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.
Executive order #2?
But of course.
Yes. Hire Obonzo’s “lawyers” and claim “Executive Action”. If Obonzo’s “lawyers” say it’s okay, it’s okay.
Would not surprise me.
Of course he could.
Stupid question.
Well Jim, that's what most people on this board have been saying for over a week now. A 10% tax on wire transfers to Mexico for a limited term, let's say five years, would more than pay for the construction of the wall.
It's just that simple.
He will have a pen and paper.
The very act of attempting to seize money transfers from illegals will have the effect of reducing illegal immigration.
A more effective method, that would be easier to get through the courts, would be to fine employers who have paid illegals - at a rate that would make it hard to justify hiring illegals in the first place.
Just the threat - the hint of seizing these funds is really all that is necessary. Trump is the only one with the cajones who's willing to even broach this subject.
Or would push Mexicans to use other means (Bitcoin, black market means, etc.) to transfer funds back to Mexico. A 10% tax would alter behavior, no doubt.
Yeah, a legal bar about as high as the law which requires everyone entering or leaving the United States with more than $10,000 in cash or its equivalent to file a declaration.
These seizures happen all the time, especially to Asians used to dealing in cash who come here for school or a luxury vacation. Once it is taken, the onus is on them to use our legal system to get it back. Most of them give up.
Ditto for contractors or others dealing in large cash transactions who get caught for petty ante traffic stops and are forced to prove that they came by that much cash legitimately.
And there we have it. This is asset forfeiture. Pure and Simple. Funny how the libertarians who moan and groan at this practice are apparently fine when Trump proposes it.
Obama has shown us that a President can pretty much do anything he wants.
That genie will be very difficult to re-bottle.
PROBLEM SOLVED Wire-transfer fraud is rampant-—b/c illegals send money across the border that was accumulated by falsifying documents to get tax dollars under multiple identities (could also involve forgery).
Wal Mart, Western Union, Money Gram and other entities wire-transferring $22 billion annually out of the US across the border need to be nailed.
RE: The very act of attempting to seize money transfers from illegals will have the effect of reducing illegal immigration.
How does this seizure of money DIFFERENTIATE between Mexicans who are here LEGALLY, Mexicans who have become American citizens and Mexicans who are illegal?
Or are we going to seize money from all of them without differentiating?
This argument makes no sense whatsoever. You know why Mexican nationals use Western Union? Because it is simple, easy, and most of all safe.
Do you think that these people would rather risk all of the money on a black market solution instead of knowing it will cost them an additional 10% through Western Union?
Even if they understood Bitcoin and how to transfer it, do you think that their family in Mexico would understand it and trust it?
No. It’s a ridiculous idea that Western Union would suddenly lose all of it’s business from Mexicans who trust it and know it.
It’s like the same claim that if gas goes much higher then Americans will drive less. There might be a slight modification of behavior, but it won’t be significant.
Not sure whether or not this is germane to the topic, but I just read an interesting comment on another site regarding financial workings between Mexico and the US
“Fun fact about NAFTA: before the ink was even dry the mexicans devalued their currency, triggering a crisis that we had to bail them out of. This wholesale destruction of wages and earnings south of the border was then blamed on NAFTA and is commonly cited as a reason both for mass immigration north, and why we have to accept mass immigration.’’
(posted anonymously, so it’s up in the air whether this is an ‘’improper’’ quotation)
Is this true? The commenter cited no link & I haven’t heard it before.
A reminder- Trump: [Mexico’s] leaders are so much smarter & more cunning than our own.
RE: Obama has shown us that a President can pretty much do anything he wants.
That genie will be very difficult to re-bottle.
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And you don’t mind if a President Trump continues this lawlessness?
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