Remittance tax: An idea that America should axe

The Trump administration's proposed levy isn't just unfair, it would be a lose-lose for India and the US. Washington should think about how liberal flows of money serve the US economy

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The Donald Trump administration proposes to levy a tax of 5% on outward remittances from the US by non-Americans. This is problematic on several counts. Not only is it regressive from a financial freedom point of view, such a tax smacks of discrimination, as it places one group above others in a matter where the origin of a person should have no role to play.

The tax is part of America's 'One Big Beautiful Bill,' which wants it collected by enablers of overseas transfers and deposited with the US Treasury. This awkward idea hints of a government in a flap over revenues falling shorter than it might have hoped.

America's mop-up from tariffs, for example, may not help all that much to keep its fiscal deficit and debt burden in control, while spending cuts have limits. Has this left Washington in a scramble? While the proposed tax is widely applicable, India in particular should worry about its impact.