A tax on remittances is the smart and easy way to pay for Trump’s wall, particularly given what’s coming in Mexico.
We probably should have had this conversation a long time ago, and it probably should have been U.S. policy for quite some time, that the remittances from non-American citizens to relatives — or whoever — living outside the country be taxed to pay for efforts to keep illegal aliens from invading our shores.
It turns out that remittances from expatriates living in America constitute the number one source of hard currency into the Mexican economy, with some $30 billion being transferred across the border. Now — $30 billion isn’t all that much where the massive U.S. economy is concerned; the $71 billion trade deficit the U.S. ran with Mexico last year dwarfs that number.
But that figure stands up as something that can be remediated by policy, because let’s face it — money being sent directly from America to Mexico by immigrants who might largely be here without the permission of the American people is indefensible as a cost of American policy.
Enter Donald Trump, who as the American president has made a wall at the border a primary piece of U.S. policy; the cost of which is estimated at $18 billion.
This actually gets pretty easy. Paul Sperry’s column at the New York Post, quoting from Steven A. Camarota, director of research at the Center for Immigration Studies, had some convincing numbers…
Federal data shows that a wall would work. A two-story corrugated metal fence in El Paso, Texas, first erected under the Bush administration has already curtailed illegal border crossings there by more than 89 percent over the five-year period during which it was built.
Absent a wall, the Homeland Security Department forecasts an additional 1.7 million illegal crossings at the US-Mexico border over the next decade.
If a wall stopped just 200,000 of those future crossings, Camarota says, it would pay for itself in fiscal savings from welfare, public education, refundable tax credits and other benefits currently given to low-income, illegal immigrants from Mexico and Central America.
If a wall stopped 50 percent of those expected crossings, he says, it would save American taxpayers a whopping $64 billion — almost four times the wall’s cost — to say nothing of the additional billions in federal savings from reduced federal drug interdiction and border-security enforcement.
Camarota explains that illegal border-crossers from Mexico and Central America — who account for more than 75 percent of the illegal immigrant population in the US — are overwhelmingly poor, uneducated and lack English language and other skills. In fact, the average Latino illegal immigrant has less than a 10th-grade education. That means if they work, they tend to make low wages; and as a result pay relatively little in taxes while using public services. And if they have children while in the US, they more often than not receive welfare benefits on behalf of those US-born children, who have the same welfare eligibility as any other citizen.
“A large share of the welfare used by immigrant households is received on behalf of their US-born children,” Camarota said. “This is especially true of households headed by illegal immigrants.”
Therefore, illegal border-crossers create an average fiscal burden of more than $72,000 during their lifetimes, Camarota says. Including costs for their US-born children, the fiscal drain jumps to more than $94,000.
Sperry is talking about welfare costs, which obviously are what could be saved with fewer illegals on our shores. But what’s more obvious are the costs associated with illegals — and non-illegals — shipping money back to Mexico, whether the money to back those transfers comes from Uncle Sam’s welfare state or not.
This is a significant issue we as Americans need to understand, absent the usual partisan political profligacy. Victor Davis Hanson, in a National Review column last week everyone should read, set the scene perfectly…
Why the U.S. government does not tax remittances and why it does not prohibit foreign nationals on public assistance from sending cash out of the country are some of the stranger phenomena of the entire strange illegal-immigration matrix.
There may now be anywhere from 11 million to 20 million illegal aliens in the U.S. America’s open border is the keystone of Mexican foreign and domestic policy. For all practical purposes, Mexico City alone modulates the flow of both Mexican and Central American citizens into the United States — depending on its current attitude toward the U.S.
Mexico plays the same role with the Unites States that North African countries play with Europe, except in the former’s case, it has a deliberate rather than chaotic emigration policy — and uses it as direct leverage over the U.S. Mexico’s sense of immigration entitlement is predicated on the assumption that corporate America wants cheap labor, that liberal America wants voters, that identity-politics activists need constituents, that a liberal elite expresses its abstract virtue by its patronization of the Other — and that until recently most Americans were indifferent.
Conservatives, who object to waves of illegal aliens swarming the border, earn boilerplate slurs that they are cruel, racist, nativist, xenophobic, selfish, and anti-humanitarian. Open-borders liberals, who once expressed opposition to illegal immigration, take their cues from the concrete recent record showing that almost all impoverished immigrants fuel progressive agendas of big government, redistribution, and entitlements that otherwise have run out of gas.
There is a likely winner in the coming Mexican presidential election, namely Andrés Manuel López Obrador, who is alternatively viewed as a Hugo Chavez wannabe or some other sort of populist. What’s known and unmistakable is that Obrador has told Mexicans that it’s their human right to come to America…
Soon, very soon, after the victory of our movement, we will defend migrants all over the American continent and the migrants of the world who, by necessity, must abandon their towns to find life in the United States; it’s a human right we will defend.
That’s a quote from Obrador appearing in El Universal, a Mexican newspaper. You could make the argument that what he’s trying to say is he’ll defend Mexican citizens who happen to find themselves afoul of U.S. immigration agencies without actually encouraging them to put themselves at the mercy of those agencies, but most Americans get the message — Mexico’s likely incoming president is looking forward to accelerating the practice of exporting its poor people to America.
This is not something we are duty-bound to accept or tolerate. It is best described as economic warfare. Maybe the Mexicans are justified in practicing it, but the best response is to act in kind. As in, let’s get every dime we can out of the illegal immigrant invasion.
What’s doable from taxing those remittances? Some states have already gone there…
“In Oklahoma, remittances are taxed $5.00 for the first $500.00 and 1% thereafter, a tax that is deductible when making income tax returns (a tax credit for residents). This means that illegals, who do not file a tax return, do not have the possibility to recover the paid tax. The notice that is posted for remittance user reads:
TAX CREDIT NOTICE TO OKLAHOMA TAXPAYERS
Pursuant to HB 2250, as of July 1, 2009, a drug enforcement and money laundering fee will be attached to each wire transaction in the State of Oklahoma. This fee is $5.00 for the first $500.00 and 1% thereafter. If you file an Oklahoma Tax Return, you may be eligible for a tax credit equal to the amount of the fee remitted. To qualify for the tax credit you must maintain your receipt with the transaction number for the purpose of filing your Oklahoma income tax return.
“In 2016, pursuant to the Annual Report of the Oklahoma Tax Commission (Fiscal Year Ended June 30, 2016), the Wire Transmitter Fee collected was US$12,696,879.25 (http://bit.ly/2mpRr51). The previous year the total was US$ 11,322,558.81.”
The interesting piece about the Oklahoma tax is it’s designed to weed out illegal immigrants based on that deduction. What would that $13 million be when applied to Texas, Arizona, Nevada, or California at the national level?
You already know. It’s more than enough money to fund that wall. And the policy as a whole is more than enough to put paid to this current frenzy of illegal immigration involving children and others who are attempting to exploit U.S. policy for nefarious purposes.
Let’s get nefarious — or at least smart — in our own right. It’s easy. Somebody is going to pay for the mess at the border — let’s at least make the folks causing the trouble be the ones first on the hook.
Andrés Manuel López Obrador (YouTube screenshot)