How does the 3.5% remittance tax affect the United States?

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The 3.5 percent tax on remittances sent from the United States, approved by the House of Representatives, is distressing to migrants whose families depend on this money, with more than 40 million people in the United States likely to be affected.

The tax, tied to the controversial federal budget, worries migrants like Honduran María Lorenza Carrasco, who has lived in Florida for 33 years, from where she sends about $1,300 a month to her two daughters and her brother, who is ill with cancer.

The tax would affect more than 40 million people, both undocumented and residents with green cards and other non-immigrant visas, according to a complaint by the Congressional Hispanic Caucus (CHC).

How will the remittance tax impact?
This would impact countries like Mexico, the world’s second-largest recipient of remittances, and Nicaragua, Honduras, and El Salvador, where these revenues represent nearly a quarter of their gross domestic product (GDP), according to the World Bank.

Although the approved tax is 3.5 percent, this would be added to other taxes already applied to remittances, so the total would be higher.

This will primarily affect the states of Chiapas and Guerrero, which are the most dependent on this resource, according to an analysis by BBVA.