightest chance of mitigating drug-related violence, they must find a way to raise tax revenue."

This has made Central America a deadly place to be of late. Check out the homicide map above, and read a few anecdotes from the ground:

  • Private guards outnumber policemen 7 to 1 in Guatemala. There are no standards for minimum training, age or experience for the guards, most of whom come from rural areas and don't have better than a sixth-grade education.
  • In most countries, an armed attack on a public bus on the country’s busiest highway might be considered front-page news. In Guatemala, bus attacks and other violent crime scenes occur with such frequency that journalists often debate about which to cover.

Follow Stephanie on Twitter: @stephaniegarlow

Read more: The ingenuity of Mexico's drug traffickers