TAX ON REMITTANCES WON’T FIX IMMIGRATION SYSTEM
Bills being floated in Congress by a handful of Republicans would impose taxes on remittances — money U.S. residents send abroad, usually to relatives — to pay for President Donald Trump’s proposed border wall. The idea is as flawed as Trump’s own ridiculous assertion that Mexico must and will eventually pay for the wall.
Mexico ranks first among nations that receive remittance money, usually by wire transfer, from U.S. residents. In 2015, Mexicans received $24.32 billion in such funds, more than Mexico earned from oil exports. Like almost all U.S. companies, wire transfer services such as Western Union or Moneygram typically do not require proof of legal immigration status before accepting customers’ business.
It’s unknown how much of the remittances come from undocumented migrants, but they are hardly the only residents sending money abroad. Under the Border Wall Funding Act of 2017, a bill proposed by Rep. Mike Rogers, R-Ala., remittance senders would have to pay a 2 percent tax, regardless of the sender’s legal status or whether the sender has already paid federal taxes on that income.
The idea, Rogers suggests, is to make “countries that benefit from our porous borders and illegal immigration” pay for the wall.
Although an estimated 30 percent of the U.S. undocumented population comes from Asia, Africa and Europe, Rogers’ tax would apply only to money sent to Latin America or the Caribbean. Stiff penalties — up to $500,000 in fines and 20 years in prison — could be levied on anyone who tries to remit money without paying the fee.
Another bill proposed in the Senate would impose an additional fee of 7 percent on anyone making wire transfers who cannot prove legal immigration status. The bill effectively would turn Western Union employees into immigration agents.
Neither bill limits the definition of remittance to personal money transfers. That could mean that the fees and penalties would apply to bank wire transfers made by companies — including those owned by Trump himself. Trump owns properties in Latin American countries covered under Rogers’ bill. Many billionaires, possibly including Trump, maintain offshore bank accounts in countries such as Panama where taxation and reporting rules are more lax. Panama is among the nations listed in Rogers’ bill.
These plans also are self-contradictory. If the goal is to pay for a wall that keeps migrants out, why make it less rewarding to stay home and receive money from friends and relatives in the U.S.? The bills penalize those who are doing exactly what Trump wants: Staying put.
Most Capitol Hill Republicans and Democrats have, so far, shown little patience for gimmicks designed to help Trump fulfill his more outlandish campaign promises. Neither a wall nor a tax on remittances will fix what’s wrong with America’s broken immigration system.