srinath wrote on 04/30/20 at 16:49:13:However the remittances needing to be taxed - Trump is too stupid to even think of it. That's a separate issue.
BTW this is a huge deal - and no one has got a grasp on it.
Most Mexicans send $$$ as remittances one of 2 ways -
I know, I've used both to send $$$ to India.
1. Western union/other wire transfer. This is simple - there will need to be a way to validate the status of the sender at the point of transaction. For example if I show up trying to send $$$, I would need to prove I am here legally and prove that the $$$ got to me legally. I make 100K and I send 20K a month back, 5 months on - well, they should know I'm dealing crack. OK Simple - fully tag and bio Id and document all immigrants and non immigrants. Minimum work, maximum benefit.
2. What is called in India the "havala" method. You pay $$ to someone here, and their agent will pay your family $$$ in India because they're going to have people come here and take the $$$ etc etc. Now, this is easily countered by #1 and right there they know you don't do #2 unless you're doing something fishy, and you can also require $$$ used outside of US to be invalid unless its legally recognized as valid - and after all its a piece of paper - it can be declared as "non legal tender" unless verifiable. India was a hot bed of people going to Singapore to bring back stuff, and they'd smuggle US$ out. In any case we may not be able to tax remittances but atleast we choke it out to remove the incentive of coming to the US illegally.
Cool.
Srinath.