A Biden Plan for the Northern Triangle: Helping to Fund It
A Biden Plan for the Northern Triangle: Helping to Fund It
Part 7 of 7
By David North on April 2, 2021
We have outlined a series of programs designed to make the three countries in Central America's Northern Triangle more attractive places to live, thus easing the current pressure on the southern border.
The program as a whole, by recent standards of government expenditures, is not costly, but we have a suggestion as to how to meet the Biden Plan’s continuing costs.
The one-time series of non-emigration payments to some individual residents of El Salvador, Guatemala, and Honduras, equaling something like $12 billion, suggested in our last post, will have to be met by the Treasury, but the ongoing economic aid, presumably running at the $2 to $3 billion a year level, can and should be, met from other sources.
The Major Source. The potential major source we have in mind has a number of attractive qualities: It will cost nothing to any law-abiding, tax-paying person; it will be paid largely by non-voters; and it will, to some extent, tap into the profits of the nation’s drug dealers. And we know it will work because it has been tested for a decade by one state, Oklahoma.
We are proposing a wire-transfer fee for all funds sent overseas from individuals in the U.S. Corporations are not covered by the suggestion, so there would be no hiccups in world trade.
In normal years, such as 2014, the flow of remittances from the U.S. to the rest of the world was in the neighborhood of $131 billion (according to Forbes), but that has slipped a bit because of Covid-19.
Our proposal is to establish a 2 percent fee on all outgoing wire-transfers made by individuals; these fees would come to about $2.6 billion a year. But this will cost nothing to tax-paying, law-abiding people because the fees will be credits against one’s federal income taxes, just like a deduction for taxes made by an employer.
The payment of the wire-transfer fee would lead to a dollar-by-dollar reduction in what one would owe in federal income taxes.
But the experience of Oklahoma, which has a 1 percent wire transfer fee that can be used vis-a-vis that state’s own income tax, is that few fees are so used, meaning that most of the fees represent the collection of a tax on what is otherwise un-taxed income.
In addition to getting 2 percent from the new, untapped source of a tax on remittances, an unknown amount could be raised from the fees being paid for wire-transfers by drug dealers.
This would be a very attractive source of funding.
Minor Sources. In addition, in an instance of robbing Peter to pay Paul, we suggest that some sliver of the massive USAID money flows to Afghanistan, Israel, Jordan, Egypt, etc. be siphoned off to the Northern Triangle countries.
Similarly, to the extent that USAID funds currently go to the Northern Triangle nations’ militaries, some of these resources should be reprogrammed to meet economic development goals.
(We had suggested in an earlier post that the U.S. military should start buying some of its uniforms from El Salvador’s clothing producers; that will not be easy to arrange, as we have learned since that there is a law against buying uniforms from foreign manufacturers.)
https://cis.org/North/Biden-Plan-Nor...elping-Fund-It
