Illegals are target in vote for wire tax By Howard Fischer, Capitol Media Services

February 16, 2006

Arizona could end up financing a wall or other barrier along its southern border on the backs of people sending money to their families back home in other countries.

On a party-line vote, Republican members of a House Appropriations committee approved a measure to impose an 8 percent tax on the electronic transfer of funds in and out of Arizona. The only exception would be for money wired to a merchant for goods or services.

Rep. Russell Pearce, RMesa, said the Bank of Mexico has reported that $20 billion is sent to citizens there from the United States each year. If 5 percent of all people in this country illegally are in Arizona, the levy would produce $80 million a year.

And thats just on the money being wired out.

Pearce said those dollars would go a long way to making it harder for people to cross into this country illegally.

He conceded some of that cash may be from longtime Arizona residents who are U.S. citizens but are trying to help relatives. And that means someone paying to help a Mexican relative would pay an 8 percent tax that isnt applicable to someone wiring money to family in New Jersey.

But Pearce said he believes most of those dollars are from people working here illegally. Worse yet, he said, they pay no taxes, either because they are being paid in cash under the table, or because even if they have forged documents and are paid by check, they know to declare multiple dependents to decrease the withholding of taxes.

HCR2037 is crafted to bypass Gov. Janet Napolitano, who has said she does not think a wall is a good idea. It would instead be referred directly to voters in November if it is approved by the full House and Senate.

The idea of a wall has been pushed since a barrier built by federal officials in California shifted illegal crossings into Arizona.

Contact Howard Fischer by telephone at () -.

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