US House Republicans have proposed a 5% tax on money transfers sent abroad by non-citizens — including green card and visa holders — reviving a Trump-era idea aimed at deterring undocumented immigration and boosting federal revenue.
Why it matters
Remittances are a lifeline for millions of families in Latin America and beyond. A new tax could slash the funds sent home, affecting entire economies reliant on this cash flow.
Driving the news:
The tax is part of a sweeping 389-page tax reform bill introduced by House Republicans. The lawmakers say the measure would discourage illegal immigration and help pay for other tax cuts.
The proposal follows Donald Trump’s calls to restrict remittances from undocumented immigrants.
By the numbers:
- Immigrants in the U.S. sent over $150 billion abroad in 2022.
- In El Salvador, remittances make up nearly 25% of GDP — meaning a 5% U.S. tax could shrink the economy by 6%.
What they’re saying
- Critics warn the policy could drive money transfers underground, making them harder to trace and regulate.
- Economists say it would disproportionately impact low-income immigrants and hurt economic development in recipient countries.
What’s next
The bill still faces hurdles in the Senate and is unlikely to advance without bipartisan support — but it signals where GOP immigration and economic policy could head if Republicans regain full control of Washington in 2025.
