The GOP’s massive spending bill minimized popular new taxes on the millions of migrants who send billions of dollars from their U.S. paychecks back to their home countries.
The reversal is an “absolute betrayal,” said U.S. Tech Workers, which represents the American professionals who lose wages and jobs to India’s workforce in the United States. The group added:
Senate Republicans are watering down the remittance tax from 3.5% to just 1%. House GOP BBB passed 5%, but the Senate caves — again! So, H-1Bs replace American workers, then get rewarded [with tax breaks] for wiring U.S. wages to countries profiting off our offshored jobs.
The proposed one percent tax also excludes remittances made via the normal route of bank transfers.
Still, the bill included many gains for pro-American immigration policy, including more than $150 billion for border security. Any compromise deal includes losses amid the gains — and each deal shapes the next debate and compromise. For example, the border security provisions in this deal will help shift the national political focus to the economic impact of white-collar migration on ordinary Americans.
Capitol Hill sources say the remittances tax was dropped by the non-partisan parliamentarian who controlled what could be included in the fast-track reconciliation spending bill.
But that blame-the-parliamentarian claim is often used to hide the decisive role of the Republican leadership, which was targeted by political leaders in both Mexico and India.
Mexico has a huge incentive to oppose a remittance tax — and it has the power to make closed-door deals with the U.S. government. In May, President Claudia Sheinbaum called on Mexicans to oppose the draft tax on migrants’ remittances to Mexico.
Moreover, Trump’s crackdown on illegal migration is already throttling the flow of remittances back to the Mexican economy. Compared to April of 2024, per the Bank of Mexico, remittances in April 2025 dropped 12.1 percent, which is the biggest year-over-year drop in 13 years.
India is also reliant on the $32 billion in remittances sent home by its massive workforce that occupies more than one million white-collar and blue-collar jobs in the United States. That huge workforce is used by the Fortune 500 to minimize payroll costs for subcontractors.
Both foreign governments have much sway in Congress, partly because they can harass U.S. trade with their countries. Moreover, Trump’s deputies are trying to craft a trade deal with India, even as Indian officials push to reduce the Social Security taxes paid by Indian workers in the United States.
The Senate’s decision to cut the remittance tax “makes no sense!” tweeted Rohit Joy, at the Collin County Young Republicans. “The higher the remittance tax, the more favorable the budget scoring that makes it easier to include more and larger tax cuts for Americans!”
In early June, Sen. Eric Schmitt (R-MO) called for a 15 percent tax on remittances.
“The House’s Big Beautiful Bill addressed the urgent need for a remittance tax. But we can go further. I’m introducing legislation to quadruple the proposed remittance tax — from 3.5% to 15%. America is not the world’s piggy bank. And we don’t take kindly to threats,” Schmitt said in a statement on X.
“As I’ve said many times before: America isn’t an economic zone. It isn’t an airport with a shopping mall attached. It’s our country. It’s our people. It’s our home,” he added.
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