If you have not heard there is a house bill that was introduced that will dramatically raise the cost of sending money internationally. It is called HB2677. It will tax everyone who sends money internationally with the intent to build a fence between Arizona and Mexico. The problem with this bill is that it is a large new TAX. They are going to use it for one of the favorite causes of the tea party, to build a border fence, but let’s not get suckered into that. The tea party is first and foremost an anti-tax group, even if they will use the money for one of our favorite causes. It is just a bribe, and I am shocked and dismayed that the leaders of the tea party have gotten behind this new tax.
The major problem with the bill is that it taxes “Any entity” that sends money overseas. That means that the next time there is a natural disaster in some faraway place Arizona will have their hand out, take money from the poor and hurting who are in crisis. I have heard from some sources that they want a 5% fee on all transfers. The typical fee right now is about $3.50 for the first $500. This would add $25 to that fee, an outrageous amount.
Another problem is that it is easily circumvented. People who are smart will avoid this law by setting up intermediaries. An example would be that someone would set up an office in Nevada, and have their offices in Arizona collect the money, send it to Nevada and then it would be wired from Nevada to the receiver. They would do this for a fee but it will be well less than 5%. People are smart and this would really reduce the amount that is collected.
This bill is designed to build a wall between us and Mexico, so I would be FOR this bill if they restricted it to only personal remittances to Mexico. They may even include Central American nations if they like, but adding this tax to everyone who sends to any location is way too broad.
The key to success for Arizona is to be free to do business and this bill puts a transaction tax on any money sent out of the country from Arizona. The bill does not state the rate of the tax but I know the fence will be costly so it will likely be at least a few %. Most importers have very slim margins and such an added cost will make them flee our state to go to ones that don’t have this cost.
This punishes people like me who want to do nice things and send money overseas. This bill will dramatically increase the current cost of sending money. Right now I use Wells Fargo for most sends and it only costs $3.50 no matter how much I send. Sometimes I use MoneyGram and they charge $10 for the first $500. Even a 3% tax on these transfers would take money and food out of the hands of the people I try to help. I also send all of this money to either Asia or Europe, and that has very little to do with a fence between us and Mexico.
I would be for this if they changed it to state that it would only effect personal wire transfers going to Mexico, or even Mexico plus central and South America. But this idea of doing it for all business, charity and personal wire transfers for the entire world is a crazy dumb tax that should not be passed. I am shocked that someone as conservative as Judy Burges would put her name on this totally unfair and punitive tax.
Peoria South Tea Party Leader
Area Coordinator, PC and SC in the Republican Party in LD9.
Business Owner, Importer and Entrepreneur.