Billions of dollars from the American economy are sent outside of its boundaries every year.
They are remittances sent by workers inside the United States, legal or not, to recipients, mostly families, in those other countries.
For example, the World Bank documents that those remittances account for about 17% of the entire GDP of Northern Central America.
India gets some $32 billion a year.
In Mexico, those funds make up a full 4.5% of the nation’s entire GDP.
Those interests, obviously, oppose a plan being considered by Republicans in Congress to tax that cash stream.
“Remittances are the fruit of the efforts of those who, through their honest work, strengthen not only the Mexican economy but also the United States’, which is why we consider this measure to be arbitrary and unjust,” charged Mexican President Claudia Sheinbaum.
But according to a report from the Daily Caller News Foundation, it’s under consideration.
The present version of the GOP reconciliation bill to implement Trump’s policies would tax those funds 5%.
That would be for non-citizens or foreign national senders who dispatch money outside the U.S.
“The Joint Committee on Taxation estimates the tax will generate more than $22 billion in revenue over a decade, which Republicans expect will help fund other parts of President Donald Trump’s agenda, including extending the tax cuts enacted during Trump’s first term,” the report explained.
Not only is the idea seen as raising revenue for America, but combatting drug trafficking and illegal immigration as well.
“It’s a two-fold win: taxing remittances will help slow down the cash flow to cartels and will also create a new revenue source we can use to build the wall and secure our border,” Rep. Kevin Hern, of Oklahoma, told the Daily Caller News Foundation. “We must be using every tool at our disposal to combat the cartels smuggling fentanyl into this country.”
Remittances to Guatemala, El Salvador and Honduras all have soared from up to 20% in just the past few months, the report said.
White House spokesman Alex Pfeiffer said the tax plan would reduce the “pull” factor of attracting illegals to the U.S.
