Speakers<\/b><\/b><\/h3>\n
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- Helen Dempster<\/b>, Policy Fellow and Assistant Director for the Migration, Displacement, and Humanitarian Policy Program at the Center for Global Development<\/li>\n
- Dr. Manuel Orozco<\/b>, Director of the Migration, Remittances, and Development Program at the Inter-American Dialogue, and Senior Fellow at Harvard University\u2019s Center for International Development<\/li>\n
- Ariel Ruiz Soto<\/b>, Senior Policy Analyst, Migration Policy Institute<\/li>\n
- <\/i>Ana Valdez<\/b>, President and CEO of the Latino Donor Collaborative<\/i><\/li>\n<\/ul>\n
\nThe tax would apply to an estimated 40 million non\u2013U.S. citizens, including green card holders, temporary workers, and undocumented immigrants. Critics argue it amounts to double taxation and may violate the Constitution\u2019s Commerce Clause. The House narrowly passed the bill last month; the Senate is now reviewing it. Amid broader debates about steep cuts to Medicaid and SNAP, many lawmakers admitted they hadn\u2019t read the entire bill before voting.<\/p>\n
Federal Data Access & Fraud Risk<\/b><\/h3>\n
If passed, the remittance tax would allow the federal government unprecedented access to immigration data. In order to avoid the fee, senders would have to prove U.S. citizenship. That requirement would compel remittance agencies to share their databases with federal immigration authorities \u2014 a move that experts warn could increase fraud and scams targeting both citizens and non-citizens.<\/p>\n
\u201cImplementation of this legislation poses serious national security risks,\u201d said Dr. Manuel Orozco. \u201cIt opens the door to hackers and criminal networks who could exploit personal information to commit identity fraud or create ghost U.S. citizens.\u201d<\/p>\n
Lifelines to Developing Nations<\/b><\/h3>\n
In 2024, global remittances totaled $905 billion, according to the World Bank. Remittances surpass foreign aid and investment in many countries: they make up 26% of Honduras\u2019 GDP, 24% of El Salvador\u2019s, and 41% of Tonga\u2019s. Mexico received $67 billion in remittances from the U.S. last year \u2014 about 4% of its GDP \u2014 while India, the top global recipient, brought in $125 billion.<\/p>\n
\u201cRemittances for decades have been an instrument of development in their own right,\u201d said Ariel Ruiz Soto. \u201cThey fund utility bills, hospital visits, even infrastructure projects like homes, schools, and clinics \u2014 especially in places where governments underinvest.\u201d<\/p>\n
Despite job insecurity during the pandemic, remittances to Latin America increased, reflecting the unwavering commitment many immigrants feel toward supporting their families back home.<\/p>\n
Double Blow to the World\u2019s Poor<\/b><\/h3>\n
Helen Dempster warned the tax would have far-reaching global consequences. \u201cIt deals a double blow to the world\u2019s poorest,\u201d she said, citing recent U.S. aid cuts, including the shuttering of USAID under the Trump administration.<\/p>\n
Dempster\u2019s research projects that a 3.5% tax would trigger a 5.6% decline in total remittance flow. Mexico could lose $2.6 billion annually. Guatemala, where U.S. migrants send home nearly half their salaries, could lose $600 million. Central America as a whole may see $4.65 billion in lost funds. India, the Philippines, and China each stand to lose around half a billion dollars. In Africa, the estimated $488 million loss \u2014 though smaller in dollar terms \u2014 would hit hardest due to the region\u2019s existing aid shortfalls and growing climate-related pressures.<\/p>\n
\u201cNo other country taxes remittances,\u201d said Dempster. \u201cTo do so now, in the wake of aid cuts and rising global instability, is dangerously shortsighted.\u201d<\/p>\n
Logistical Nightmare<\/b><\/h3>\n
To be exempt from the tax, senders must prove both citizenship and taxpayer status using documents like a passport or naturalization certificate \u2014 which most people don\u2019t carry on them. Money transfer companies, banks, and cryptocurrency platforms would have to register with the U.S. Treasury and integrate systems to verify this information.<\/p>\n
\u201cThis tax creates serious implementation hurdles,\u201d said Orozco. \u201cIt\u2019s not just a hassle \u2014 it\u2019s a national security liability.\u201d<\/p>\n
Political Pushback and Economic Repercussions<\/b><\/h3>\n
Latino leaders are mobilizing in response. Ana Valdez noted that her community wields over $4 trillion in purchasing power. Recent polls show that immigrants will continue sending money home \u2014 even if it means cutting back on spending in the U.S.<\/p>\n
\u201cPeople told us, \u2018My mom\u2019s getting her $1,000 a month no matter what,\u2019\u201d said Valdez. \u201cIf that means skipping the movie theater or buying fewer clothes, so be it. But that\u2019s going to slow down the U.S. economy.\u201d<\/p>\n
Valdez also warned that the cost of hiring immigrant workers could rise, as employees seek help transferring money to relatives abroad. In anticipation of the tax, many immigrants have already begun withdrawing large sums of cash from banks, opting to send money home directly \u2014 bypassing formal channels and potentially increasing risks of theft or loss.<\/p>\n
The Latino Donor Collaborative is leveraging social media to raise awareness among lawmakers and the public. \u201cThis tax is a penalty on the American dream,\u201d said Valdez. \u201cBecause immigrants are the American dream.\u201d<\/p>\n
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All images provided by ACoM<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"
Buried deep in the more than 1,000 pages of President Trump\u2019s new \u201cbig, beautiful\u201d spending bill is a provision that has largely escaped public scrutiny: a 3.5% tax on remittances \u2014 the money immigrants send to family members abroad. In a media briefing on June 6, hosted by American Community Media, a panel of experts…<\/p>\n
- Dr. Manuel Orozco<\/b>, Director of the Migration, Remittances, and Development Program at the Inter-American Dialogue, and Senior Fellow at Harvard University\u2019s Center for International Development<\/li>\n