5

Donald Trump claims that Mexico will pay for the wall, but surely now he's signed an executive order there would be some form of timeframe for the construction to start taking place?

The Trump administration can't expect Mexico to come up with any funds within that timeframe.

What current sources of funding is Donald Trump planning to use?

6

Currently, he's using taxpayer's money.

According to this article by CNN, he will use federal funds initially.

Trump confirmed his plans to build the wall with federal funds and then seek reimbursement from Mexico, an idea Mexico has rejected. But negotiations, he said, would begin "relatively soon."

(emphasis mine)


Eventually, he still plans to let Mexico pay for it.

In an another article by CNN, he will use Mexicans' remittances to pay for the wall.

Trump has suggested some of the $25 billion in annual remittances that migrants return home would be retained to pay for the border wall -- a project Mexico opposes and which Peña Nieto has said Mexico would never pay for.

(emphasis mine)

This source of funding is possible since almost $25 billion was remitted from the US to Mexico in 2016.

Between January and November of 2016, $24.6 billion flowed back to the pockets of Mexicans from friends and relatives living overseas, according to Mexico's central bank.

However, some have expressed doubt.

Since the Mexican government won’t pay for the wall and holding up all remittances in order to get the Mexican government to pay for it runs into constitutional problems, some like Mark Krikorian of the Center for Immigration Studies have proposed a nation-wide refundable fee (a tax with another name) on wire remittances to fund the wall.

Taxing remittances of illegal immigrants will not raise enough funds for a huge new border wall.

3

According to WaPo, by using the "Border adjustment": https://www.washingtonpost.com/opinions/yes-trump-can-make-mexico-pay-for-the-border-wall-heres-how/2017/01/17/7edf7872-dcbf-11e6-ad42-f3375f271c9c_story.html

The House Republicans’ plan would lower the corporate tax from 35 percent to 20 percent and apply the tax based on the location of consumption rather than the location of production. It would do this through a “border adjustment” that exempts exports while taxing imports. Under the plan, all imports coming into the United States would be subject to the 20 percent tax, but exports would have the tax refunded — making them tax-free.

Supporters see it as a way for Trump to follow through on his campaign pledge to tax imports and support exports without resorting to tariffs that would provoke a massive global trade fight. Right now, more than 160 countries around the world have a “border adjusted” value-added tax (VAT). So unlike tariffs, a border adjustment should be able to pass muster with the World Trade Organization.

But I don't understand this myself - how is an "import consumption tax" no different to an import tariff in practice - (assuming the majority of imported goods are not then exported - a la Japan's post-war economy built on importing raw materials and exporting finished goods, e.g. high-tech electronics)

  • 2
    When you impose a tax on import, it is the importer that has to pay them. Generally importers are US companies, so they either have to pay those taxes out of their pocket or pass them on in raised prices to the US consumers they sell the goods to. So it is actually Americans who pay. – DJClayworth Jan 10 at 22:27

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