In his campaign, now-President Donald Trump promised to, “build a wall and have Mexico pay for it.” This promise is slowly coming to fruition, even the Mexico part.
In a bill introduced by Representative Mike Rogers (Republican-Alabama), a tax on remittances was placed in order to fund the border wall.
Remittance is money that workers in developed countries send back to relatives or friends in other countries. As small as a few hundred dollars per month may sound, it adds up quickly, creating $24.32 billion in GDP for Mexico and $5.98 billion for Guatemala, to name a few.
The Border Wall Funding Act of 2017 (BWFA) would put a tax of 2% on all person-to-person wire transfers to Latin America and the Caribbean, as well as an additional fine of 7% if the sender could not prove the legality of their residence.
Mark Krikorian, in an interview with NPR, argued that the remittance tax would help to curb illegal immigration, because the people who would send remittance would not be citizens. Krikorian sees the need for a tax like the one implemented in Oklahoma, which adds a $5 surcharge on wire transfers of $500 or less out of state, and a 1% tax on higher amounts. However, this added amount is tax deductible, as long as taxes are filed in Oklahoma.
Many disagree. In another interview with NPR, Rafael Villalobos Jr, a US citizen whom sends remittance to his parents in Mexico, says that although the tax may seem little, it is great on the receiving end, “That [ten dollars] is essentially another couple of days’ worth of food sometimes, depending on what you’re buying.”
Many experts agree with the unusualness of the remittance tax. Itai Greenberg, a professor at Georgetown Law School, says that a remittance tax is very unusual for a developed economy. Furthermore, the World Bank has called these a bad idea.
Strong opposition and support this bill will be met by. America, and its millions of immigrants, have yet to see if this passes.