Impact of Proposed Tax on Remittance Transfers

SOURCE www.nbcnews.com
House Republicans have proposed a 5% excise tax on remittance transfers that would affect over 40 million people, including green card holders and visa holders. The tax aims to target those sending money from the US illegally, but experts warn that it could harm communities, burden American citizens, and lead to more illegal migration. Remittances are crucial for many poorer towns and banning or taxing them could have negative consequences.

Key Points

  • Remittances are vital for many poorer towns and banning or taxing them could have negative consequences.
  • Tax on remittance transfers proposed by House Republicans could affect over 40 million people, including green card holders and visa holders.
  • Mexican President criticized the tax measure, stating it would damage the economy of both nations.
  • Experts warn that reducing remittances could negatively impact the US national interest and could lead to more illegal migration.
  • Legislation to control remittances has been proposed in multiple states, with Oklahoma being the exception that passed a tax on remittances in 2009.

Pros

  • Tax on remittance transfers could act as a revenue generator for the US government.
  • Limiting or taxing remittances may deter illegal immigrants from coming to the US.

Cons

  • Taxing remittances could harm communities that rely on them for economic support.
  • It might burden American citizens and firms who use remittance services.
  • Proposed tax could lead to an increase in illegal migration.