The remittance tax, passed in 2025, was part of the broader Big Beautiful Bill and was closely tied to the president’s migration‑restriction agenda. Its passage prompted several state legislatures to propose their own remittance taxes and led the Department of Homeland Security to argue that the measure would restrict remitting behavior. Initially proposed as a 5 percent tax on all foreign‑born individuals, the policy evolved into a 3.5 percent tax on anyone sending cash to their country of origin, and ultimately a 1 percent tax applied to cash‑based transactions. Implemented on January 1, 2026, the tax is projected to generate approximately US$1.5 billion in revenue. However, it may also raise remittance costs, potentially reducing the amounts sent, increasing the use of informal transfer channels, or both—effects that could have broader consequences, including increased migration pressures. These concerns motivate key questions, namely how the tax effects remittance decisions, who is most affected, how much of the tax burden falls on remittance senders, and how migrants are likely to respond.
To answer these questions, the Migration and Remittances Program of the Inter-American Dialogue administered a survey to 200 migrants in the Washington, DC area who were sending cash remittances. The results of this survey are presented in the presentation below.
