US Senate Leaves Remittance Tax at 1%; Musk Lash Out

Despite threats from Republican lawmakers, Senate leadership decided to reduce the remittance tax, which particularly affects migrants from Mexico and India in the US, to just 1 percent amid a marathon debate on amendments to the massive, “big and beautiful” fiscal package they hope to complete early today.

The 944-page bill underwent extensive modifications to accommodate the demands of a group of moderate Republicans who contested the magnitude of the Medicaid cuts. The result was that the Senate bill will increase the federal deficit by $1 trillion more than the House version.

It also increased the budget for deportations and the completion of the wall on the border with Mexico to nearly $170 billion, $20 billion more than the House bill, despite Republican senators like Ron Johnson opposing the $44 billion allocation for the wall alone.

In closed-door negotiations, Republican leadership ignored calls from some members of the caucus to raise the tax and decided to lower it from the 3.5 percent in the House version to just 1 percent starting in 2026. It also determined that it would not apply to transfers made from bank accounts, but would apply to all non-citizens.

To make permanent the 2017 tax cut, which Democrats say disproportionately benefits low-income people, the bill tightens eligibility criteria for Medicaid, the healthcare program for lower-income Americans.