Arizona wants to tax money wired to Mexico

[Tsyroc]

KVOA

Should Money Wired To Mexico Be Taxed

Is it fair to tax money that people send to family members in Mexico? One state lawmaker wants to do just that.

State Senator Pete Rios is sponsoring a resolution urging Congress to tax money that people wire to family members in Mexico. Under the plan, the federal government would give the money back to states. He says it would help ease tensions surrounding illegal immigration.

"That they set up a special fund to reimburse states in the southwest....because of immigrant services." Some say the plan isn't fair because it would tax people that are in the country legally. It has passed the State Senate and now goes to the House.

I agree that it isn't fair to people who are in the country and working legally. On the other hand, I have a feeling there are far more Mexicans working in Arizona who aren't here legally.

Heck, a woman I work with said that a bunch of her relatives are all in Arizona working on the same social security card. Why should I expect that they are all working jobs that pay them and deduct taxes like they are supposed to?

[Batman]

I'll just admit to my complete ignorance of the US tax system and ask wether this is actually legal.
Is there any basis in law for taxing money sent to another country on general principles, instead of for actual reasons like tax evasion?

I know illegal immigrants are technically guilty of that (among other things),
but unless there's the intent, leave alone a method, to only tax money wired bie illegal immigrants (assuming it's legal in the first place), this seems extremley unfair to me.

You may now laugh at my astounding lack of knowledge.

[Tsyroc]

I'll just admit to my complete ignorance of the US tax system and ask wether this is actually legal.
Is there any basis in law for taxing money sent to another country on general principles, instead of for actual reasons like tax evasion?

I know illegal immigrants are technically guilty of that (among other things),
but unless there's the intent, leave alone a method, to only tax money wired bie illegal immigrants (assuming it's legal in the first place), this seems extremley unfair to me.

You may now laugh at my astounding lack of knowledge.

I can't say that I know much more about it than you do. I'm sure the state probably could get away with taxing wire transfers to Mexico but it really isn't fair to people who are here legally and in the long run I think it would only cause people to either mail their money or set up business which wire the money to another state and then wire it to Mexico.

So I don't see it as a long term solution to the cost of dealing with illegals crossing the desert every year, but it might work for awhile.

I would expect that if this law passes some group will end up bringing a lawsuit to challenge the legality of the law.

[AdmiralTDM]

Crack down on those non-income tax paying MF'ers!

[The Kernel]

This will work...for about two seconds until wiretransfer companies open up in other countries that specialize in taking money from the US and transferring it to Mexico. This will only hurt the legal transfers.

[Mayabird]

I read a good article recently about money that's sent back to the home country of immigrants. There aren't good figures for many countries because the transfers go on in more shady manners. Tightening money restrictions for transfers only means that the illegal moneysenders get more business. Realistically the flow of money 'back home' can't be stopped or slowed for very long. I can't remember where I read this, though.