07-10-2017, 10:34
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#2205
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Cable Forum Team
Join Date: Jun 2003
Posts: 15,118
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Re: U.S President: Donald Trump
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Originally Posted by Hugh
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Election Pledge. “Mexico to pay for the wall, in some form or other”
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So, how would that money be recouped from Mexico?
There are a number of options, but nothing has been officially decided.
1. Raising tariffs on imports. Mr Trump's spokesman, Sean Spicer, said on 26 January that the president wanted a 20% tax on Mexican imports to pay for the wall, although he later added that it was one of several options still being considered. "By doing it that way we can do $10bn (£8bn) a year and easily pay for the wall, just through that mechanism alone," he told journalists. Forbes has argued that existing duties on Mexican goods would have to be quadrupled to pay for the whole of the wall, even if its cost were spread over 10 years. US companies would also almost certainly source products from elsewhere, reducing the revenue. The Mexican government could respond by removing tax benefits for US foreign investment. The investment totalled $101bn in 2013.
2. Remittances. Two possibilities here. President Trump could try to use laws aimed at preventing money-laundering to halt Mexicans working in the US from wiring money to families back home. The sector is huge - about $25bn a year. The hope is that the threat would cow Mexico into coughing up for the wall. The second option is to tax the remittances. Either a flat tax on all, or a far more punitive tax on those who cannot prove legal residence. But Mexicans affected by remittances might simply avoid using the wire companies and find undocumented third parties to transfer the cash.
3. Levying a "border adjustment" tax. House Republicans propose lowering corporation tax from 35% to 20% but base it on the place of consumption, not production. Imports would be taxed but not exports. A 20% tax, given the $60bn trade deficit with Mexico, would raise $12bn a year. Mexico could do little, the Washington Post reports, because border adjustments would apply to all US trading partners and would not therefore be seen as a singling out Mexico.
4. Increasing travel visa and border crossing fees. Targeting countries that have a bad record on illegal immigration, including Mexico, for higher visa fees would be popular among many Republicans. Along with increasing the fees on cars and individual people crossing the border it would raise revenue, but would probably not be enough alone.
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http://www.bbc.co.uk/news/world-us-canada-37243269
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