One of the most under-discussed drivers of illegal immigration is the explosion of remittances, which has created a major economic incentive for foreign nationals to pour into the U.S.
Immigrants of both the legal and illegal variety are coming to the U.S., earning money, and sending it back home instead of putting it into the U.S. economy. Take for example, Nicaragua, which received a record $462.4 million in remittances during the month of May, with $385.9 million coming from the U.S., according to a report cited by Breitbart News. As Breitbart points out, not only is this money not going into the U.S. economy, but it is going to a repressive, communist regime in Nicaragua supported by U.S. adversaries, including China, Russia, and Iran. This is a major problem for the U.S.; Americans have a right to expect that money earned through the American economy will go back into the American economy, not to foreign countries.
Of course, it is reasonable to expect that people who come here will send some money they earn back to family members who still live in their home countries. However, this must be done in a responsible way that benefits the U.S., and does not create harmful incentives.
Every year, hundreds of billions of dollars in remittances are sent from the U.S. to foreign countries. In 2022, India received more than $100 billion in remittances from the U.S., while Mexico received more than $60 billion. While the income earned to fund these remittances is taxable just like any other income, the remittances themselves aren’t taxed in the U.S. According to a 2019 study, the U.S. loses $150 billion annually in remittances, a number that is certainly much higher now due to the influx of mass migration that has taken place in recent years. This is a scam and yet another example of how mass migration negatively impacts the American people.
The promise of remittances creates a perverse incentive structure for foreign nationals to take the perilous journey to the U.S., especially given how far the U.S. dollar goes in foreign countries. In Mexico, for example, the minimum wage is less than $15 U.S. dollars a day. In many American cities, such as New York, which has been flooded with illegal aliens, the hourly minimum wage is $15 an hour. It’s no wonder why so many foreign nationals have deemed it worth the risk to make the dangerous trek through Latin America. For many foreign nationals who resettle in American cities, even a minimum-wage job could offer the opportunity of generational wealth to the foreigner and his family. One of the top immigration-related priorities for U.S. lawmakers should be to shut down the economic incentives that fuel illegal immigration. This starts with taxing remittances from illegal aliens at or close to 100%. Those who enter our country illegally and violate our laws should not be allowed to profit from doing so.
Other ways to deter economic incentives for illegal immigration include banning illegal aliens from access to taxpayer-funded programs, and cracking down on employers and businesses who hire illegal aliens. With tens of millions of illegal aliens now residing in the U.S., there has been a long-running debate on both the need for and the practicality of mass deportations. Deportations are an essential part of enforcing immigration law, and will need to be carried out on a large scale to restore American sovereignty and security. However, it is possible that many, if not most of the illegal aliens currently living in the U.S. will leave voluntarily if the economic benefits of illegal immigration are revoked. This starts with taxing remittances.
It is simply unacceptable that our government allows foreign nationals to illegally enter our country, take job opportunities from American citizens, and then send the money they earn back to their home countries, often to the benefit of foreign regimes deeply hostile to the U.S. Not only would taxing remittances deter illegal immigration, but the revenue generated from it could be used for border security priorities, including a wall at the southern border, more Border Patrol agents, and more Immigration and Customs Enforcement agents.
Heavily taxing remittances is a no-brainer policy with almost zero downside for the U.S., which is probably why it hasn’t happened. If the U.S. attempted to tax remittances, there would be an immediate outcry from special interests and anti-borders groups about how unfair and inhumane such a policy is, but foreign nationals and supporters of mass immigration should not be the priority of the U.S. government—U.S. citizens should be.
It’s past time for the U.S. government to tax remittances, and tax them heavily.
William J. Davis is a communications associate for the Immigration Reform Law Institute, a public interest law firm working to defend the rights and interests of the American people from the negative effects of mass migration.
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