Senate must reject the unjust remittance tax on immigrants

This provision, if passed by the Senate, would take effect on January 1, 2026, and disproportionately harm the very individuals who already contribute significantly to the U.S. economy.

Let’s be clear: this is a form of double taxation. Immigrants are already taxed on their income, just like any other American worker. Remittances — money sent to help family members abroad — are typically drawn from post-tax income.

Add in existing remittance service fees, and the proposed tax becomes a heavy-handed and unnecessary penalty. It would push many households into further financial strain, especially those who send money regularly to support aging parents, medical bills, or educational costs overseas.

Supporters argue the tax could raise billions in federal revenue — the Treasury projects $22 billion by 2034. But at what cost? Remittances are not luxury expenses; they are lifelines. A recent survey found that 14% of U.S. households use international remittance services, highlighting just how deeply ingrained these transfers are in everyday life, especially among immigrant families.

Burdening these families with additional costs not only threatens their stability but also the fragile economies in countries that rely on these funds.
The Financial Technology Association rightly criticized the tax as regressive and “unjustified from a policy standpoint.”

In practical terms, it may also drive people away from legal remittance channels and toward unregulated informal networks or cryptocurrencies, both of which carry risks of financial fraud and weaken the government’s ability to monitor cross-border money flows.

Small businesses will also be collateral damage. In cities like Los Angeles, where corner stores and neighborhood service shops often serve as vital remittance hubs, store owners are bracing for customer losses. These businesses are already operating on slim margins. A drop in remittance volume could push many to cut hours, reduce staffing, or shut down altogether.

For immigrants like Hyunseok Kim, a green card holder in LA, the tax feels like a targeted attack. “It feels like another form of discrimination against lawful residents who already pay taxes,” he said.

Jongwon Lee, an attorney with the minority advocacy nonprofit American Community Media(ACoM), echoed those concerns, warning the policy could ripple far beyond immigrant families, potentially depressing U.S. consumer spending at large.

The Senate now holds the responsibility to reconsider this harmful provision. Policymakers must weigh the real-world consequences of taxing financial support between family members. There is a difference between closing loopholes and penalizing lawful, tax-paying residents for helping loved ones abroad. Lawmakers should reject this proposal, not just on economic grounds, but on moral ones as well.

By Mooyoung Lee [lee.mooyoung@koreadaily.com]