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Like it or Not, Mexico Will Pay for Trump’s Wall

Published January 6, 2017 in Economics , Government , Politics - 0 Comments
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Mexico likely will pay for Trump’s wall. The mechanism has been bloody obvious ever since the idea was raised. Instapundit sums it up in one sentence:

DUDE, ALL IT TAKES IS A TAX ON REMITTANCES: Vicente Fox to Trump: When will you understand that I’m not paying for that f***ing wall? And you think there’s a political downside to taxing money sent from the U.S. to Mexico?

Mexicans working abroad sent $24.8 billion home in remittances in 2015. That’s more than their oil industry earned in the same year – an industry that once generated 80% of the Mexican economy. Let’s be honest: we all know that most of that comes from the United States. Slap a 10% tax on that and it’s more than $2 billion dollars a year. That’s plenty of money to pay for a wall – a big wall. And Mexico can’t do a thing about it, no matter what Vicente Fox says.

As Instapundit notes, it’s hardly going to be an unpopular tax. And when it’s done paying for the wall, American citizens (you know, the ones who can actually vote) will continue to find it popular. Why? The only reason anybody ever likes any tax: because it will tax someone else.

Interestingly, from a policy standpoint, the tax also helps with another issue. It discourages illegal immigrants. Remove the incentives and you reduce the behavior. Forget for a moment whether you agree with the policy or not. In terms of implementation, this kills two birds with one stone.

The new Congress has already found a legal mechanism to build the wall. The tax to pay for it is coming soon – mark my words.

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