Taxing the Poor, Globally

PRESIDENT DONALD TRUMP signed the One Big Beautiful Bill Act (OBBBA) into law on July 4. One measure buried deep in the 870-page law imposes a 1 percent tax on remittances—the money that people send to friends and relatives in their home countries. The 1 percent tax applies to all remittance senders in the United States, though not to transfers sent from bank accounts and U.S.-issued debit or credit cards.

- Fiona Harrigan

The Center for Global Development (CGD), an economic research think tank, suggests that remittances could drop by 1.6 percent “if the new tax raises costs by 1 percent.” Analyzing the potential impact on remittances sent by migrants in the U.S., the CGD finds that Central American countries will “suffer the greatest loss relative to their gross national income (GNI).” El S