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There has been talk of taxing such remittances. I doubt we could ever control it given the pourousness of our borders and the millions of people coming and going in our country. 50 million people enter the US annually. Here is a great article by VDH on the philosophy of illegal immigration and its impact. An excerpt:

The issue of remittances has changed the paradigm as well in three ways: it makes transparent the cynical efforts of the Mexican government to export its own citizenry in hopes that they will live frugally, and/or with U.S. government help, in order to free up a portion of their wages to send back to families that the Mexican government has no interest in — given that many of the expatriates and their Mexican families back home are indigenous peoples far from the centers of concern and power in Mexico City. U.S. remittances are now the second largest source of Mexican foreign exchange (well over $20 billion), and money, not morality, governs most of what we hear from Mexico City.

Second, the level of cash sent to Mexico and Latin America — who knows the exact amount, but variously reported at well over $30 billion — redefines the entire question of immigrant wealth and poverty. We are not talking of $10 million or even $1 billion, but a fantastic amount of capital, which, in theory, computes to several thousand dollars per resident illegal alien. Are aliens, then, sending capital to Mexico with the full expectation that federal, state, and local agencies here will make up the difference with health, welfare, housing, and education subsidies?

Could not there at least be a 10% tax on funds remitted to Mexico as a sort of bond to ensure the sender is not dependent on American taxpayers?

Third, the dollars represent a huge drain in capital from the American Southwest and a transference of financial resources across the border. The one defense of massive remittances — they prevent social unrest in Mexico — is even questionable, especially with the violence today inside Mexico. (Could it be worse without the remittances?) Oaxaca sends more illegal aliens to the U.S. than other regions in Mexico, and is probably the largest recipient of U.S. cash sent back — and yet is one of the most unstable regions in Mexico. Were not the Mexican system propped up by several billion, would it not, in Greek fashion, have to embrace structural reform?

I don’t think we disagree. Seems to me that if we stopped remittances entirely by wire, if only for a month or so, we would have little trouble re-opening them with a tax.

As to the drain in capital, you are right, but the other side will then make the case that the money wouldn’t have to leave the US if the families were allowed in as well. You know how the other side operates as well as I do.

No one seems to address this issue. I am tired of it not being addressed. It’s sort of like there is a leak in a ship’s hull and everyone stands around saying “Yep, there’s a leak. Someone should do something about it.” Meanwhile, the ship is sinking.