A group of House Republicans has introduced a bill that would tax the remittances of immigrants trying to send money back home. The proceeds would go to construct President Trump’s border wall.
Trump had mentioned during the campaign that taxing remittances was one way to fund the wall. Now, since there doesn’t appear to be much chance that funding for the wall will come from the budget bill being considered that would keep the government operating after the end of this month, the president’s choices on how to fund construction of the barrier have narrowed considerably.
Estimates vary, but remittances from those in the U.S. to their relatives back home could top $130 billion a year. A 2 percent tax could net more than $2 billion a year if it applied to all money regardless of who’s sending it.
“This bill is simple — anyone who sends their money to countries that benefit from our porous borders and illegal immigration should be responsible for providing some of the funds needed to complete the wall,” Rep. Mike Rogers, Alabama Republican, said in a statement. “This bill keeps money in the American economy, and most importantly, it creates a funding stream to build the wall.”
Mr. Rogers and Rep. Lou Barletta of Pennsylvania are leading the effort.
Mr. Trump has vowed to make Mexico foot the bill for his border wall, but Mexican authorities have said they won’t play along.
Left without a funding source, the president has said American taxpayers will pick up the tab for now, and he’ll look for ways to soak Mexico in the long run.
The World Bank puts remittances from the U.S. at more than $50 billion a year. A Pew Research Center analysis puts the figure at $133 billion in 2015.
Mexico is one of the biggest beneficiaries, with $24 billion alone going from the U.S. to its southern neighbor in 2015, making it one of Mexico’s top sources of income. China and India rounded out the top three countries.
Remittances also account for a huge percentage of the economies of Central American countries.
The U.S. has one of the lowest costs to send money home, at about 6 percent of the payment. Canada’s rate is twice that, while the world’s other big economies hover around 8 percent.
Mr. Trump during the campaign hinted at remittances as one option for footing the bill for his border wall.
But his plan was convoluted, calling for rewriting regulations governing wire transfers and then using it as a threat to force Mexico to cut a check.
Mr. Trump also threatened to cancel visas, hike fees on visas issued to Mexicans or impose a tariff on Mexican goods imported into the U.S. as ways to force Mexico to play ball.
The new congressional bill is much less complicated and would collect funds not just from Mexicans.
If the money from raising fees on remittances would have been earmarked for some pet Democratic program, you can bet the opposition would be lining up to vote for it.
But since the proceeds will go to fund the wall, we will hear wails of anguish from Democrats about how “unfair” it is. The same will go for any other schemes Republicans come up with to pay for the barrier along our southern border.
Raising the tax rate on remittances to match those of other countries shouldn’t be controversial. But this is not about remittances; it’s about the wall and Democratic obstruction of a major part of the president’s agenda for which he was elected.