It costs a lot of money to not have a lot of money.
In fact, I’d say one of the ways that the rich stay rich is by charging everyone else as much as they possibly can while paying as little as they can. One way this can happen is through interest on credit, often needed these days even for the bare essentials. It also happens through late fees, payday loans and cash checking centers. In the United States, even the cap on social security taxes allows the rich to simply stop paying it after their income reaches a certain point. Plenty of other US tax policies allow wealth to stay concentrated, too.
Take me. Now, I don’t consider myself poor — not in Mexico, anyway. But around this time last year, I lost my “main” job. Odd jobs — and writing for this publication — kept me afloat somewhat with the essentials that had to be paid in cash. But for everything else, I used my credit cards. Luckily, I have US cards and pretty good credit, so especially compared to Mexico, interest rates I paid and still pay were and are fairly low.
Still, it’s been rough, and I’m in a hole that’s going to take me a while to dig myself out of. My cards are getting dangerously close to being maxed out. And though I make at least the minimum payments faithfully every month and have never missed a payment, my previously “excellent” credit is now simply “average.”
Add to that “processing fees” from services like Paypal and Stripe — employers often determine how one can get paid — and you’ve got a smaller chunk of change already, even before paying self-employment taxes. Nickled and dimed, indeed.
Luckily, I have what I think and hope will be a steady job for the foreseeable future, with better pay that I’m used to. Even so, it’s going to take sucking in my gut for the rest of the year to get out from under this mountain of debt, and a not-insignificant portion of my payments now are simply interest charges.
All this is to say that I know from very personal experience what a difference a five percent tax on remittances, like the kind proposed by the Trump administration in the U.S., could make on working people just trying to send money home. With prices ever-increasing and all our economic futures uncertain, every dollar or peso truly does count.
This is a situation that many people find themselves in all over the world. Salaries and wages have not kept up with inflation or the cost of living on either side of the border. Mexico is at least working on raising the minimum wage. But in the States, there are, sadly, many accounts of people working full-time jobs and living in their cars or in shelters. It’s just really hard to keep up for lots and lots of people.
Many of those hard-working people up north are immigrants. Many keep for themselves the bare minimum for survival, preferring to send the rest to family back home. Relatives back home, meanwhile, count on that money to get by; often, entire families do. And though not all workers have legal status, they do pay US taxes.
The proposed tax on remittances is deeply unfair, but it is also deeply unsurprising. After all, the overall policy of the new presidential administration seems to be a sort of reverse Robin Hood: take from the poor to give to the rich. As they work at figuring out how to pay for a gigantic tax break for the wealthy, they’re cutting off money for everyone else wherever they can. Essential social services are dwindling, even when they weren’t all that strong to begin with. Even people who thought they were safe are feeling this wealth transfer.
Programs that provided not only services but jobs are disappearing, no matter what contracts say. Major services are being decimated, stable jobs replaced with an overworked few, plus AI. My father is terrified he’ll stop getting his social security. Hopefully that won’t happen. But if a problem arises, who will be staffing the offices that might be able to help him?
Cutting services isn’t the only way the Trump administration is looking to pay for this tax cut, though. The world has been watching in horror as he’s levied nonsensical tariffs on allies and enemies alike, ignoring all previous agreements.
There’s a new Baby Godzilla in town, and the tantrum is in full swing.
We know that Trump considers tariffs a “great deal” for the U.S. But even more money is needed to fund that tax cut, and we are definitely not asking Jeff Bezos or Elon Musk to pay it.
So who can we charge beyond all the people we’re already charging? One of the political right’s favorite boogeymen, of course: the immigrant.
Because it’s not enough that they’re already living in even more precarious situations than citizen workers are, especially with ICE now running around like the Gestapo. They need to be punished for having dared to enter the country in the first place. This goes for legal immigrants, too. “Everything you get to do here is a privilege, not a right,” the message seems to be.
In a perfect world, remittances would not be necessary. Everyone would be able to make the amount of money they need for them and their families to survive and thrive wherever they wished to live.
But that is not our world, and many families’ survival depend on that money sent back home. Let’s at least not pile on the cruelty.
Sarah DeVries is a writer and translator based in Xalapa, Veracruz. She can be reached through her website, sarahedevries.substack.com.
Without agreeing with one side or the other on the proposed fee, I think one point that has been lost in this conversation is that there are many non citizens that receive their pay in cash, thus avoiding paying any tax. We need to be honest, accept, and acknowledge that there is a huge “gray” area around this topic. I know from experience that our farming business, and that of many, many others, pay their labor in cash. I also have friends in the construction trades and know owners of custom building companies. As long as there is 1 licensed foreman on a crew, everyone under him/her, works under their license with very little documentation. Many of these subcontractors get paid directly and pay all their laborers in cash as well. I have been on many build sites where there’s only 1 English speaking foreman and 6 – 10 crews all working for cash. The same issue is true in meat processing and manufacturing. With automated HR systems, they are unable to hire anyone without a social security number. The employees who do not use fabricated documents are paid in cash as well. Regardless of the remittance fee and how I feel about it, the thing that everyone is ASSUMING is that these workers are all above board and receiving payroll checks. The FACT is that there is a major percentage of these employees are working for cash. If all of these workers were hired by legitimate means, they would have identification numbers attached to their being, and the government could very easily track them down and deport them at will. If you follow criminal reporting, and search non insured drivers involved in traffic violations including accidents, there are very large numbers of Mexican drivers who cannot get insurance because the requirements are the same for working legitimately, you need to supply social security numbers – the reason they don’t carry insurance, is the same reason they don’t collect payroll checks. Most large US employers now require direct deposit. This ensures non legal workers cannot be employed, since to have a bank account, you need a social security number.
Yes, there are many honest people working and paying taxes who this fee will have a very negative effect on. However, there are millions of people working and not paying any taxes at all. Yes, these employers are just as guilty and should be penalized. Yes, they take advantage of the hard working people and abuse them because of their legal status. All conversations that should be had. But can we quit pretending that everyone is honest and paying taxes in the first place. As was mentioned previously, buy here-pay here, check cashing, cash only, no contract cell service, etc. are all a thing, because someone who is able to is taking advantage of someone in need of their service. These are typically businesses that aren’t frequented by consumers who are living legitimately.
In my opinion, the US should’ve had an amnesty period. A time where people in the Country “non-traditionally” could come forward and register, start the citizenship process, and have an opportunity to do right. Then, those who chose not to, should be pursued with every bit of the law enforcement, legal system, and been removed. After all, if you force people to live in the dark/shadows, they will do dark/shadowy things. Anyone in the US that came forward and wanted to create a better life and contribute to society should have had that opportunity. Anyone else, the government could seek out and punish accordingly. 🤙✌️❤️
true
You miss the point of the deportations, I’m afraid. The administration is aware of the value that poor and eve illegal immigrants provide to businesses and the economy, to construction, agriculture, and the service industry. The point of the deportations is to radically reduce the number of black and brown people who threaten to become a majority in the US. It is racism pure and simple. Make America White Again.
Apologies to those who think differently but in my humble opinion the US president is a total asshole.
Do you realize that you are also calling 77 plus million US Voters assholes.
That would be right!
even if she is not, I am… cause they are assholes
Cry me a river
I don’t know why American politicians never understood that weakening or not supporting the Mexican economy is a recipe to create, sooner or later, demographic pressure at the border. How much is spent by Washington to finance Egypt, for example, instead of investing in its own backyard : Mexico and Central America.
The new 0.5% remittances are a new way of “keeping more Mexican back in Mexico. Otherwise, you are going to “lose’ some of your paycheck. You don’t want to remain here and keep paying that 3.5% tax on your money sent back home. Seek a better life in Mexico for yourself and your kids, All Mexican living in the US have been “spoiled” to the core all these past 75 yrs. and now they are “crying. Don’t dry, just pack your bags and go back home and keep all your money. Your president welcomes you “back” with “open arms” and lots of “hugs and kisses. Adios amigo”
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Norse, your answer is alot of an opinion. There seems to be little factual information. Double taxation is a real item of concern. Regardless of how you are paid on the job. The premise from the administration is anyone sending money to México is needing to pay remittance tax. With that in mind, Western Union, Paypal, Wise etc. will need to raise their costs of doing business to everyone to be able to monitor the sender. It is like a tariff, no one wins. My opinion is, the USA is the most powerful and richess country on the planet and the cry of being the victim is really pathetic and in this case evil!
Well said
I believe it’s remittences to every country not just Mexico, so not sure if there is a Chinese or say Indian government response to monies sent to those countries?