By Adolfo Garza

Associated Press Writer

November 24, 1998

MEXICO CITY (AP) -- A Mexican budget proposal that raises taxes to

compensate for falling oil revenues and a pay off a $55 billion bank

bailout was blasted by all sides Tuesday -- even from President Ernesto

Zedillo's own ruling party.

The government recently increased gasoline prices by 15 percent; it has

also proposed a 2 percent increase in sales taxes and a new 15 percent tax

on telephone service.

The proposed federal budget projects $102 billion in spending for 1999.

During a hearing in the opposition-dominated congress, legislators mocked

Zedillo's 1994 campaign slogan, "Well-being for your family."

"Zedillo's economic policy appears to seek the ill-being of families,"

said Rep. Jose Luis Sanchez Campos of the leftist Democratic Revolution

Party.

Even legislators from Zedillo's Institutional Revolutionary Party, or PRI,

described the tax proposals as grossly unfair to Mexican workers.

PRI Rep. Efren Enriquez Ordonez said Zedillo's proposal "has nothing to

offer to the labor sector."

Treasury Secretary Jose Angel Gurria defended the government's budget,

saying 82 percent of the new tax burden "would come from the 10 percent

of the population with the highest income."

Legislators also criticized Treasury officials for proposing fines of up

to $30 for consumers who fail to request a sales tax receipt -- a proposal

aimed at preventing businesses from failing to charge taxes.

Copyright 1998 The Associated Press