Earlier this week GOP Presidential candidate Donald Trump talked of taxing money transfers(remittances) leaving the United States that are going to Mexico.
Sole purpose of the plan is to raise money to fund a border wall to curb our illegal immigrant and drug problem at the border with Mexico. President Obama immediately jumped in saying it can’t be done in a mocking way. Well, he’s wrong. It can be done because it’s already happening. Before we say where, let’s look at some facts on remittances to Mexico.
Over $100 Billion a year leaves the U.S. in remittances. Mexico receives about $25 Billion a year in remittances with most coming from the U.S. according to NationalReview.com. Over 80% of illegal immigrants send money back. Mexico relies on this as part of their GDP.
Furthermore, what makes sending money back to Mexico for immigrants even more appealing is the first $14,000 is not taxed and considered a “gift” by the IRS. The money sent in remittance is worthless to the U.S. economically speaking.
While Trumps plan hit the news, the usual naysayers hit the media saying how it was unjust, Mexico relies on this money and of course racism. In reality this plan has been happening the past six years in Oklahoma. More importantly, it’s working.
Here’s more from the Center for Immigration Studies:
The U.S. could likely collect between one and two billion dollars a year in revenues from illegal aliens if it just copies a tax practice Oklahoma adopted a couple of years ago.
How do you extract tax dollars from the illegals, who are busily violating at least the immigration, labor, and tax laws of the country? Well, you can’t tax them all but what Oklahoma does is it places a 1 percent tax withholding on all moneys transferred by wire, or through banks, to people in other nations and other states.
The bill imposes a $5 fee on wire transfers of $500 or less. Wire transfers of more than $500 are subject to a fee of 1 percent.
Oklahoma’s Tax Commission, in its FY 2013 annual report, on page 11, indicates that the state collected $9,764,828 from this source, up about a million from the year before.
Donald Trump is right.