Whether Mexico could even be coerced into paying for a wall or not

Great Debates
101

Your missing the point. Again.

I’ll put this as simply as I can. The proposal is to tax payments to Mexico which are “personal transfers” - payments from a US resident to a Mexican resident for which nothing is received in return. In other words, payments of a certain character.

(There’s an - I think deliberate - vagueness in this thread about whether we are targetting all personal transfers, or just those which are made by illegal immigrants. My suspicion is that this vagueness persists because the advocates for the levy don’t like too much attention being paid to the question of what payments, exactly, are being levied. If they answer that question, they have to come up with a practical way of identifying the payments as they are made, so the levy can be imposed.)

Your proposal for imposing this levy doesn’t attempt to identify the character of the payments; it focusses entirely on the mode by which they are made.

As a person with extensive experience of drafting legislation, you’ll have spotted the problem here; the regulations don’t implement the policy. Someone making a payment of a character which you wish to levy can avoid the levy by choosing a mode of payment which is not caught by the regulations. The levy gives them a financial incentive to do so. Doing so will be perfectly legal. So what makes you think they wouldn’t do so?

The proposal in post 26 is for a 10% levy. If I paid a 10% cost to transfer funds by a particular method, I would certainly find a different method of transferring them. Wouldn’t you?

102

I can see how that might be tricky if you’re laundering millions of dollars of ill gotten gains. Hiding a $600 payment to Uncle Esteban is trivially easy.

103

The United Nations Office on Drugs and Crime estimates that between $800 billion and $2 trillion is laundered every year by criminals. Obviously that’s not all drug money, nor is it all headed to Mexico; the U.S. Treasury [PDF] reports that Mexican drug trafficking organizations earn somewhere between six and thirty-nine billion dollars in the U.S. each year. Somehow they are able to launder enough of it back home to make the business worthwhile.

Here’s an idea: I set up a “church” in El Paso or Brownsville or Nogales, Arizona, and I accept donations from “believers” throughout the U.S. to fund my "mission work."You send me money, and I let you designate exactly what village or what family in Sonora or Jalisco will receive the “missionary funds.” Sure, it’s a front, but for how long can I keep the IRS tied up in court for interfering in my “church” or trying to tax my “donations”? Given the current political environment, how certain are you that more mainstream churches won’t join in on my side to keep the IRS at bay? (For comparison, the IRS case over whether the Church of Scientology was tax-exempt lasted at least twenty-five years, and the CoS essentially won the war.)

104

Any source? If the levy was high enough (and it might have to be to build/maintain the wall) or insulting enough, what’s stopping people from just sending care packages?

I could send my dear, sweet mother a birthday present by mail, yes? No one from the US government is going to open that up and take out 10% of whatever items I’m sending, right?

I’m sure theft en-route would be an issue, but people don’t have to use the banking system to move value from one place to another; it’s just currently best option. Make that option worse and people will use other ways.

105

I’d imagine that a large number of ‘micro mail-order businesses’ would pop up. Aggregated under and Etsy or Ebay like service perhaps. Each one selling maybe one or two handcrafted items a month at ridiculous markup to homesick expatriates in the US. They must have great customer service, since the customers always seem to come back every month to buy something new from the same seller!

Sure it’s a transparent ruse, but the Mexican government would have no interest in cracking down on it. And, if they could keep their faces straight, they could complain that the USA was breaching it’s free trade deals if they try to tax those payments. The battles would go on for years.

106

Nothing so tiresome would be required.

Dr Deth’s proposal is for a levy on the sale of wire transfers to Mexican accounts which are paid for in cash (as happens over the counter at Western Union offices every day).

To avoid the levy you don’t need fake churches or fake mail order businesses. You just need a bank account. Then you can arrange electronic transfers which are paid for not in cash, but by debiting your account.

Or, you get your Mexican dependents to open a bank account in the US (which is perfectly lawful). Then you deposit cash to that account, or transfer funds to it from your own account. They withdraw it in any of the usual ways, the most convenient probably being an ATM card which they use in Mexican ATMs.

We live in an age of internationally mobile capital, people. There are numerous ways for transferring funds from a US resident to a non-resident of the US. It’s really easy and cheap; that’s why capital is mobile. Avoiding a levy which focusses on levying a particular mode of transfer will be easy, and all the easier because it will also be perfectly legal. No fraud or deception involved.

A person who avoids a levy on wire transfers paid for in cash by not making wire transfers paid for in cash is no more guilty of fraud or evasion than the person who avoids paying tobacco taxes by not buying tobacco products.

If the Donald really, really, really wants to do this, what he’ll have to do is require banks to levy all funds transferred funds to Mexican residents, regardless of the mode of transfer, unless the transfer is demonstrated to be in the class of unlevied transfers. So a business wishing to pay for goods or services supplied from Mexico will have to show the bank an invoice, or suffer the levy. Someone wishing to pay wages to Mexican employees, or interest on a Mexican debt, will have to show that he owes the wages or the interest, or suffer the levy. Americans travelling to Mexico and wishing to pay accommodation, etc, costs incurred there would need to produce invoices or suffer the levy. And so forth.

That would work; it’s how financial restrictions on internationally-sanctioned states are imposed. It would be a significant administrative burden on banks and, more to the point, on American individuals and enterprises doing any kind of business with Mexico. Since the payments that are actually to be levied are only about 0.1% of total US payments to Mexicans, it would be a massive, massive tail wagging a pretty small dog, and I doubt that the Americans affected would put up with it for very long.

107

Better send it by personal courier, because otherwise there will be these things called “customs inspections”, and these “customs forms”, and these “assholes” who will do things such as block a shipment of printed goods for months because it is not in the language of the receiving country (the fuck so what, but it was a repetitive one for a bookstore I used to buy at), or send back the customs forms because they don’t indicate the thread count on used clothing and household items.

Sending money by any of the multitude of electronic means currently available is much less of a pain in the ass.

108

I am incredulous anyone, even someone in the regulatory world, would think this is controllable. In ten minutes I can think of ten workarounds for small amounts of money.

And let’s be frank; NO ONE at the IRS is looking at small amounts. I know someone in California who sent me $2000 by Paypal not two months ago. No one is monitoring that individual transaction, on either side of the border, and if I send it to someone in Mexico no one will notice that. The effort expended to investigate a small remittance and determine whether it’s purely a gift or a legitimate payment will cost more than the taxes made.

Let’s leave aside the fact that taxing gifts is disgusting. What if Juan is sending a Christmas gift back to his sister? Who can say that should be taxed with a shred of decency in their heart?

109

The IRS already taxes gifts over a certain amount ($14,000, I think, so not a small amount). I think that’s mostly to get people trying to skirt inheritance tax.

110

Wire fraud, Money laundering, funding terrorist activities- they can close you down in minutes.

111

The US government doe prohibit sending too much cash by mail- internationally.

But like i said, they dont send MO since the mail system is Mexico is so corrupt there were losses up to 50%. A 5% levy is cheap compared to losing half of whatever you send.

112

Yes, and doing that would require Illegal aliens to open bank accounts, which they are very loath to do, and the charges on the account plus the charges on the bank wire would be far higher than the 5% levy.

And of course, since those transfers are heavily regulated and monitored they could easily levy those also. Or ban them. Or better yet, just regulate them so heavily that no bank will touch them- like they do with legal marijuana funds.

113

All of those workarounds have been thought up by Money Launderers and their Smurfs.

And yes, that transaction was closely monitored by Paypal- and recorded.

Yes, there are moral issues, and do we even need or want a wall?

But that’s not my point. My point was the the remittances *could *be easily taxed to pay for the wall. In no way did i say this should be done.

114

Scream “religious freedom” loud enough and the feds will be back-peddling so fast they’ll trip over themselves. The mere thought of the IRS peeking into the private affairs of (Christian) churches is anathema to a huge swathe of the population, including a lot of highly connected and influential people.

Sure it’s a scam, sure it’s illegal, sure it’s money laundering. You are still thinking of this in a very legalistic way, and this is not a legal problem–it’s a political problem and an enforcement problem, both of which are very different challenges than merely getting a judge to sign a warrant.

Various agencies now estimate that Mexican and Colombian drug cartels SUCCESSFULLY move somewhere between fifteen and forty billion dollars out of the United States each year. That’s with the current regulatory regime and close monitoring and AML initiatives and all the rest; between money laundering schemes and bulk cash smuggling, they get away with that much. What leads you to conclude that some more regulations are going to be so much more effective?

115

Sending cash? Who said anything about sending cash? I quite specifically said ‘items’ to make the point that while money/the banking system is currently the best way to move value across the boarder (by far) people don’t actually want bits of green paper with dead president’s pictures on em. They want goods (and services).

Illegal immigrants trying to send tiny amounts of money back home are politically powerless in the US true; but there is a comparatively enormous flood of money and goods flowing back and forth across that boarder that various politically powerful groups want to protect. Illegal immigrants (a group that by definition is willing to break immigration laws) can either accept a tiny levy that won’t raise enough cash, try to hide their (tiny) remittances in that enormous stream of capital while the government (on one side of the boarder) plays (expensive) wack-a-mole squashing each scheme, or just perfectly legally hand money/goods to someone physically going across the boarder. Exactly how much time/effort/money is the US government willing to expend to stop that kind of ‘smuggling’?

The idea that you can write a couple of simple regulations, enforce them cheaply, and raise lots of money (from a class of people who, by definition, are willing to break laws and regulations to provide for their families) from lots, and lots of tiny transations without negatively impacting all the ‘legitimate’ trade across the same boarder is delusional. Slap a levy on all money flowing from US->Mexico sure, you can probably do that; but have fun with the international and domestic shitstorm.

116

The levy proposed in this thread, as I have pointed out more than once, was 10%. You keep sticking in this rerefence “illegal aliens” and it’s relevance is not clear, since the proposal is not for a tax on personal transfers by illegal aliens, since the proposal is for a tax on personal transfers, period. And, even if its true that illeal aliens are loath to open bank accounts, my suggestion doesn’t require the payor to open a bank account. That’s one possibility, but it works just as well if the payee - not an illegal alien - opens a bank account. Other posts in this thread have already pointed to low-cost accounts that could be used.

Yes, provided they are prepared to levy or ban all transfers to Mexico, made by anyone for any purpose. Because the “heavy regulation and monitoring” that you claim exists doesn’t include any attempt to identify the motive of the payor in making the transfer.

No offence, but I’m increasingly sceptical of your claim to have experience and expertise in the drafting of regulations. I have pointed again and again to the mismatch between the (deliberately?) vague policy you are advocating and the basis of the regulations you propose for implementing it, and you seem simply not to grasp the point. If you see any value in continuing this discussion, can you start by defining unambiguously the class of payments that you think should be levied?

117

You’d buy stuff expensive here in the USA, pay shipping and send it to a place where that stuff is cheaper?:rolleyes::dubious::eek:

118

I said, cash remittances. But should there be a massive turn to bank to bak wire (which is very unlikely) then those could be levied or regulated heavily also.

I have CAMS certification. What do you have?

119

Someone in the US thought it was worthwhile to send $235.7 billion worth of stuff in 2015. Excuse me for interpreting that as an existence proof.

No doubt a great deal of that is in goods not useful/economical to ship in individual quantities. But my point remains; so long as there’s a large flow of ‘legitimate’ trade tiny individual remittances are going to be hard to find if people are motivated to hide them. Close to impossible if one wants to do it cheaply and avoid impacting the trade.

120

I want to know if Mexico is going to pay for the wall before, or after it is built? Is Trump going to gamble with $26 billion of our tax dollars that his scheme will work? Or will he extract the payment in advance, so the wall is paid for as it is built? Hmm, I wonder…