Tax Remittances? Every year, remittances sent from the United States to Mexico reach significant figures, with an estimated 66 billion dollars expected by 2024.
Remittances have increased significantly since 2000, due to the integration of Mexicans into essential activities in the U.S., such as agriculture and manufacturing. In 2023, remittances totaled 63.319 billion dollars. This figure exceeds other sources of income, such as oil exports and tourism. However, a decrease in Mexican emigration is observed, influenced by factors such as discrimination and the policies of the Trump administration, which could affect the peso-dollar exchange rate.
And now, remittances are becoming a weapon of Trumpism.
In addition to mass deportations and tariffs on the United States’ main trading partners, Trumpism now proposes a new tax that will especially affect migrant communities. Donald Trump’s supporters are suggesting that the new administration impose taxes on money transfers sent abroad. The proposal is not new; the president-elect considered it during his first term. The idea has regained popularity among Republican legislators as a border security measure, but experts question its effectiveness.
Chuck DeVore, a former California assemblyman who is part of a conservative think tank based in Texas, has been the latest voice calling for a tax on remittances leaving the United States. “A 50% tax on these transfers abroad could generate more than $23 billion, a small fraction of the $151 billion used in social services that benefit illegal immigrants,” DeVore told Fox News this week.
The former Republican legislator says the government invests about $9,000 per undocumented person in education, health, and public safety services, so the tax on remittances would be a way to recover part of that public money. “All that social spending funded by American taxes is another form of foreign aid,” DeVore believes. The analyst urges Republican senators to adopt the initiative in January, when the legislative discussion of a defense and border security package will begin.
Most Mexicans send remittances through electronic applications, with 99% of the shipments made this way.
Through money transfers, more than 4.9 million households in Mexico receive an annual average of $13,000, which is equivalent to $1,080 per month per family.
Dr. Daniela Castro explains that Mexican emigration to the United States decreases year after year. Discrimination, deportations, and the border wall contribute to this. With the new Trump administration, these pressures will likely increase, which already affects the peso-dollar exchange rate.
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