President Donald Trump has not yet signed an executive order about his proposed border wall. An executive order would only do so much as Congress would have to appropriate funds to actually construct the wall. A wall built to the dimensions and specifications promised by Trump would cost about $25 billion to $31.2 billion and run 1000 miles along the border with Mexico.
Since the Mexican government won’t pay for the wall and holding up all remittances in order to get the Mexican government to pay for it runs into constitutional problems, some like Mark Krikorian of the Center for Immigration Studies have proposed a nation-wide refundable fee (a tax with another name) on wire remittances to fund the wall. Taxing remittances of illegal immigrants will not raise enough funds for a huge new border wall.
A remittances tax would have to be very high to raise enough revenue to pay for a wall, even assuming there is no fall off in revenue at higher rates. The state of Oklahoma has a wire transmitter fee equal to about one percent of the funds transmitted. In 2016, the tax raised $12,696,879.25 or $133.65 per illegal immigrant in the state. Back of the envelope, a nationwide version of the wire transmitter fee would only raise about $1.6 billion annually. If the nationwide wire transmitter fee tax was 5 times as high as in Oklahoma then it would raise enough money to pay for the wall in three to four years assuming there is no fall off in revenue at such a high rate or other disruptions don’t occur.
Oklahoma labels this tax a fee because it’s a fully refunded tax credit. A full 96 percent of those who pay the fees don’t claim the credit. David North of the Center for Immigration Studies argues that illegal immigrants pay virtually the entire tax because most of the credits aren’t claimed. That’s probably right but North overstates his case. The IRS estimates that about one in five folks eligible for the EITC do not claim it although there are many improper payments made too. Furthermore, between 55 percent and 75 percent of illegal immigrants file tax returns, have money withheld from their paychecks, or both. That being said, most of the people paying the tax are likely illegal immigrants but many Americans also pay directly.