Report: White House Weighing Mexican Remittance Fee To Pay for Southern Security Wall…

This is a little funny.  Back in 2015 we originally shared an easy peasy way to pay for the border wall by charging a 4% remittance fee on wire transfers to Mexico.  With more than $25 billion (2015) in Western Union transfers, more than Mexico’s entire oil and energy sector combined, a 4% U.S. surcharge on remittances creates $1 billion revenue annually.

The U.S. Treasury already has a similar process in place for Cuban Remittances and Western Union compliance affidavits.  The remittances to Mexico have now jumped to $27 billion in 2016.  Making the remittance fee even more feasible.

WASHINGTON – President Trump is mulling a tax on cash transfers between immigrants in the U.S. and their relatives in Mexico as a way to fund his promised border wall without forcing American taxpayers to open their wallets, according to sources familiar with the proposal.

Trump first floated the idea of taxing or halting person-to-person wire transfers, known as remittances, during his bid for the White House. A two-page memo released by his campaign last April described a plan “to compel Mexico to pay for the wall” by preventing immigrants from wiring money outside of the U.S. unless they can prove their legal status to law enforcement authorities.

Because the Mexican economy has become so dependent on wages sent home by migrant workers, which surpassed oil revenues as its leading source of foreign income in 2015, Trump said he could convince the country’s leaders to make a “one-time payment of $5-10 billion” toward his border wall by threatening to stop the annual flow of billions of dollars from the U.S. to Mexico in the form of cash transfers.

In 2016, Mexican immigrants living in the U.S. sent $27 billion to family members and friends in their native country.  (read more)

[2016] Even if President Donald Trump does not renegotiate any of the $50 Billion trade imbalance we have with Mexico; and if you only target the remittance dollars ($25 billion in 2015) which are vital for the Mexican economy, you can see how easy it would be to get Mexico to pay for the border wall.

Federal Budgets are fixed on ten year projections. In order for an expenditure to be revenue neutral the revenue must meet or exceed the expenditure over a 10-year period.

If you take the $25 Billion in outbound remittances (2015), now $27 Billion (2017), and you apply a small 4% surcharge for each wire transfer to Mexico, that surcharge would net $1+ Billion/year.   Multiplied over ten years (budget requirement) that means $10 Billion into the U.S. treasury from the surcharge fee.

$10 Billion in revenue.

One comment on “Report: White House Weighing Mexican Remittance Fee To Pay for Southern Security Wall…

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