The big thing is we need for Mexico to get serious about the illegal immigration issue. I’ve read stories where Mexican officials stand on the border and give out water and directions to people about to cross into the US. They do nothing to stop it and actually encourage it. They really are dumping their problems on the US.
Jesus, this country…
Got a cite for this? You know, giving out clean needles to heroin injectors is also “not doing anything to stop it” but sometimes it’s the most humane thing to do.
No, they don’t.
They have fake SSN numbers so they are definitely not filing taxes, nor are they paying this mysterious penalty for failing to pay (or file), nor are they being deported.
Yet these same individuals qualify for government assistance.
Illegal immigrants qualify for very little government assistance, this is a pervasive myth promulgated by the right.
Basically they can send their kids to school and they can get emergency medical treatment for free (which any human being can in the U.S.–they just may try to collect from you which is a problem for people with assets or fear of dinging their credit score.)
Illegal immigrants pay around $13bn a year in payroll taxes, so while some definitely work off the book, a lot do not. They also pay sales taxes, and since they have to live somewhere, often rental units, they are indirectly paying property taxes through their land lord–which is also the primary source of funding for most local school districts, so they aren’t even getting schooling “for free.”
What problems?
Mexico is lacking jobs. Businesses in the U.S. offer jobs.
You get cheaper produce, your lawn mowed, the sheets changed in your hotel room.
What are you complaining about?
The biggest problem are businesses using illegal laborers in jobs that do attract Americans.
Last figure was $26 billion per year, USA to Mexico as remittances.
So that’s $26B/year personal remittances USA to Mexico.
And I think few would switch, as a bank wire carries fees much higher than WU, so a 5% levy would still keep the overall fees cheaper. And you wouldnt have to have a bank account.
So, by my figures $1.3 B a year. Over 20 years, it works out.
They work under fake SSN’s they file under legal ITINs.
Nor do they qualify for much government assistance.
I followed that url, but it is saying, based on a previous year, that remittances were PROJECTED to be $26B in 2014; did that projection pan out, given the trends in migrant labor since the Great Recession?
This link says that in 2013, total remittances to Mexico, from both legal and illegal immigrants as well as U.S. citizens, was about $22B; the World Bank estimates [Excel spreadsheet]all remittances from the U.S. to Mexico (again including legal migrants and foreign-born citizens) was about $24B, around a billion of which was compensation to employees rather than personal transfers.
Per one research firm, the average remittance is about $300. Sending $300 to Mexico by paying cash at a Western Union location will run about $7-10 or so. If we add a 5% surcharge, that transaction now costs $22-25. While the average outbound international wire transfer fee is now around $45, by shopping around it’s certainly possible to find banks or credit unions that charge $25 or less (Wells Fargo ExpressSend, for example, will wire money from your Wells Fargo account to your family’s account at major Mexican banks for $5). Moreover, if our intrepid migrant decides to send more money less frequently, a $600 Western Union transfer, with 5% tax, now costs close to forty bucks, but a wire transfer with no tax can still be had for that same $5 to 25. A fairly modest change in behavior and your plan doesn’t work out anymore.
Except to wire from your account to their account requires a bank account on both ends. That adds a high monthly service charge, and getting a bank account. This is why it’s so rarely done.
And of course they can add surcharges to those types of transfers also.
That’s why you get Toyota and Honda to pay for part of it, I am sure they could put together a collective of companies from their supply chain, for a secure route through the border crossing. And by pay for part of it, I mean pay for the lions share. Longer wait times at the border always gives the just in time crowd headaches, so blackmailing them should not be that hard.
Next have Delta force and the other scruffy looking dudes to hit cartel members, always see pics of their places, with cash palleted and unable to move. Re purpose the spoils of war from the drug war to the wall.
Declan
I just want to go on record to say that making Mexico build the wall (which is laughable) is a dumb-ass idea. The best way to keep Mexicans from crossing illegally would be to improve the Mexican economy. Making Mexico build the wall would probably make it worse.
Did I mention is was a dumb-ass idea?
Have you actually looked at what monthly service charges are at banks that cater to lower-income people, including migrants? Latino Credit Union, e.g., charges $2/mo. for a checking account; Wells Fargo’s basic account is $10/mo., and even that can be waived if you have direct deposit, use a debit card a certain number of times a month, etc. l
Yes, it also requires a bank account on the other end. However, the fees I quoted above assumed Western Union was transferring into a bank account; fees are higher to have the recipient pick up cash, and in many locations the recipient pretty much needs a bank account anyway because not all agents keep a lot of cash on hand. (Plus, there are various “deals”–Wells Fargo and Banamex, e.g., have or had an agreement by which a Wells Fargo customer opened an ExpressSend agreement to a specific recipient in Mexico and Banamex would automatically open an account to accept the money.)
Many many illegal immigrants do have bank accounts (certainly not all, and perhaps not a majority, but quite a lot). Give them an extra incentive to have one, and a lot more will.
Yes, we can add surcharges to those transfers as well. That gets back to the points UDS made about defining exactly what we’re taxing, and whom, and I don’t believe we’ve defined that yet.
Look, you could stand to find a more credible source. The source you link to gives two figures:
“$26 billion sent as tax-free remittances by illegal aliens to Mexico in 2014”. This is cited to sopmething called “Wakeup Call From Mexico”, issued by MuchoPress in 2009.
$22 billion total remittances to Mexico from all sources in all countries, sourced to the World Bank via the Pew Research Centre.
No attempt is made to explain this discrepancy and, since the cite for the first figure is not online, we don’t know how much faith to place in their ability to identify remitances which are “tax-free” versus those paid out of taxed income, or remittances may by illegal aliens versus those made by others. The MuchoPress figure is so glaringly at variance with the World Bank figure that I’m not inclined to place much store by it without knowing a good deal more about how it was arrived at.
Regarding the question of whether a levy on wire transfers paid for in cash could easily be avoided, the MuchoPress article (if it is reliable on this point) suggest that it could. The bulk of these payments are made by electronic transfer, but that is a recent development; until a few years ago the bulk were made by sending money orders. If nothing else, this tell us that there are alternative modes of payment, and that the people who make these payments are wiling to switch from one mode to another. You can’t collect a levy at the point where somebody purchases a money order to send to Mexico, because the seller of the money order has no idea where it is going to be sent. So, if people switch back to buying money orders (or, e.g., sending travellers cheques) is there any practical way to levy the transfers?
As I understand it, the idea is to force Mexico to write the USA an $8 billion check, but it would be American workers who would be building the wall.
They stopped as the MO were getting stolen in the mail.
Possibly, but that missses the point. The point is that, if a particular method has excessively high overheads (rates of theft, attracts a levy) then people will switch to another method. If they were willing and able to move away from money orders to avoid the overhead of theft, what makes us think they are either unwilling or unable to move away from buying electronic transfers with cash to avoid the overhead of a levy?
Because the levy would be small enough to not be worth the trouble. In any case existing AML controls would assure the levy is collected from any source.
The monies in question are being received in Mexico, which is beyond the reach of the IRS. The only was to tax the money would be to identify it as a remittance at the point of transfer. Spoofing your ability to identify the payment as a “remittance” would take a reasonably bright teenager about four minutes of effort. Are you planning on only taxing remittances to Mexico? At what rate? Because I’ll set up a business he in Canada charging a quarter of that rate where Jose sends the money to me, and I’ll remit it to his relative in Mexico. Jose saves three quarters of the Trump Tax, I make a fortune, and the IRS gets nothing. Man, this is easy.
Of course in top of all that is the continued, fascinating fantasy people have that taxation won’t change behaviour. If remittances are taxed, they will be hidden and reduced in number, and the promised revenue will not materialize.
Such transactions are heavily monitored & regulated. odd that a “reasonably bright teenager about four minutes of effort” can launder funds so easily while multi-million dollar drug cartels find it rather difficult. Because that’s exactly that that is- money laundering and wire fraud.
Low taxes don’t change behavior- significantly. No one grows their own tobacco and cig smuggling, while certainly in existence, isnt all that big a deal in the uSA.