Remittance Tax to Fund the Wall?
By Dan Cadman, January 23, 2017
The recent news tidbit that President Trump's transition team had asked what money and infrastructure capabilities might be available to begin the promised border wall (or, more probably, high-tech fencing) promptly fed speculation that he would back off the assertion that "Mexico will pay for it." I'm betting my money on the likelihood that the source will be taxes or penalty fees levied on remittances: funds being sent out of our country by aliens, often illegal aliens who send a portion of the wages from their unauthorized employment back to their home countries, usually to support family.
Laudable as this may be from the context of personal and familial responsibility, Americans need to realize, first, that once the money has left our economy, it is gone forever; and second, that we're not talking about chump change, we're talking about tens of billions of dollars each year. The exact amount is unknown, because U.S. data collection on remittances has not been completely reliable.
In a one-step-removed sense, taxing remittances would in fact be a levy against the Mexican state since it relies so heavily on that money as a part of its annual economy. For instance, in 2015 Mexico received more income from remittances, overwhelmingly from the United States, than it did from its oil revenues. From my perspective, the heavy reliance on remittances has permitted Mexican politicians and business leaders to sidestep many of the institutional changes needed to better life for ordinary Mexicans so that they don't have to think about the trek north to achieve financial stability.
http://cis.org/cadman/remittance-tax-fund-wall
