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  • Taxes, Not Tequila: A Refresher Course On Cinco De Mayo

Taxes, Not Tequila: A Refresher Course On Cinco De Mayo

Kelly Phillips ErbJune 5, 2015

Happy Cinco de Mayo!
Contrary to popular belief, Cinco de Mayo isn’t Mexican Independence Day – that’s on September 16 (be sure and drop that casually tonight over tequila shots and margaritas and you’ll sound super smart). It is, instead, the anniversary of the Mexican army’s victory over France at the Battle of Puebla during the Franco-Mexican War in 1862.
Mexico, like the United States, struggled to find its footing after it won independence. After trying a number of different kinds of governance, the country divided more or less into two parties, the Liberals and the Conservatives.
Conservatives tended to side with the policies of the former European rule, including a number of privileges for the Catholic Church. Among those privileges: exemptions from tax. In contrast, the Liberals weren’t keen on the granting the Catholic Church any special privileges and sought to limit them.
In the mid-19th century, the Liberals rose to power. Part of their agenda included passing a number of “Liberal Reform Laws.” The first of those laws, called the Juárez Law (named after Benito Juárez, the Minister of Justice), was meant to restrict the authority and scope of the Church courts. A second law, the Lerdo Law (named after Miguel Lerdo de Tejada) allowed the government to confiscate Church land and – you guessed it – tax it. Another law, the Iglesias Law (named after José María Iglesias, not Julio), further restricted the clergy.
As you can imagine, as more and more laws were passed restricting the rights of the Church (which was linked closely to the military), the Conservatives became agitated. Eventually, the two factions went to war. The civil war happened at roughly the same time as the one in the United States which would have significance here at home (trust me, keep reading).
Wars, of course, are expensive. And while most of Europe was happy to stay out of conflicts in the Americas, they weren’t keen on losing resources, including money. So when then President Mexican Benito Juárez defaulted on a series of debts in 1861 owed to European countries, they sent the equivalent of armed thugs to make sure they got paid. Eventually, Britain and Spain negotiated a deal and went home but France stayed, determined to make a statement and some inroads into what they saw as an opportunity. Despite being better funded and making initial inroads, France was unable to press too far in the country. A seemingly insignificant battle in Puebla de Los Angeles on May 5, 1862, was a symbolic victory for Mexico: it emboldened a poor, beleaguered resistance movement into believing that they could triumph. Mexican historian and philosopher, Justo Sierra, wrote, about the day:

its moral and political results were immeasurable. The entire nation was thrilled with enthusiasm. Surely no Mexican, whatever his party, was downcast by the victory. The remotest Indian village felt the electric current of patriotism that sped like lightning through the land, awakening many a sleeping conscience. The people were inspired to make a supreme effort.

Ironically, despite the fervor, the battle didn’t end the war. It actually raged on for at least another year. France eventually captured Mexico City and imposed their own ruler for three years (he was eventually ousted by the Mexican resistance).
Today, Cinco de Mayo is celebrated throughout the United States perhaps more than in Mexico (it’s generally a normal day in Mexico, except in the State of Puebla – most government offices remain open). The United States likely benefited more from the battle than did Mexico: the French were so occupied with Mexico that they were not able to significantly fund or assist the Confederacy during the U.S. Civil War, despite having the best of intentions. Since the French were sympathetic to the Confederacy, had the French taken Puebla easily in 1861, freeing up resources, the entire course of history might have been changed.
So, it all comes down to power and money and taxes – like most conflicts these days. Ponder that over a nice plate of nachos tonight.
Salud!

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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