Posted on 08/20/2015 7:16:37 AM PDT by SeekAndFind
Donald Trump’s new immigration plan boldly declares that, “Mexico must pay for the [border] wall and, until they do, the United States will, among other things: impound all remittance payments derived from illegal wages.”
Would that even be possible? A Trump administration could erect a lot of legal, regulatory, and logistical obstacles to transferring money from the U.S. to Mexico. But those moves would enrage the banks and financial institutions that make money off the transfers, and probably spur interest in transfer methods that escape the attention and grasp of law enforcement.
Earlier this year, Mexico’s central bank released data indicating Mexicans abroad sent home $23.6 billion in 2014, almost all of it from the United States. Payments from workers abroad make up just 2 percent of Mexican GDP, but they can play a much bigger role in particular local economies. One study concluded that “the poorest rural areas” of the country derive 19.5 percent of their income from remittances. Whatever their economic impact, the payments are widespread: An estimated 83 percent of Mexicans who enter the country illegally send money home. But so do 73 percent of legal Mexican immigrants — making a blanket restriction on remittances virtually impossible.
Still, the U.S. government can make it extremely difficult to send money to a country. The Treasury Department has enacted a series of regulations designed to restrict terrorism financing that holds intermediary banks responsible if the money they transfer ends up in the hands of terror groups. Somalia has no functioning traditional banks, and in February, U.S. banks largely stopped servicing the accounts used by money-transfer operators in Somalia. Somali-Americans are now complaining that they have no way to send money back to their families.
Trump’s pledge to “impound” remittance payments implies seizure, an act that would face a high legal bar to clear. But the government has successfully seized money in the accounts of criminals who smuggle illegal immigrants across the border.
In the early 2000s, Arizona attorney general Terry Goddard and other state authorities suspected Mexican crime syndicates were moving money through Western Union wire transfers, and sought to seize money in Western Union accounts. The figures were mind-boggling, according to the prosecutors’ testimony: $500 million a year in Western Union payments from Arizona, and $2.5 billion a year in payments for people-smuggling overall.
But Colorado-based Western Union contended a state attorney general didn’t have the authority to review wire transfers from other U.S. states directly to Mexico, arguing that it violated the privacy of their customers and overstepped limits on the state’s search-and-seizure authority. State prosecutors countered that the wire transfers constituted payment for crimes committed inside Arizona.
In 2009, the Arizona Supreme Court agreed that Goddard had exceeded his authority when he sought records of transfers exceeding $500 from 29 other U.S. states to Sonora, the Mexican state directly south of Arizona. But the following year, the company reached a settlement with the state, granting investigators in Arizona, California, Texas, and New Mexico “unprecedented” access to records of electronic payments to Mexico.
Note that Goddard and like-minded prosecutors sought access to accounts being used by cartels and migrant-smugglers, not garden-variety illegal immigrants sending money home to their families. The company and other wire transfer companies would almost certainly balk at prosecutorial fishing expeditions designed to secure broader access to transfer records, setting up another lengthy legal battle.
Of course, where there is a will to move money across the border, there is a way. Tighter legal restrictions would likely spur immigrants to use hawala-like systems that rely on trusted networks of contacts on either side of the border, Bitcoin-style systems that operate outside the traditional financial network, or plain old smuggling of cash.
The simplest option for cracking down remittance payments may be taxation. The state of Oklahoma charges a one percent fee on all personal wire transfers of cash to accounts outside the state. The state treats the fee as withholding from state income tax, so any Oklahoma resident who files taxes eventually gets the money back. Those in the country illegally obviously don’t file state income taxes, so they never get the money back or have it credited against a state tax debt. The “wire transmitter fee” brought in $10.5 million in 2014, and $9.7 million the previous year. Wire-transfer companies in the state don’t like the tax because it increases fees.
To some Americans, Mexican workers’ remittance payments represent a fundamentally unjust financial transfer. While $22 billion to $30 billion is a drop in the bucket for the $17 trillion U.S. economy, it’s a matter of principle for these folks. In their eyes, illegal immigrants from Mexico effectively steal from the United States by entering the country, offering unethical employers a labor force that isn’t covered by wage, workplace safety, and other laws, getting paid under the table, and then sending the money out of the country.
But mitigating this perceived injustice might not require grandiose promises to “impound” the money. A simple tax on wire transfers might offer the path of least resistance.
— Jim Geraghty is the senior political correspondent for National Review.
America first. Carry as big a stick as will do the job. GBDT.
As we've seen with Obama, he has a history of issuing EO's and rushing to implement them knowing the courts take anywhere from 2-4 years to stop him (which they've done almost every single time.)
Still, that's two years minimum of mass deportations and taking our country back.
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No, it isn't. It's money being wired out of the country. Trump wants to seize that. Where's the due process? Where's the guilty in a court of law verdict?
This is asset forfeiture.
He needs to just tax the remittance money at 20% and pay for the wall with it.
Why not? They already impound the cash of U.S. Citizens if they catch you walking around with more than they think you should have.
Me neither. And I have no problem with the government seizing the assets of some mule driving down the interstate with $75,000 in cash that he can't/won't account for.
Seems it would be easier to just require a valid SSN to send money out of the country that isn’t bank-to-bank, and then impose hefty fines to the transfer companies if they don’t verify the id of the sender. But like immigration laws themselves, it would have to be enforced to have any effect.
I have no problem with Executive Actions/Orders that repeal Obamacare, deport all illegals, and institute a flat tax for starters.
Identifying all registered DemocRATS as criminals would be a good start to the second day.
"some Americans"- Of course those Americans don't include National Review. They purged the magazine of border patriots years ago.
Not to a lot of our fellow Freepers too.
Actually, I'm not. I'm FOR asset forfeiture. But every time I bring up this point, I'm usually shouted down by the many libs here at FR.
ding, ding, ding, WRONG. The government places all kinds of restrictions on foreign remittances for citizens and legal residents alike. Try sending a wire transfer to certain banks in Belize. This is completely doable.
I see your point, on the other hand I consider it asset forfeiture of legal American taxpayers when the illegals siphon off our tax dollars and transfer them to southern border countries instead of infusing them back into the American economy. And those American dollars are of the major concern to those foreign governments, not the plight of their citizens.
Just make a 10% fee for any remittance. They can try to get around it at their peril.
Seems to me as simple as the one thing liberals hate the most...........documentation!
Can’t call it a “tax”.
All President Trump has to do with the illegals who have jobs here, but are NOT AMERICAN CITIZENS (yet) is pay them in script, which they can collect in pesos at the border on their way back home(to Mexico). That would settle the problem in a hurry!@!!!@@@!!!
Since Mexico has begun charging OTMs a fee for entering Mexico .....
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