Prof. Paul Vaaler Quoted by NPR About Federal Budget Bill Imposing a Tax on Remittance Transfers

Professor Paul Vaaler, John and Bruce Mooty Chair in Law and Business, was quoted by NPR’s Marketplace about the federal budget bill and how it imposes a 5% tax on remittance transfers. Remittance transfers are electronic transfers of money sent by people in the U.S. — often immigrants — to others abroad. There are some exceptions to the tax, including most transfers made by U.S. citizens. In 2023, people in the U.S. sent a total of $93 billion in remittances to people in countries around the world. Prof. Vaaler said that the money goes to help friends and family pay for basic needs like food and clothing, and also funds entrepreneurial ventures. He said, “They may use it to buy a pickup truck, and that pickup truck helps run the farm during the day, but then it becomes a taxi at night.” He added that a remittance tax is also not likely to get an enthusiastic response from institutions that are part of the legitimate market and that if the tax goes through, banks and money transfer companies could see fewer transfers — and fewer transaction fees.