A Little Good Immigration Policy News from. . .Oklahoma

By David North, January 7, 2013

A small bit of immigration policy good news floated out of Oklahoma recently, one involving a highly useful tax idea that should be spread nationwide.

Though the foreign-born population there is a mere 5.1 percent, according to the U.S. Census, compared to 12.5 percent nationally (in 2009), Oklahoma has a state legislature that is interested in combating illegal immigration, and it is quietly showing the way for the rest of us.

The development, that secured absolutely no press attention, deals with the 1 percent fee which the state attaches to all wire transmissions of money leaving the state for anywhere in the world. These transmissions often -- but not always -- consist of funds from illegal aliens being sent to their families overseas, moneys which are probably escaping any federal or state income taxes. The fees are not taxes, as such, they are regarded as credits against the Oklahoma state income tax, and thus do not cost a penny to anyone paying their state taxes.

The good news is that these fees have withstood substantial political pressures from both the government of Mexico and from Western Union and other wire service operators. The fees are still alive and well and helping to support state government, and their volume has grown in recent years.

A couple of years ago I wrote a backgrounder for CIS entitled Charging More for Immigration: Closing Financial Loopholes in the U.S. Migration Process in which I described this Oklahoma-only fund-raising program.

At that time the state was getting $3.9 million every six months from this source, or $7.8 million a year. Last month I got an email from the Oklahoma Tax Commission, in reply to a question of mine, saying that the collections in fiscal year 2012 had been more than $8.9 million, an increase of 14 percent.

In my earlier report I had estimated that such a transfer fee, if imposed nationally, would produce at least $250 million a year for the US government; that estimate would now need to be increased by 14 percent.

Any such levy, needless to say, would help in a small way to cut the federal deficit and should be considered by this Congress. (There should be a provision, of course, that the fee not be levied in states that already have it; that would protect Oklahoma’s tax coffers.)