House Republicans Plan 5% Tax on Immigrant Remittances

House Republicans have proposed legislation to impose a five percent tax on remittances sent by illegal immigrants from the United States to foreign countries, aiming to generate revenue and dissuade illegal immigration. This tax would exempt verified U.S. citizens and provide refundable tax credits to those with valid Social Security numbers. The proposal has sparked concern among experts and communities in countries like Guatemala and Nicaragua, where remittances form a significant part of the local economy and GDP, with some nations relying on these funds for economic stability. Critics warn that taxing remittances could harm these economies and potentially increase migration as families seek alternative income sources. Supporters argue that the tax would help recoup revenue lost due to untaxed earnings by illegal immigrants and reduce money flowing to criminal networks, including drug cartels. The measure is part of President Donald Trump's broader tax bill and immigration enforcement agenda, reflecting ongoing debates about the economic and social impacts of remittance flows from the U.S.