The Legal and Financial Backlash
Legal experts and financial watchdogs are raising red flags. Alan Cole and Patrick Dunn of the nonpartisan Tax Foundation warn, “The tax is likely to create collateral damage by imposing compliance burdens on people who are not the intended target…while struggling to collect revenue from the intended targets.” (Tax Foundation, June 2025)
A coalition of major U.S. financial services groups issued a rare joint statement opposing the remittance tax, citing privacy and regulatory overreach. “This remittance tax provision in particular mandates a massive invasion of privacy by private businesses and the federal government on American citizens, creates undue tax burden for law-abiding Americans, reduces business revenue, complicates regulatory efforts, and hinders law enforcement,” wrote the leaders of seven industry groups.
Banks and money-transfer operators—often the only bridge between working-class Americans and their relatives abroad—could see compliance costs skyrocket, potentially passing those expenses down the line to customers.
