A proposed one percent remittance tax on funds sent from the U.S. to foreign countries aims to combat illegal immigration and hinder money laundering activities. Remittances sent by undocumented workers in the U.S. amount to around $93 billion, primarily benefiting countries like Mexico, India, and Guatemala. Currently, Mexico receives tax-free funds, with the U.S. expected to collect significant revenue from the proposed tax. The existing Directo a México program allows for fee-free transfers to banks in Mexico, illustrating the impact of remittances on the Mexican economy, particularly its GDP.
The weapon is a one percent remittance tax on money sent by aliens in the U.S. home to their country. Small change? By the end of 2023, remittances sent by workers in the U.S., many illegal, to other countries reached approximately $93 billion dollars-about 14 percent of total remittances across the globe.
Since 2003, after an agreement was signed by George W. Bush, users of U.S. financial institutions subscribed to Directo a México can send payments to any bank account in Mexico at no cost.
In 2022, Mexico received $56 billion in remittances from the U.S., establishing the country's position as the second-largest destination for such funds worldwide.
Remittances from abroad accounted for roughly 4.5 percent of Mexico's total GDP in 2022 (in some poorer Mexican states remittances comprised 15 percent or more of their GDP).
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