The state of Tennessee is taking action where Congress has failed by voting to put a tax on U.S. dollars wired by migrants to other countries.
The bill (HB2502/SB2166) filed by Republican House Speaker Cameron Sexton and Republican Sen. Bo Watson would place a $10-per-transaction fee on money transfers going out of the country, or a two percent fee on amounts exceeding $500, according to Tennessee Outlook.
The bill would exclude banks and corporate transfers and focus on personal transactions conducted at retail outlets, currency exchanges, and Western Union transfers.
The new tax could generate $183 million in new state revenue annually, an analysis says. The revenue generated would be allocated across the state government, including 20 percent for the general fund, 38 percent for a TennCare “buyback fund” used to compensate hospitals, 18.5 percent for state childcare programs, 18.5% for housing, and five percent for paid teacher public school internships.
Officials say that there were more than 16 million such transfers in Tennessee, totaling to $5 million in U.S. dollars sent outside the USA.
This practice of sending U.S. dollars back to an immigrant’s home country is called a “remittance.” This refers to tens of billions of dollars that are sent out of the United States each year. For instance, Heritage estimated that in 2011 alone, $52 billion U.S. dollars was sent outside the United States by immigrants, illegal and legal alike. And, since then, it has gotten worse.
That desire to send money home is a key point that is rarely discussed in this border crisis. Remittances are a huge problem for the United States because that is money being bled out of our domestic economy and sent overseas to other nations. In 2019, for instance, it was estimated that the United States lost $150 billion a year from the economy as foreigners sent that money back to their home countries. And that number has only climbed since President Joe Biden threw the borders wide open.
This is money that is not being spent in the United States. It is money not going to shopkeepers, schools, investments, or bank accounts. It is money lost. And it is a growing economic deficit.
When Donald Trump entered office, he made efforts to put up more roadblocks to the George W. Bush policies that had loosened the ability of foreign residents to send remittances back home.
In 2006, Bush created the “Directo a Mexico” program to make it easier for illegal aliens to send U.S. dollars back to Mexico and other foreign nations. Trump placed restrictions on some of these remittance practices, but when Joe Biden came to office, he reversed some of those restrictions and once again opened the spigot for immigrants to send U.S. dollars away from our economy.
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