
Republican lawmakers are pushing to increase a proposed tax on migrant remittances from 3.5% to 15% after Mexico threatened to retaliate against the initial proposal.
At a Glance
- Sen. Eric Schmitt (R-MO) is leading efforts to quadruple the proposed remittance tax from 3.5% to 15%
- Mexican President Claudia Sheinbaum threatened to “mobilize” against any remittance taxation
- The tax could generate approximately $26 billion in revenue over the next decade
- Mexico received about $64.7 billion in remittances last year, making it the second-largest recipient globally
- GOP lawmakers argue the tax would help fund border security while ensuring America isn’t treated as “the world’s piggy bank”
GOP Pushes Back Against Mexican Threat With Higher Tax Proposal
Republican lawmakers are escalating their push for a remittance tax after Mexican President Claudia Sheinbaum criticized the initial proposal. The original plan, included in the One Big Beautiful Bill Act, called for a 3.5% tax on money transfers sent by noncitizens in the United States to their home countries. After Sheinbaum suggested Mexico might mobilize against such a tax, several GOP senators responded by proposing an even steeper rate.
“If necessary, we’ll mobilize. We don’t want taxes on remittances from our fellow countrymen. From the US to Mexico,” said Claudia Sheinbaum.
Senator Eric Schmitt of Missouri took the lead in responding to the Mexican president’s comments, introducing legislation that would increase the tax to 15% – more than four times the rate in the House bill. The tax is projected to generate approximately $26 billion over the next decade, funds that Republican lawmakers suggest could be directed toward border security and enforcement.
America “Not the World’s Piggy Bank”
Schmitt framed his proposal as a matter of American sovereignty and economic self-interest. His legislative push comes as part of a broader Republican effort to address what they see as financial outflows that benefit other nations at the expense of American interests. The initial House bill, known as the “Big Beautiful Bill,” proposed a 5% tax specifically on remittances sent by illegal immigrants.
“America is not the world’s piggy bank. And we don’t take kindly to threats,” said Sen. Eric Schmitt.
The legislation includes provisions to soften the impact on American citizens, with a refundable tax credit for taxpayers who have valid Social Security numbers and pay excise taxes. This structure aims to target the tax primarily at noncitizens sending money abroad while protecting Americans who might be affected. Senator Mike Lee of Utah has also voiced support for increasing the tax rate, suggesting it could potentially rise even higher than Schmitt’s 15% proposal.
Economic Impact on Receiving Countries
Remittances represent a significant economic lifeline for many developing nations. Mexico stands as the second-largest recipient of such transfers globally, having received approximately $64.7 billion last year according to available data. Recent immigration enforcement actions have already led to a decrease in these transfers, raising concerns in countries heavily dependent on this income source.
“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,” said Sen. Eric Schmitt.
The impact would extend beyond Mexico. In Nicaragua, for example, remittances totaled $373.5 million in January 2025 alone, accounting for approximately 27% of that nation’s GDP in 2024. The proposed tax comes alongside other economic measures aimed at Mexico, including Trump’s recent implementation of 25% tariffs on imports not covered by the US-Mexico-Canada Agreement, citing concerns over illegal immigration and fentanyl trafficking.
Border Security Funding
Representative Chip Roy of Texas has advocated using revenue from the remittance tax to fund enhanced border security measures. This aligns with broader Republican priorities to address what they characterize as a crisis at the southern border. The tax proposal represents one component of a multi-faceted approach to immigration policy and border enforcement being pursued by GOP lawmakers.
“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%,” said Sen. Eric Schmitt (R-Mo.).
With Mexico serving as the United States’ largest trading partner according to the U.S. Census Bureau, the economic relationship between the two nations remains complex and multifaceted. The proposed remittance tax represents a significant potential shift in this relationship, potentially affecting millions of people on both sides of the border and reshaping aspects of the economic ties between the United States and various recipient countries.