2017<\/a>, Mexico was the top recipient of remittances from the United States, getting a hard-currency injection of just over $30 billion directly from our economy. Mexican nationals in the U.S. remitted more money to their home country than all Chinese and Indians in America combined. China and India are the second and third highest recipients, respectively, of U.S. remittances. <\/p>\n\n\n\nThat $30 billion figure represents untaxed cash fleeing the\nU.S. economy and entering the Mexican economy every year. It comes from both\nlegal and illegal Mexican nationals, as well as naturalized U.S. citizens\noriginally from Mexico. And that money very rarely makes its way back to the United\nStates.<\/p>\n\n\n\n
The failure to tax remittances represents a massive loophole\nin America\u2019s otherwise comprehensive scheme of levying fees on international\nfinancial transactions. Moreover, the fact that this loophole has not been\naddressed, especially at a time when it might help further U.S. interests\nabroad, is mindboggling. <\/p>\n\n\n\n
Currently, Oklahoma is the only state that taxes\nremittances, but if the United States placed a mere 1 percent federal\nremittance tax on all Mexican remittances from the U.S., it would bring several\nadvantages: <\/p>\n\n\n\n
- First, the tax could reduce the number of\nMexicans illegally entering the U.S. in search of employment, as remittance\nrevenues would decrease. <\/li>
- Next, the tax decreases the disparity between\npublic services consumed and taxes paid by Mexican nationals living in the\nUnited States. A remittance tax wouldn\u2019t ensure that Mexican nationals pay for\nall the services they consume but it would help reduce the burden on the\nAmerican taxpayer, who is forced to make up for the tax revenues lost when\nremittance money exits the U.S. economy.<\/li>
- Additionally, the tax encourages more\nparticipation in the Mexican labor force, which helps improve its developing\neconomy. Many Mexican households rely\nsolely or primarily on remittances from the U.S., which discourages them from\nparticipating in the domestic labor force and entrepreneurial activity. If this\nexternally-generated capital is reduced, more Mexican individuals will seek\nemployment at home, increasing the amount of wealth generated in Mexico.<\/li>
- Lastly, the collected tax revenue from the\nremittances could improve societal and physical infrastructural in the United\nStates, including potentially the southern border wall. <\/li><\/ul>\n\n\n\n
The massive transfer of U.S.-earned cash to Mexico is just\nanother way that our lax immigration policies are hurting average Americans. The\nrevenue raised from money retained in the U.S. that is subjected to consumption\ntaxes is used to pay for schools, roads, jails and other infrastructure. It\u2019s\nbad enough that some Mexicans are entering the country illegally and showing\nprofound disrespect for American law. What\u2019s even worse is that they don\u2019t\nappear to be paying for the public services they are using. A remittance tax would be a good first step in\nalleviating that problem. <\/p>\n","protected":false},"excerpt":{"rendered":"
One of the least-discussed aspects of U.S.-Mexico immigration policy is the potential taxation of remittance payments being sent from the United States to Mexico. Remittances are monies earned in the United States that are then transferred to relatives, friends, or business associates who reside abroad. According to a recently-released study by FAIR, in 2017, Mexico<\/p>\n
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