Oklahoma Again Reports an Increase in Taxes on Wired Remittances

By David North on September 29, 2015

With the U.S. Congress apparently poised to reduce fees on employers who hire massive numbers of foreign workers, a loss to the government of between $100 million and $250 million, it is a pleasure to note that Oklahoma continues to collect increasing amounts of money from its tax on wire transfers of money made by individuals (many of whom are illegal aliens.)

Oklahoma, as we report every year at about this time, collects 1 percent from all out-going, out-of-state, person-to-person wire transfers of money; many of these transfers are remittances from illegal aliens in Oklahoma to their relatives in their homelands. It is the only state to do so.

The money is not, strictly speaking, a tax; it is a deduction, much like what most Americans find in their regular pay stubs. If you pay your state income taxes, you can use these 1 percent deductions as a tax credit. In that case the whole procedure is a wash.

But Oklahoma tax officials told us a year or so ago that 96 percent of the wire transfer fees are not used as income tax credits — so the great bulk of the funds are additional revenues to the state, all taken from people who do not pay their state income taxes.

This should be a dream for politicians — 96 percent of this funding source is being collected from people who are tax cheats and who cannot vote.

This year, page 12 of the Annual Report of the Oklahoma Tax Commission shows receipts of $11,322,559 from this source. That's an increase of 7.8 percent from the prior year, which was, in turn, a 7 percent increase from the year before.

It continues to puzzle me why state legislatures, particularly Republican-controlled ones, do not tap into this golden, if not huge, source of funds.

Similarly, why doesn't Congress adopt this procedure? It would bring in at least one to two billion a year in a tax on a non-voting population. The tax, ideally, would be imposed only in those states that do not have such a system — thus protecting Oklahoma from any revenue loss.


Topics: Remittances