Restricting Remittances: The Golden Ticket on Immigration?

 

From Saagar Enjeti, White House Correspondent for The Daily Caller:

The White House is planning on targeting remittance payments made by illegal immigrants in the wake of an ongoing migrant flood at the U.S. southern border, a senior administration official told reporters Tuesday.

The White House plan to go after remittance payments falls in line with a proposal from former Kansas Secretary of State Kris Kobach, who is being considered to replace outgoing DHS Secretary Kirstjen Nielsen.

Kobach told Breitbart News on Tuesday that this will be an effective way for President Donald Trump to compel the Mexican government to take more enforcement action against Central Americans trafficking through their country.

OK, Let’s break this down.

Allegedly about 20 percent of Mexico’s GDP comes from remittances from illegals residing in ol’ Estados Unidos. To put that in dollar terms, that is more than $200 billion a year. A 20-percent reduction to Mexico’s GDP would be a muy huge hit to their economy, which by the way has already seen their GDP slide over 10 percent since 2014.

This is a threat that far-left President Andrés Manuel López Obrador would have to take very seriously. Even a cut of a quarter of the remittances would likely drive Mexico, already floundering, into a deep recession if not a full blown depression.

When Trump claimed that he was going to make Mexico pay for the border wall, many people laughed. Those people probably shouldn’t be laughing anymore. $8-12 billion or whatever it costs for the wall would be peanuts compared to a major cut in remittances for Mexico.

Published in General
This post was promoted to the Main Feed by a Ricochet Editor at the recommendation of Ricochet members. Like this post? Want to comment? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

There are 25 comments.

Become a member to join the conversation. Or sign in if you're already a member.
  1. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Could you clarify the meaning of “remittances” in this context, @unsk? Are these funds that illegals earn while they work here, and then send them home? How would we stop them from doing that? I assume I’m missing something obvious. . .

    • #1
  2. Full Size Tabby Member
    Full Size Tabby
    @FullSizeTabby

    I get nervous about targeting secondary functions such as financial transactions.

    Once it becomes acceptable to target financial transactions of criminals, it becomes easy to justify targeting lawful but “icky” transactions, or targeting the financial transactions of people we don’t like. We have already seen the efforts to use the financial system to target manufacturers and sellers of guns, and the efforts to use the financial system to target certain religious people and groups. 

    Much as I like the objective, my initial reaction is that the long-term risk set by the precedent is too high.

    • #2
  3. Locke On Member
    Locke On
    @LockeOn

    Most remittances are not checks or cash in an envelope.  They are electronically transmitted by services such Western Union.  You will find a plethora of such available anywhere illegals are likely to live and work.  They are the choke and control point, since they can be regulated at the point of origin in the US.

    • #3
  4. JoelB Member
    JoelB
    @JoelB

    Has there ever been a precedent for restricting remittances – in war time or where terrorist regimes are involved, for instance?

    • #4
  5. Franco Inactive
    Franco
    @Franco

    They tax the hell out of just about everything already. I fail to see how a tax ( say 3%) on wire transfers to designated countries should be controversial. 

    Do what they do with every other new tax, claim it’s temporary and the money will help senior citizens or some such group. Even better, for “barriers to discourage child trafficking, and recovery facilities for raped and exploited women and children”. Get with the game, people!

    • #5
  6. Al French, sad sack Moderator
    Al French, sad sack
    @AlFrench

    It seems unlikely the President has the authority without legislation, which the House surely won’t give him.

    • #6
  7. Jim McConnell Member
    Jim McConnell
    @JimMcConnell

    Franco (View Comment):
    Do what they do with every other new tax, claim it’s temporary and the money will help senior citizens or some such group. Even better, for “barriers to discourage child trafficking, and recovery facilities for raped and exploited women and children”. Get with the game, people!

    Just add “of color” and you’ve got all the bases covered, I think.

    • #7
  8. Bob Thompson Member
    Bob Thompson
    @BobThompson

    Al French, sad sack (View Comment):

    It seems unlikely the President has the authority without legislation, which the House surely won’t give him.

    There must be some authority existing in the income tax code, after all, I must report annually if I have funds in foreign countries.

    • #8
  9. Bob Thompson Member
    Bob Thompson
    @BobThompson

    JoelB (View Comment):

    Has there ever been a precedent for restricting remittances – in war time or where terrorist regimes are involved, for instance?

    Has it been decided, from a legal standpoint, that someone in the United States illegally has all the same rights as a person here legally? It just seems strange that 20% of a foreign country’s GDP should result from remittances by persons in the US illegally with absolute uncertainty regarding legal possession of such funds being remitted. I must answer a question on my tax return annually about this. Do illegals have no such obligation?

    • #9
  10. Kozak Member
    Kozak
    @Kozak

    Susan Quinn (View Comment):

    Could you clarify the meaning of “remittances” in this context, @unsk? Are these funds that illegals earn while they work here, and then send them home? How would we stop them from doing that? I assume I’m missing something obvious.

    Remember something like 50% of immigrants receive some form of welfare.  A good chunk of that money going overseas comes from US taxpayers.

     

    • #10
  11. Aaron Miller Inactive
    Aaron Miller
    @AaronMiller

    It’s a smart target. But taxes are the wrong strategy. That punishes lawful activity and feeds the beast.

    Requiring proof of citizenship for international money transfers might be the better way. Then punish banks which do not look closely at fraudulent IDs. But maybe that would be overly onerous. And I don’t know how accurately or efficiently government could track money wired through legal accounts, comparing those citizens’ incomes and domestic expenditures with remittances made on behalf of illegals.

    • #11
  12. Bob Thompson Member
    Bob Thompson
    @BobThompson

    Aaron Miller (View Comment):

    It’s a smart target. But taxes are the wrong strategy. That punishes lawful activity and feeds the beast.

    Requiring proof of citizenship for international money transfers might be the better way. Then punish banks which do not look closely at fraudulent IDs. But maybe that would be overly onerous. And I don’t know how accurately or efficiently government could track money wired through legal accounts, comparing those citizens’ income and domestic expenditures with remittances made on behalf of illegals.

    What if there is no tax but merely a report by tax id of every remittance?

    • #12
  13. Bob Thompson Member
    Bob Thompson
    @BobThompson

    I would be much more inclined to favor punishing those who make false representations in order to receive welfare payments than those who have ‘under the table’ unreported earnings since I really detest our approach to taxation and would not take the time to report anyone who fails to comply. I suspect that I know people who do both.

    • #13
  14. Aaron Miller Inactive
    Aaron Miller
    @AaronMiller

    Without the income tax, remittances would be no easier, I expect. Tracking international money transfers could be done the same, while illegals would contribute more here through a national sales tax. 

    If we’re dreaming.

     

    • #14
  15. cdor Member
    cdor
    @cdor

    unsk2: When Trump claimed that he was going to make Mexico pay for the border wall, many people laughed. Those people probably shouldn’t be laughing anymore. $8-12 billion or whatever it costs for the wall would be peanuts compared to a major cut in remittances for Mexico.

    This is why Trump should have appointed Kobach in the first place. However, it wouldn’t work to stop the remittances if the purpose is paying for the wall. Taxing the remittances would accomplish paying for the wall. Stopping the remittances could force Mexico to keep its southern border closed but that would not keep Mexican illegals from crossing into the USA. I do not believe the remittances equal 200 billion dollars–probably closer to 50 billion. 

    • #15
  16. I Walton Member
    I Walton
    @IWalton

    We have to stick to basics.  Complex discrimination will work against us.  Basics?  Don’t allow new muslims in, which means we should not  elect Democrats until they sort out reality.

    • #16
  17. Goldwaterwoman Thatcher
    Goldwaterwoman
    @goldwaterwoman

    I’m not sure we can totally trust these figures.  I can believe the total, but how do they know what percentage comes from legals vs illegals?

    • #17
  18. Rōnin Coolidge
    Rōnin
    @Ronin

    Goldwaterwoman (View Comment):

    I’m not sure we can totally trust these figures. I can believe the total, but how do they know what percentage comes from legals vs illegals?

    And we will never know for certain.  The take-away from all this is an estimated 1/5th or 20% of the Mexico’s GDP comes directly from remittances payments from the USA, and that doesn’t include the drug monies.  We have 10’s of billions, if not 100’s of billions of US cash dollars following south, and there are politicians of all political strips, business people, law enforcement and government bureaucratic on both sides of the border who do not want to shut that flow down because they all make a little something-something on the side.  The level of corruption we are now witnessing is the stuff that brought nations and empires down in the past.

    Sooner or later, we in the US and Canada are going to have to realize – as Europe is going to come to the same conclusion about Africa – that Mexico, Central and most of South America have fallen into a economic and social abyss.  We either protect our borders, our culture and our economy or we will be pulled into that abyss as well.  What’s at the bottom of that abyss: chaos.  What happens when you get chaos: Pestilence, War, Famine and Death on a scale we can’t comprehend. 

    • #18
  19. Zafar Member
    Zafar
    @Zafar

    Will the US tax all international remittance payments, or just the ones to Mexico?

    If all – that’s quite a tax grab   

    If just the ones to Mexico, money is fungible and there will be companies up and running within a week that transfer funds or allow you to buy cash able gift cards or whatever in Mexico via Europe or Canada (or China, or….)

    And if I could think of that in less than three minutes surely it’s occurred to the Whitehouse?  If not to ‘the base’?

    • #19
  20. Valiuth Inactive
    Valiuth
    @Valiuth

    I’m skeptical of this 200 billion dollar number. How many illegals are there? 11 million (I seem to recall this as a number bandied about)?, if they were all from Mexico, that means each one of them would be sending 20,000 a year to get that 200,000,000,000 number. Which is a sizable chunk of change for anyone to send anywhere, especially considering these people are supposed to be doing low skill low paying jobs. This doesn’t seem credible to me. What do these people live on here? If they are arguably sending more than half their income back home? 

    Maybe 20% of Mexican GDP is trade with the US. That sounds credible. But trade and remittances aren’t the same thing. 

    I have a simpler solution to the border problem stop having a zero tolerance standard. It’s clearly madness, like having a zero tolerance standard for speeding would be. 

     

    • #20
  21. I Walton Member
    I Walton
    @IWalton

    This proposal is nonsense.  Once we fix immigration so that we know who came legally but over stayed  and who snuck in and who must leave like most other countries can do we can sort out the cash flows but won’t have to.   We can’t and shouldn’t want to complicate finance more than we already have.   We’d need to know who has or even who lends checks to be mailed, runs cash back and forth etc. then shut down second party checks?   Do folks believe that criminals and those on the edge wouldn’t just use more complex laws on such matters to expand their networks.   These half baked notions that just complicate matters for honest people are  the reason we, (meaning the people) are losing control.

    • #21
  22. I Walton Member
    I Walton
    @IWalton

    Full Size Tabby (View Comment):

    I get nervous about targeting secondary functions such as financial transactions.

    Once it becomes acceptable to target financial transactions of criminals, it becomes easy to justify targeting lawful but “icky” transactions, or targeting the financial transactions of people we don’t like. We have already seen the efforts to use the financial system to target manufacturers and sellers of guns, and the efforts to use the financial system to target certain religious people and groups.

    Much as I like the objective, my initial reaction is that the long-term risk set by the precedent is too high.

    Exactly right.  We have no idea how criminals would accommodate any changes, but we know it wouldn’t be good.  A very bad idea.  Fix immigration for gods sake and since we can’t do that until the Democrats play rational again.  Just shut it down.

    • #22
  23. unsk2 Member
    unsk2
    @

    Thanks for the discussion.  A great many interesting points.

    This issue brings back the old problem of what rights do Illegals have. Sorry, but I don’t think they really have any at all. They are here illegally. Our system of government was not set up to grant rights to people who are here illegally.  Granting them rights makes a mockery of our system of justice. Why do they get a special dispensation from the law that no else gets?  A money transfer from a person here illegally should be able to be regulated and terminated.

    Walton “This proposal is nonsense. Once we fix immigration so that we know who came legally but over stayed and who snuck in and who must leave like most other countries can do we can sort out the cash flows but won’t have to.”

    “once we fix immigration” – I too would like to fix immigration, and I am not for rounding up all the illegals and deporting them either. That said, the Democrats clearly do not want to “fix” immigration in a fair way that would benefit the general welfare. They want to exploit many millions of poor, uneducated immigrants for votes to gain an overwhelming majority for their socialist tyranny, plain and simple. That is the driving force behind all their plans, complaints and protests.

    Kozak has a very good point. Probably more than 50% of illegals are on welfare, and that welfare money is effectively financing Mexico and other Latin American countries.  Since I work in a construction related industry in California, I know many illegals. While many are good people, I also know they don’t pay income taxes with any where near the regularity of us citizens.

    Besides the remittance issue,  taxes paid for and welfare and other state funded services paid to illegals needs to be addressed. My state, California, has 32% of all welfare recipients in the country- over 3 1/2 times the national per capital average for far and away the biggest state. It doesn’t  take a brain surgeon to figure out that the Democrat One Party State  here has  corrupted the system to get illegals here in the millions largely to overwhelmingly vote the Democrats in and keep them in power. The  cost unfortunately to the rest of us alone is probably in the hundreds of billions of dollars.

    The point of this post , and apparently the aim of others, was also not necessarily to implement such a plan  to restrain remittances. The point was that it could be a bargaining chip with Mexico to get a handle on our current immigration crisis at the border.

    All that said, since I have to do many wire transfers for business reasons, I know there is a ton of restrictions already  for us citizens for such transfers. However, like almost everything else, I would guess the Federales have taken a “hands off”   policy towards Illegal’s remittances and that needs to be addressed as well.

    • #23
  24. unsk2 Member
    unsk2
    @

    One further take. When you go to make a wire transfer, the first thing they ask is:

    “Do you have valid ID?” and then “Please show it to me”.

    Oops, Ding for the illegal.  The transaction under equal justice should end right there. 

    Now in a State like mine, where they give Driver’s Licenses to illegals with no real source of identifying papers, one could use your Driver’s License if you were an illegal. However, Bankers often will ask these days various pieces of info on who or what you are sending the wire to and your relationship to them. Therefore, I do not think it then unreasonable given the current level of intrusiveness in this process, for a person sending a wire to let’s  say Mexico, to be asked for the  identification of legal residency beyond a corrupted Driver’s License, which would put a massive dent in the amount of remittances to Mexico almost immediately.  

    • #24
  25. kedavis Coolidge
    kedavis
    @kedavis

    Regarding the financial data, how can illegals afford to send so much back home, etc etc, one thing that’s always puzzled me is how these poor people dreaming of escape to the north, can afford to pay thousands of dollars to “coyotes” and others to make the trip.  Perhaps multiple times, if they get caught and sent back.  And if they have that much money, they should stay where they are, where the money will go a lot farther, and take care of their children etc.

    • #25
Become a member to join the conversation. Or sign in if you're already a member.