This hidden tax will drain billions from the world’s poorest families
Immigrant rights activist Guerline Jozef can’t count the number of frantic texts, calls, and emails she gets daily from Haitians in the United States terrified that some day soon, they won’t be able to feed their families anymore.
Not just those in the US, but their “mother, sister, niece, a cousin, a church member” back in Haiti, who heavily depend on their breadwinner abroad to survive.
“Entire neighborhoods are being provided for by the diaspora,” said Jozef, co-founder of the Haitian Bridge Alliance in San Diego. “Haiti is literally being held together by those of us who are outside of the country and sending money back home.”
Haiti’s decades-long humanitarian crisis deepens each day, forcing immigrants to send record-high payments back home in recent years. Each Haitian immigrant living abroad supports a dozen or so friends, family, or community members in their home country, many of whom rely on those payments to survive, Jozef says.
But that money — formally called remittances — is about to get more expensive to send, thanks to a new tax tucked into President Donald Trump’s new spending bill. The 1 percent tax passed as part of the One Big Beautiful Bill enacted by Congress last month and will go into effect starting January 1, 2026.
Though 1 percent might not sound like much, it could mean billions of dollars that never reach grandparents who need medical care, homes that fall into disrepair, and girls unable to stay in school.
About 200 million immigrant workers support about 800 million family members in their home countries each year — together, that’s roughly one in eight people worldwide. For every dollar that a wealthy nation sends in foreign aid, immigrants send almost four times as much back home, totaling over $700 billion worldwide — enough to buy up every home for sale in the US and still have billions to spare. In over 60 countries, remittances make up more than 3 percent of GDP, and in some places, they make up well over a quarter of the entire economy, the equivalent share of the entire manufacturing, retail, and health care industries in the United States combined.
When the tax goes into effect next year, Haitians could lose about $61 million annually in direct payments for food, shelter, and health care, according to the Center for Global Development. Globally, the losses will add up to about $4.5 billion.
This economic pain is on top of the absolute gutting of USAID, which around the world, once paid for almost half of all food aid, roughly 70 percent of the global response to HIV/AIDS, and contraceptive care for almost 50 million women and couples each year. The agency’s sudden demise has left a multibillion-dollar vacuum for peace building, humanitarian relief, and health infrastructure in dozens of low- and middle-income countries where those funds made a tremendous difference.
But as big of a deal as USAID was, remittances are actually an even bigger deal. And the US is targeting immigrants’ hard-earned cash at a moment when the world can afford it least. Many countries — like India, Guatemala, and the Philippines — will lose way more money from this 1 percent tax on remittances than they will from foreign aid cuts. Losing yet another lifeline will be beyond catastrophic — it could further destabilize countries already steeped in crisis.
If remittances fall, “it will mean more famine,” Jozef said. “It will mean more people dying.”
A vast global safety net hidden in plain sight
Immigrants in the US sent almost $100 billion overseas last year, mostly to low- or middle-income countries, making it the © Vox
