Trump’s “Big, Beautiful” Bill Sparks Remittance Tax Tensions Between US and Mexico
Washington/Mexico City A controversial proposal from former President Donald Trump, involving a 3.5% tax on remittances sent abroad by immigrants, is causing serious political tensions between the US and Mexico. The new Mexican President Claudia Sheinbaum’s administration has been quick to respond, saying that this policy is not only unreasonable but also unfair to millions of Mexicans working legally in the US.
Remittance Tax A “Blow” on Immigrant Communities
The new bill, once called “big and beautiful” by Trump, previously proposed a 5% tax, but was adjusted down to 3.5% in a recent amendment. However, if passed, this policy would directly affect tens of billions of dollars in remittances sent from the US to countries like Mexico, an important source of income for millions of families.
President Claudia Sheinbaum took a tough stance: “We will not let the remittances of Mexicans be stifled by unreasonable policies. Mexicans work hard, pay taxes and have the right to support their families.”
The Mexican government has launched a campaign calling on the Mexican diaspora to write letters and send emails to US Senators to protest the bill.
Finabien a “tax avoidance” solution implemented by Mexico
In addition to the diplomatic protest, Sheinbaum revealed that Mexico is implementing “Finabien”, an initiative to provide low-cost international money transfer services, as a long-term solution against the impact of any tax imposed by the US.
“We are building a sovereign financial solution for the Mexican diaspora,” she emphasized.
US Congress Divided, Shocking 15% Tax Hike Proposed
While the Mexican government seeks to protect overseas workers, right-wing politicians in the US continue to push for a hardline stance. Missouri Senator Eric Schmitt has announced that he will propose raising the tax rate from 3.5% to 15%.
“We are not the piggy bank of the world. The US is not the financial center for everyone. I will introduce legislation to quadruple the current tax rate,” Schmitt wrote on social media on Sunday.
Cryptocurrency emerges as a potential escape
With the growing risk of remittance taxes, experts say cryptocurrencies could be an effective alternative for immigrants who want to send money home discreetly and cheaply.
“Cryptocurrency transactions from uncustodial wallets are difficult to monitor and tax, which could change the entire remittance picture,” one analyst commented. “As traditional policies tighten, people will turn to technology to protect their personal finances.”
A risky political future
The current policy stalemate has not only heated up bilateral relations between the two neighbors, but also has the potential to have a ripple effect on immigrant communities across the United States. With the 2024 US election looming, such proposals could become controversial political tools and even shape voter sentiment in states with large Latino populations.