FACT CHECK: Would Imposing Fees On Remittances Sent To Mexico Help Pay For The Border Wall?
In a recent post shared on X, formerly Twitter, Florida Republican Gov. Ron DeSantis claimed imposing fees on remittances sent to Mexico by migrants entering the country illegally would help pay for the U.S.-Mexico border wall.
Admitting that the famous promise from 2016 to have “Mexico pay for the wall” was just an empty campaign slogan is bad enough.
What makes it worse is that there is actually a way to get Mexico to pay for the wall: impose fees on remittances sent to Mexico (and other countries)… https://t.co/uND1ig1AjZ
— Ron DeSantis (@RonDeSantis) October 2, 2023
Drug cartels, including the Sinaloa Cartel, are using remittances to wire their profits back to Mexico, according to Reuters. The cartels have recruited civilians in the scheme and have coordinated money drop-offs and pick-ups using WhatsApp, the outlet indicated.
DeSantis claimed imposing fees on remittances sent to Mexico by migrants entering the country illegally would help pay for the U.S.-Mexico border wall. DeSantis made the claim after re-posting a video of former President Donald Trump at an Oct. 1 campaign rally in Iowa in which he said there was “no legal mechanism” in place for Mexico to fund the border wall.
“Admitting that the famous promise from 2016 to have ‘Mexico pay for the wall’ was just an empty campaign slogan is bad enough. What makes it worse is that there is actually a way to get Mexico to pay for the wall: impose fees on remittances sent to Mexico (and other countries) by illegal aliens,” the post reads. “As President, I will get this done. No more bluster! Results are all that matter!”
The Cato Institute, a libertarian think tank, wrote in January 2017 notes that a tax on remittances would have to be very high in order to pay for the border wall. The article also specifies that a wall spanning 1000 miles along the U.S.-Mexico border would cost about $25-31.2 billion. In August 2017, the Brookings Institution stated a border wall would cost around $21.6 billion, according to an internal Department of Homeland Security (DHS) report, though this number may be an underestimation.
The Center for Immigration Studies (CIS), a think tank that advocates for lower immigration levels, wrote in January 2017 that “taxing remittances would in fact be a levy against the Mexican state since it relies so heavily on that money as a part of its annual economy.” (RELATED: Did Joe Biden Eliminate $1.7 Trillion Of The Federal Debt?)
“But a tax on remittances would go much farther than just Mexico, because the dollar flow outward is like a global sunburst, hitting virtually every nation that contributes to our yearly inflow of migrants: they arrive, begin employment legally or otherwise, and the funds begin pouring out,” CIS wrote.
The Cato Institute stated that most individuals would circumnavigate the tax by using either credit unions or banks exempt from transmitter fees or by the black market. The article also suggests other methods could include the utilization of gift cards or even cryptocurrency to avoid paying a tax.
David Bier, associate director of immigration studies at the Cato Institute, reiterated that requiring a tax on remittances would not be able to cover the cost of the wall.
“You can always require a tax to pay for the wall. However, the quantity from the country and illegal immigrants is not sufficient to cover the cost. So [it’s] just not enough money,” Bier said. “Any tax above a certain level would result in evasion. You can’t impose a tax on all remittances, [there would be a transition] to other ways that cannot be taxed and that would defeat the purpose of the effort.”
Bier also highlighted that when it comes to remittances, “there are a million different ways to transfer money internationally,” including sending cash through the mail or using Bitcoin or other cryptocurrencies as an alternative to a wire transfer system. In addition, Bier said money could be smuggled across the border and emphasized the need for inspection systems, which would be “foiled by drug traffickers,” who often obtain their money via smuggling.
Asking the Mexican government to fund the border wall is not feasible either, because “they’re not going to fund another government’s project,” Bier said. (RELATED: Will Hurd Claims 141 People Drowned In The Rio Grande In 2022)
Dr. Tara Watson, an economist from the Brookings Institution who focuses on U.S. social policy including immigration, shot down the idea of imposing fees on remittances as well.
“[It’s] not a sensible way of trying to achieve that goal,” Watson said of imposing fees on remittances while speaking with Check Your Fact via phone.
Watson said the process of migration is changing, as many people are now presenting themselves to the border to seek asylum. Furthermore, a lot of undocumented workers in the U.S. are not overstaying their visas, so a border wall “doesn’t have an impact on that type of arrival.”
“You’re not controlling migration and it’s going to cost you a lot of money,” Watson explained. “There are already some walls along a good length of the border, so a border wall is symbolic. It’s meant to be about closing America off to the rest of the world.”
Involving financial service companies such as Western Union is not a feasible alternative when discussing imposing fees on remittances, either, according to Watson.
“There’s an implementation challenge with that,” Watson said. “Because [financial service companies] are interested in having good relationships with their clients. They’re not interested in enforcing immigration.”
The more effective approach, Watson said, is to expand legal pathways.
A 2017 video from Cronkite News indicated that taxes on remittances would “devastate the poor in Mexico.” Data from the National Population Council suggests one out of 10 Mexican families, or about 1.3 million homes, depend on remittances as of 2010. Families in Mexico typically receive remittances, or payments, from their loved ones who are working in the U.S. while they are undocumented, according to the Cronkite News. Remittances reached $142 billion in 2022 for the Latin American and Caribbean regions, also according to the World Bank.
Check Your Fact has contacted DeSantis and Trump’s campaign spokespersons and other multiple immigration experts for comment and will update this piece accordingly if one is received.