Representative Kevin Hern (OK-01) joined us on Thursday for our monthly podcast to talk about his recently introduced bill, HR 8566, the Withholding Illegal Revenue Entering Drug Markets (WIRED) Act, to the House of Representatives.
Based on a similar policy enacted by the state of Oklahoma, Hern said HR 8566 imposes a 5% fee on remittances out of the United States, with the intention of penalizing illicit activity, such as drug and human smuggling. U.S. citizens who wire money out of the country are able to receive a refundable tax credit later. The funds raised through the HR 8566 will go towards U.S. Customs and Border Protection and Immigration and Customs Enforcement to better protect and secure our border.
In 2020, individuals sent more than $69 billion out of the United States in the form of remittance payments, according to the World Bank. Based on the World Bank’s data, it is estimated that a 5% remittance fee could generate over $1 billion in annual revenue that will go towards securing our border.
Remittances make up 24.1% of El Salvador’s GDP, 23.6% of Honduras’ GDP, and 14.7% of Guatemala’s GDP.
The State of Oklahoma imposes a 1% fee on remittance transfer payments, allowing citizens and legal residents to receive a refundable tax credit. A report found that 96% of the wire transfer fees were not used as tax credits and were used as additional revenues to the state.
Hern also talked about the nation’s two consecutive quarters of shrinking GDP – the technical definition of a recession. Additionally, the Congressman addressed the supply chain crisis in America.