Illegal immigrants get nearly $9,000 a year each in subsidies from US taxpayers but Trump can change that
Smuggling at border is surging, Texas Department of Public Safety warns
Texas Department of Public Safety spokesperson Chris Olivarez discusses a surge in smuggling across the southern border.
Republican South Dakota Sen. John Thune, the incoming Senate majority leader, announced that defense and border security will be the Senate’s first order of business when the new Congress convenes in January. Using the reconciliation process, Thune aims to work quickly with the House.
A tax on remittances from illegal aliens should be part of this legislative package.
President Joe Biden’s open border policies resulted in an all-too-predictable wave of illegal immigration, with likely more than 16 million illegal aliens now residing in the U.S. And, for breaking the law, these migrants are treated to some $151 billion in net taxpayer support — about $8,776 per illegal immigrant and their children annually for social services, education, health care and law enforcement.
SOME MIGRANTS ANTICIPATING TRUMP'S POLICIES ARE ALREADY TURNING BACK HOME: REPORT
Growing realization of taxpayer dollars subsidizing this flow of humans trafficked across our borders by criminal cartels has boiled over into the consciousness of the residents of many big cities. People in Chicago or New York are rightfully angry at the mounting cost of services provided to people who aren’t legally in the nation.
Immigrants line up at a remote U.S. Border Patrol processing center after crossing the U.S.-Mexico border on December 7, 2023, in Lukeville, Arizona. (Photo by John Moore/Getty Images)
While some illegal aliens do pay taxes — for instance, property taxes and sales taxes can be hard to avoid — estimates are that this tax revenue only covers about a sixth of the expenditures illegal migrants impose. Further, many people here illegally work for cash under the table, typically avoiding any exposure to state or federal income taxes. Adding insult to injury, many illegal aliens net a profit from refundable tax credit programs.
Leverage reconciliation
To address this challenge, Congress should, as part of reconciliation in early 2025, act to levy a 50% tax on remittances sent from the U.S. to other nations by illegal aliens. In 2017, it was estimated that all immigrants working in the U.S. sent about $148 billion of their U.S. earnings abroad with about 19% of that sent to other nations by people working illegally in America that year.
Scaling up to account for Biden’s open borders, we can estimate that some 17 million people are now in the U.S. illegally, up from about 10.5 million in 2017, meaning somewhere around $46 billion is sent out of the nation annually by unauthorized workers.
A 50% tax on remittances sent abroad by people working in the U.S. illegally could generate upwards of $23 billion — a tiny fraction of the net $151 billion cost in social services incurred by illegal migrants. In the context of reconciliation, the added revenue could fund critical needs such as completing the border wall, enhancing security along both the southern and northern borders, accelerating deportations and increasing the number of immigration judges to ensure due process.
Oklahoma has already enacted a tax on all remittances, imposing a 1% fee on international wire transfers. The tax generated $13 million annually in 2016 and 2017.
Of course, people here illegally might not be inclined to pay a remittance tax. They may instead turn to alternative methods of expatriating their cash such as using crypto-currency or existing criminal human and drug smuggling cartels, many of which recent illegal immigrants are required to pay a portion of their earnings to anyway. To increase the compliance, non-payment of a remittance tax on illegal earnings could be classified as a felony, moving non-payers to the front of the line for deportation and permanent exclusion from the U.S.
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Mexican criminal cartel operations in America also send large sums of money south; a remittance tax coupled with enhanced financial institution scrutiny may shut down some of these financial highways.
Of course, financial institutions facilitating remittances without deducting the tax would also face substantial penalties, creating a robust enforcement mechanism to minimize evasion.
A group of 116 illegal immigrants, including 11 unaccompanied children, were apprehended in Eagle Pass, Texas, on Wednesday morning. (Texas DPS)
De facto foreign aid
Studies show that illegal immigrants send more money abroad when U.S. taxpayers give them social services. Put simply, when Americans give illegal immigrants hotel rooms, food and plane flights at no cost, those illegal immigrants simply increase their payments back home. Thus, all that social welfare spending American taxpayers are lavishing on their illegal guests is just another form of foreign aid.
Fairness and deterrence
A remittance tax on illegal aliens could offset a small portion of the costs borne by taxpayers. By targeting funds sent abroad by those circumventing legal pathways, the policy holds illegal aliens accountable without directly penalizing lawful residents.
Furthermore, the felony provision for non-compliance serves as a deterrent, signaling a shift toward stricter enforcement and prioritization of cases involving both financial evasion and illegal status.
And, while there will be an economic impact on remittance-receiving countries, many of which are U.S. allies or are nations in which the U.S. has a national security interest in their stability, the broader fiscal responsibility to American taxpayers takes precedence. Additionally, a remittance tax encourages legal immigration pathways, fostering a more orderly and regulated process.
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Chuck DeVore is a vice president with the Texas Public Policy Foundation, was elected to the California legislature, is a retired U.S. Army lieutenant colonel, and the author of the new book, "Crisis of the House Never United."
