Bill Overview
Title: To impose a fee on certain remittance transfers to fund border security.
Description: This bill imposes a 5% transfer fee on remittances sent to recipients outside of the United States, to be paid by the sender. The bill also establishes for U.S. citizens a tax credit equal to the amount that the citizen taxpayer paid in such transfer fees for any taxable year. The bill also provides funding for various border-related activities, such as to build a barrier along the U.S.-Mexico barrier. The funding shall be equal to the amount collected by the transfer fee minus the tax credits allowed.
Sponsors: Rep. Hern, Kevin [R-OK-1]
Target Audience
Population: People living in countries outside the United States who receive remittances.
Estimated Size: 24000000
- Remittances are commonly sent by immigrants living in the United States to support their families in their home countries.
- The World Bank estimates that nearly 800 million people are supported by remittance income globally.
- The imposition of a 5% fee will likely reduce the amount of money sent in remittances, impacting the households and communities that rely on this income.
- Latin American countries are significant recipients of remittances from the United States, particularly Mexico, which is the leading recipient of such remittances globally.
- The ability to claim a tax credit is relevant primarily for U.S. citizens, which means non-citizen senders may bear the full cost of the fee without such relief.
Reasoning
- The imposition of a 5% transfer fee on remittances primarily affects immigrants, many of whom send money to support family members outside the U.S. Although U.S. citizens can offset this with a tax credit, non-citizens will bear the full cost of the fee.
- The target population for this policy is sizable, approximately 24 million people, including both citizens and non-citizens sending remittances.
- Not all individuals sending remittances are significantly affected, as those sending small amounts might not experience a considerable financial burden.
- The policy aims to generate revenue for border-related activities while potentially reducing net remittance flows.
- The $900 million budget in year 1 suggests that the policy seeks to balance economic impact with its security objectives, considering the tax credits distributed.
Simulated Interviews
Construction Worker (Los Angeles, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- The policy will cost more money to send the same amount. I worry about sending less to my family who depends on this money.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 7 |
| Year 20 | 6 | 8 |
Nurse (Miami, FL)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- The tax credit is helpful, but it's still inconvenient to pay extra upfront. People living in my home country rely on my support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Software Engineer (Houston, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- As a U.S. citizen, tax credits cover the fee for me, but the paperwork is annoying.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Taxi Driver (New York, NY)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- The additional fee will hurt. It’s hard already to make ends meet, and I need to support my family back home.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 4 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 6 | 7 |
Freelancer (Chicago, IL)
Age: 26 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I rarely send money, so the fee doesn’t impact me much. Still, I feel bad for those who need to send regularly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Retired Teacher (Phoenix, AZ)
Age: 60 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- The tax credit covers it for me, but it's still a bit of a hassle.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Restaurant Manager (Seattle, WA)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- The transfer fee will increase my costs significantly when I send money for business investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 9 |
Accountant (Atlanta, GA)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- The policy is inconvenient but the tax credit helps. My parents need this support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 10 |
IT Specialist (Dallas, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- I don’t send much regularly, so the policy doesn’t affect my budget too much.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Entrepreneur (San Francisco, CA)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 13/20
Statement of Opinion:
- The fee will limit how much I can send home. I need to balance supporting my family and my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 9 |
Cost Estimates
Year 1: $900000000 (Low: $700000000, High: $1100000000)
Year 2: $927000000 (Low: $721000000, High: $1133000000)
Year 3: $954810000 (Low: $742630000, High: $1166990000)
Year 5: $1010394035 (Low: $785915987, High: $1234872071)
Year 10: $1130616816 (Low: $879121892, High: $1382111739)
Year 100: $5205061930 (Low: $4049845003, High: $6360278856)
Key Considerations
- The remittance fee will mainly affect non-citizen immigrants as they are less likely to benefit from the proposed tax credit.
- There is a potential for significant impacts on foreign economies, particularly those heavily reliant on remittances from the U.S.
- U.S. citizens may adjust their remittance behaviors to maximize the benefit of the tax credit, which could affect total revenue collected.