Rising Remittances As A Down Payment On The Wall?

While President Donald Trump and Congress haggle over funding for a border wall, billions more in U.S. dollars are flowing out of the country for Mexico and other points south.

Legal and illegal migrants sent $53.4 billion in remittances back to Mexico and Central America in 2018. That’s $53.4 billion – with a “B” – and more than double the projected cost of building a border barrier.

Remittances to Mexico alone reached $33.7 billion in 2018, up 21 percent from roughly $27.8 billion in 2016, the World Bank reported.

Remittances to Central America are spiking with a growing inflow of asylum seekers benefiting from U.S. catch-and-release laws. Wire transfers to Central America hit $19.7 billion last year, up from $15.8 billion in 2016. The southbound windfall includes payments to human-trafficking cartels.

With an estimated 83 percent of Mexicans who enter the U.S. illegally sending money home, a surcharge on remittances is one sure way for President Trump to make good on his promise to make Mexico pay for the wall.

Last February, Trump said, “There are many forms of payment. I could name 10 right now.” But a year later, the administration has yet to come up with an actual plan.

The open-borders and ever-helpful Cato Institute suggests that migrants could skirt a remittance charge by using bitcoin. Yet that assumes an unlikely degree of financial sophistication at the receiving end.

FAIR has reported that tapping remittances is neither a new nor an exotic idea. Oklahoma assesses a 1 percent fee on all personal wire transfers of cash to accounts outside the state and collects $12 million annually. Why not charge for funds leaving America?

At the current (and rising) rate of remittances, a nominal 2 percent surcharge on Mexico-bound funds would raise $674 million for a border wall in the first year. Slap a fee on all foreign remittances — $150 billion last year — and the 2,000-mile barrier is fully paid off within eight years.

Taxing foreign remittances is a bipartisan no-brainer that makes the political gridlock over wall funding unnecessary. Retaining pennies on the dollars leaving the U.S. economy can finance border security while letting foreign governments and their migrants know there are limits to America’s largesse.