Remittances Under Threat.

This Wednesday, the United States House Ways and Means Committee approved an initiative that has raised alarms both at home and abroad. With 26 Republican votes in favor and 19 Democrats against, the proposal to impose a 5% tax on remittances sent by migrant workers was approved. Although it still needs to pass through the full legislative session, the political message is clear: migrants who, through their work, have kept entire communities afloat in Latin America and other regions of the world, are being criminalized and punished.

What are remittances and why are they vital for Mexico?

Remittances are money transfers that migrants send to their families in their countries of origin. For Mexico, they represent an essential source of income. In 2024, according to data from the Bank of Mexico, remittances are expected to exceed $64 billion, consolidating their position as the country's largest source of foreign currency, surpassing tourism, oil exports, and even foreign direct investment.

These remittances reach vulnerable households directly and act as an economic lifeline. They are used for food, education, healthcare, housing, and local businesses. In states such as Michoacán, Guanajuato, Jalisco, and Oaxaca, many rural communities depend almost exclusively on these resources.

An unfair and discriminatory tax

Had the 5% tax been applied in 2024, Mexican migrants would have lost approximately $3.237 billion in direct taxes. This is an enormous amount, impacting not only the sender of the money, but also the recipient and the entire Mexican economy, by reducing purchasing power in areas that depend on this income.

The measure, pushed by Republican legislators with strong anti-immigrant stances, represents a double penalty. On the one hand, immigrants already pay taxes in the U.S., many of them without access to social benefits such as healthcare, public education, or retirement. On the other hand, they now intend to tax money that has not only been earned but is also intended for charitable and family purposes. It is, literally, a double tax.

Violation of international treaties and principles

Various human rights organizations and international relations experts have warned that this measure would violate international treaties such as the G20 Remittance Facilitation Agreement, to which the United States is a party, as well as fundamental principles of international law that guarantee the free movement of legal and private resources.

Furthermore, the USMCA trade agreement between the United States, Mexico, and Canada could be considered a barrier to capital transfers, which would generate diplomatic tensions and open the door to lawsuits.

The US Fiscal Crisis and the Geopolitical Shift

This proposal also reveals the dire fiscal situation facing the United States. The budget deficit has soared in recent years, and public debt exceeds $34 trillion. Far from seeking structural solutions, some political sectors are opting for regressive tax mechanisms that place the burden on those with the least.

Meanwhile, figures like Donald Trump—still influential in the Republican Party—have begun tours of the Middle East seeking economic agreements and financial support. The fact that the United States, historically the dominant power, has to "borrow" from regions where it previously imposed its will is a clear symptom of the change in the world order.

And the real evaders?

While migrant workers are punished, the US tax system continues to allow large corporations and the ultra-rich to avoid taxes through tax havens, loopholes, and aggressive accounting strategies. According to the Institute on Taxation and Economic Policy, in 2023 at least 55 large Fortune 500 companies did not pay a single dollar in federal taxes, despite generating billions in profits.

This contrast shows the hypocrisy of a measure like the 5% tax on remittances: it is not about solving a fiscal crisis, but rather reinforcing an anti-immigrant narrative while protecting the truly privileged members of the system.

Mexico must react.

The Mexican government, through the Ministry of Foreign Affairs and the Bank of Mexico, must speak out firmly. It's not just about protecting the income of Mexican families, but also about defending the principle that migrants are not criminals or tax evaders: they are workers who have supported their communities from abroad, often after being forced to leave the country due to a lack of opportunities.

Furthermore, this situation should prompt deeper reflection: how much more can Mexico depend on remittances? It is urgent to strengthen internal development, generate decent jobs, and guarantee economic rights so that migration is not the only option for millions of Mexicans.

Taxing remittances is an unfair, discriminatory, and counterproductive measure. It affects those who contribute the most and receive the least, and deepens global inequality. Mexico cannot remain silent in the face of this attempt to plunder its working diaspora. It is time to recognize that migrants do not just send money: they sustain lives, maintain communities, and represent the best of human endeavor in adverse conditions.