Much ado is made about the drain on taxpayer-funded programs by illegal aliens. According to a recent study by the Federation for American Immigration Reform, for example, the fiscal burden of illegal immigration in Texas is a whopping $13.36 billion per year.
A much less visible and talked-about consequence of illegal immigration is the large amount of money that is taken out of the Texas economy and pumped into various nations across the globe through remittances. The total number of dollars sent out of Texas is staggering. In 2021, remittances from Texas to Mexico alone totaled $7.8 billion.
With nationals from more than 165 countries apprehended along the Texas-Mexico border in the last two years, many other nations are reaping the significant benefit of payments made from illegal immigrants who are able to illegally obtain employment in the United States. The ability to send money home to their families is a significant driver of illegal immigration.
Perhaps even more troubling is the fact that these remittances are often a form of extortionate payment to the narcoterrorist drug cartels who put their human cargo on payment plans once they reach their destination in the United States. A recent report shows that $4.4 billion of the $58 billion in remittances to Mexico is related to criminal activity. These cartel-related human smuggling operations are now a $20 billion per year economy. With record numbers flooding across last year, these figures are sure to increase.
One potential solution to recoup the losses to the Texas economy is to put a tax on all remittances leaving the United States. State Rep. Tony Tinderholt (R–Arlington) has filed HB 4743 to do just that. This bill puts a 10 percent tax on money transmissions sent out of the United States through a money transmission business. The proceeds from these transmissions would be put into the general fund and could be used for important projects like buying down property taxes for Texas residents or simply recouping some of the costs of illegal immigration into the state. It would also have a chilling effect and ensure that more dollars are spent in Texas rather than sent abroad to countries where there is significant corruption.
It’s important to note that this bill would not target all money sent to foreign nations from Texas through banks and other forms of legitimate business transactions, but would specifically target the types of remittances that are often used by illegal aliens to send money to their country of origin or, as mentioned above, to cartel smugglers.
At Texans for Strong Borders, we are firmly in support of this and any other legislation that targets remittances to foreign nations. Internal enforcement mechanisms like this that target the incentive structures driving illegal immigration into the state are a key element in any effective border security plan.
This is a commentary published with the author’s permission. If you wish to submit a commentary to Texas Scorecard, please submit your article to submission@texasscorecard.com.
