House Republicans want to tax remittances, which would cover over 40 million people in the U.S., including green card and visa holders who send money to families.
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Funds from migrants sent back home help fuel some towns’ economies. A GOP plan targets that
House Republicans want to tax remittances, which would cover over 40 million people in the U.S., including green card and visa holders who send money to families.
Exchange rate information displayed outside a currency exchange office in Mexico City in February.Mayolo Lopez / Bloomberg via Getty Images
WASHINGTON — Israel Vail’s entire life in the small western Guatemalan town of Cajolá is built off the money that his three children send home from the United States.
The money from their construction jobs paid for the two-story white home where Vail now lives — and where his children, who are in the U.S. illegally, would also reside if they ever get deported. Vail, 53, invested some of the money in opening a local food shop, which he uses to keep his family afloat.
In small migratory towns like Cajolá, it is not unusual for the entire economy to be built off remittances, the funds sent by migrant workers back to their home countries.
“People here, they don’t live luxuriously, but they live off remittances,” Vail said.
House Republicans have included in President Donald Trump’s big priority bill a 5% excise tax on remittance transfers that would cover more than 40 million people, including green card holders and nonimmigrant visa holders, such as people on H-1B, H-2A and H-2B visas. U.S. citizens would be exempt.
Trump also recently announced that he is finalizing a presidential memorandum to “shut down remittances” sent by people in the U.S. illegally. White House and Treasury officials have not responded to requests for comment from The Associated Press on specifics of the presidential memorandum that Trump previewed in an April 25 Truth Social post and how it would work.
Mexican President Claudia Sheinbaum shot back on the measure and called on Republican lawmakers to reconsider it, saying it “would damage the economy of both nations and is also contrary to the spirit of economic freedom that the U.S. government claims to defend.”
“Remittances are the fruit of the efforts of those who, through their honest work, strengthen not only the Mexican economy but also the United States’, which is why we consider this measure to be arbitrary and unjust,” she said in a morning press briefing.
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