The U.S. House Budget Committee voted late on May 18th to pass the “Beauty of America Act”, a significant legislative agenda for tax reform championed by President Trump.
This bill proposes a 5% consumption tax on all international remittances from non-U.S. citizens, potentially affecting over forty million individuals. The targets include green card holders and non-immigrant visa holders, such as foreigners with F-1, H-1B, H-2A, and H-2B visas.
This provision does not apply to U.S. citizens, with the tax being withheld by remittance service providers at the time of transfer.
Currently, there are no tax-free thresholds set for remittance taxation. This means even small remittances will be taxed.
Furthermore, this bill targets not only cash remittances but also transfers of investment or stock option earnings.
According to World Bank data, in 2023, the total amount of remittances from the U.S. to other countries was approximately $656 billion, equivalent to Belgium’s GDP. World Bank data indicates that India, Mexico, and China are the largest recipients of remittances.
Indians are among the top three immigrant groups in the U.S., with this bill having a significant impact on Indian nationals working in the U.S. Currently, there are nearly 2.3 million Indians working in the U.S. through various visa programs. The amount of remittances flowing from the U.S. to India in 2024 reached around $129 billion.
Mexico is one of the major recipients of remittances from the U.S., with Mexican President Claudia Shinbaum criticizing this bill and urging Republican lawmakers to reconsider.
According to the plans of House Republican members, they aim to pass the “Beauty of America Act” in the House on May 26th and then submit it for a vote in the Senate, aiming to deliver it to President Trump for signature before July 4th.