Taxing Remittances Can Build the Wall
Leaders of a caravan of Central American migrants traveling toward the United States through Mexico have repeatedly accused the Honduran government of corruption and with failing to address the poverty, crime and economic conditions forcing families to flee by the thousands.So it shocked some observers when the Honduran ambassador joined the migrants protesting outside the Honduran embassy in Mexico City on Wednesday, and then accepted their invitation to walk 9 miles to a migrant shelter."I have been ordered by my government to support the Honduran migrants traveling with the caravan. There are about 200 Hondurans who we will help out with paperwork and whatever is necessary," Alden Rivera Montes, the Honduran ambassador to Mexico, told El Universal.
Within the span of a few short decades, migrants have become an essential engine of economic support for Honduras. Remittances comprised 17 percent of the nation's gross domestic product (GDP) in 2011, according to World Bank estimates, the second largest share of any country in Latin America or the Caribbean. As such, Honduran emigrants have tremendous significance for the country's economy and for the sustenance of many otherwise impoverished communities and families.
Rep. Mike Rogers (R-Ala.) sponsored a bill in March that would slap a 2 percent tax on all money transfers from the United States to Mexico, Central America, the Caribbean, and South America.If Rogers expanded the idea to include all transfers to countries outside of the United States, it would generate $2.76 billion, based on the 2016 remittance totals."Over 10 years, there it is," Chmielenski said. "There's your wall."
Immigrants in the United States in 2016 sent home more than $138 billion – a sum that exceeds the entire gross domestic product of Kuwait – according to a new report from the Pew Research Center[.] ..."It's a staggering number," said immigration reform activist Chris Chmielenski, marveling at the $138.2 billion that immigrants wire out of the United States.
President Trump is mulling a tax on cash transfers between immigrants in the U.S. and their relatives in Mexico as a way to fund his promised border wall without forcing American taxpayers to open their wallets, according to sources familiar with the proposal.Trump first floated the idea of taxing or halting person-to-person wire transfers, known as remittances, during his bid for the White House. A two-page memo released by his campaign last April described a plan "to compel Mexico to pay for the wall" by preventing immigrants from wiring money outside of the U.S. unless they can prove their legal status to law enforcement authorities.Because the Mexican economy has become so dependent on wages sent home by migrant workers, which surpassed oil revenues as its leading source of foreign income in 2015, Trump said he could convince the country's leaders to make a "one-time payment of $5-10 billion" toward his border wall by threatening to stop the annual flow of billions of dollars from the U.S. to Mexico in the form of cash transfers.
President Donald Trump's border wall only needs to stop about 10 percent of illegal crossing in order to pay for itself, according to an analysis by the Center for Immigration Studies. The estimated $12 to $15 billion cost of the wall would quickly be offset by the savings to the government if fewer illegal immigrants arrive in the country over the next decade, CIS found. Only a small portion of the population of people who are expected to attempt an illegal crossing in the next decade – between 9 and 12 percent – would have to be stopped for the wall to totally pay for itself.The analysis from CIS, a group that advocates for moderating immigration levels, relies on fiscal estimates from the National Academies of Sciences, Engineering and Medicine (NAS) for the average cost to taxpayers of illegal immigrants [sic]. NAS estimates one illegal immigrant [sic] costs state and local governments approximately $75,000 in a lifetime, taking into account taxes paid and the cost of providing benefits such as education and health care.