Press Releases

Hern introduces bill to tax cartel’s international money transfers

Representative Kevin Hern (OK-01) recently introduced HR 8566, the Withholding Illegal Revenue Entering Drug Markets (WIRED) Act, to the House of Representatives.

Based on a similar policy enacted by the state of Oklahoma, HR 8566 imposes a 5% fee on remittances out of the United States, with the intention of penalizing illicit activity, such as drug and human smuggling. U.S. citizens who wire money out of the country are able to receive a refundable tax credit later. The funds raised through the HR 8566 will go towards U.S. Customs and Border Protection and Immigration and Customs Enforcement to better protect and secure our border.

“The crisis at our border gets more serious every day, while Democrats sit on their hands and ignore it,” said Rep. Hern. “Millions of Americans are in danger. We need every tool in our arsenal to combat the cartels and regain control of our border. This new remittance fee is a financial weapon we can use to target illicit activity funneling money from the US to the cartels while simultaneously supporting our agents down at the border. It’s a small step, but it brings us closer to securing the border and deterring illegal activity.”

The legislation is supported by the Federation for American Immigration Reform (FAIR) and NumbersUSA.

Statement of support from FAIR: “We applaud Congressman Kevin Hern for introducing a remittance fee bill modeled on his home state of Oklahoma, the only state in the Union that has successfully tapped into the huge outflow of money from illegal aliens. FAIR has long called for installing such a program at the federal level. WIRED takes the novel approach of assigning a 5 percent fee on remittance payments and then uses the money collected to improve border security. By imposing such a fee, it will infuse billions of dollars into our border security apparatus by charging the very people who exploited border weaknesses in the first place: illegal aliens. We encourage all members of Congress to support this important bill at a critical time.”

Statement of support from NumbersUSA: "It is no mystery that a major pull factor for illegal immigration to the United States is the promise of work, with little fear of enforcement consequences. Illegal aliens work here for much higher wages than they would earn at home—but still low enough to depress wages for American workers—and then they send money to relatives in their home countries. These remittances have become a major source of revenue for countries that are doing little or nothing to dissuade their citizens from migrating illegally to the United States. Meanwhile, our Border Patrol and Immigration and Customs Enforcement are underfunded and understaffed. They lack adequate border infrastructure and are totally unable to keep up with the flow of illegal aliens into our nation. Congressman Hern's bill builds upon the success of Oklahoma's remittance law, taxing the funds leaving the country and using that revenue to better fund America's immigration enforcement system. It effectively reduces the pull factor, while beefing up our ability to stop future illegal immigration. NumbersUSA applauds Congressman Hern for introducing this bill."

BACKGROUND INFORMATION

In 2020, individuals sent more than $69 billion out of the United States in the form of remittance payments, according to the World Bank. Based on the World Bank’s data, it is estimated that a 5% remittance fee could generate over $1 billion in annual revenue that will go towards securing our border. 

Remittances make up 24.1% of El Salvador’s GDP, 23.6% of Honduras’ GDP, and 14.7% of Guatemala’s GDP.

The State of Oklahoma imposes a 1% fee on remittance transfer payments, allowing citizens and legal residents to receive a refundable tax credit. A report found that 96% of the wire transfer fees were not used as tax credits and were used as additional revenues to the state.

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