The Remittance Tax Proposal Is Both Complex and Dangerous

The administration’s attempt to increase tax revenue while disincentivizing illegal immigration comes in the form of a refundable remittance tax. The proposal, included in the reconciliation bill, would introduce a 3.5 percent excise tax on remittance transfers overseas, but would include a carveout excluding U.S. citizens or nationals from paying said tax. This exception would entitle the sender to a refundable tax credit unless a “qualified” remittance transfer provider is able to verify users’ citizenship status, which would exempt the transaction from any tax altogether. Such a proposal would do little more than complicate the tax filing process, introduce new privacy security risks, and burden transfer platforms with legal liability and compliance costs.

By introducing a U.S. citizen carveout, the proposal would further complicate the tax preparation and filing process for U.S citizens. They would have yet another tax credit to calculate when filing their taxes. Further complications in the tax filing process increase the cost of tax preparation services and increases the risks of audits for taxpayers. Additionally, the refund coming in the form of a tax credit means that the government is getting a zero percent interest loan from citizens from the time the tax is collected to when their refund is processed. Additionally, the bill would require platforms to undertake the citizenship verification process for those who claim to be citizens. They would then submit users’ personal information for verification to the Internal Revenue Service (IRS). Forcing platforms to submit sensitive personal documents exposes taxpayers to data breaches and cyberattacks, undermining their safety and privacy. This is especially true, given the IRS’s poor data
security record.

For any of the platforms processing these transfers, compliance costs will rise significantly. Platforms would need to hire extra staff to process user data in order to satisfy the reporting requirements. They would also need to make significant investments into added cybersecurity infrastructure. Any data breaches will have significant reputational repercussions. While these investments can be worthwhile for companies who operate exclusively in the money transfer spaces, companies that had it as a secondary or ancillary services (such as grocers, pharmacies, and other small businesses) might decide to stop providing this service altogether. That means that Americans will see their offerings reduced. They will also face fee increases, as companies will necessarily pass a portion of these compliance costs to consumers, especially as they will have less competitive pressure to keep prices low. At the end of the day, this excise tax and citizenship verification proposal will unnecessarily
complicate tax preparation for all residents regardless of their citizenship status. It will expose Americans to privacy and safety risks. It will also increase the costs of money transfer services. All of this will have the effect of crowding out small businesses and other companies from the market. This is a misguided proposal that Congress should avoid making a reality.

Food Stamp Fraud Crackdown

On May 29, the U.S. Department of Agriculture (USDA), with help from the Federal Bureau of Investigation (FBI), charged a USDA employee and five others with misappropriating tens of millions of dollars in taxpayer-funded food stamp funds. This isn’t an isolated incident within federal agencies, which have been largely ineffective at rooting out waste, fraud, and abuse in government-run social welfare programs. Currently, the U.S. has 16 federal nutrition assistance programs administered by the USDA‘sFood and Nutrition Service (FNS). These programs are meant to serve low-income individuals and their families. Instead, bad actors can exploit these services, resulting in fewer resources available for those who truly need them. The programs are in need of stringent oversight, improved monitoring, and robust enforcement measures to protect taxpayer dollars and ensure that assistance reaches struggling Americans. Congress must focus on addressing these issues to protect the integrity of programs
designed to support vulnerable populations.

The recently-discovered fraud dates back to 2019, when Michael Kehoe orchestrated a network that supplied 160 unauthorized electronic benefit transfer (EBT) cards to stores across the New York area to illegally process more than $30 million in EBT transactions. Working alongside his co-conspirators Nawafleh, Omar Alrawashdeh, Obaid, and Emad Alrawashdeh, Kehoesubmitted approximately 200 fraudulent USDA applications, misappropriating USDA license numbers and, in some cases, doctoring application documents, to obtain EBT terminals for unauthorized stores—including smoke shops and other ineligible businesses. Arlasa Davis (a longtime USDA employee) was critical to the scheme and worked within the division of the USDA responsible for identifying fraud within the programs. “This fraud was made possible when USDA employee Arlasa Davis betrayed the public trust by selling confidential government information to the very criminals she was supposed to catch. Their actions undermined a program that
vulnerable New Yorkers depend on for basic nutrition,” U.S. Attorney Perry Carbone said in the media release.

Department of Agriculture Secretary Brooke Rollins noted that, “At the USDA, we are hyper-focused… on rooting out that waste, fraud and abuse, and… yesterday was, if not the largest, one of [the] largest stings.” She went on to tell Fox Business that she believes 20 to 30 percent of the program’s annual funding, estimated at roughly $200 billion, may be lost to fraud. The recently uncovered $66 million scheme, she says, is “just the tip of the spear.” She is consistently supportive of overall reform within the program. Unfortunately, fraud is rampant within government social welfare programs. Only days after extensive fraud within the USDA was exposed, on June 1, three Ohioans were indicted following a year-long investigation into the use of card skimmers to steal $600,000 from the Supplemental Nutrition Assistance Program (SNAP). It is time for Congress to act and protect taxpayer dollars by strengthening oversight and implementing stricter safeguards within SNAP. Instilling fiscal
responsibility and eliminating waste, fraud, and abuse is critical to ensure that assistance reaches only those who truly need it. Additionally, Congress should focus on proposed reforms that include strengthening work requirements and closing eligibility loopholes to reduce overall program spending. According to the 2023 Congressional Budget Office (CBO), estimated that work requirements are estimated to result in federal savings of $109 billion over a ten-year period. States should also have a larger role in administering SNAP benefits, allowing the states to tailor programs to fit their specific needs. With the right reforms and safeguards in place, Congress and the USDA can ensure that SNAP and other benefits remain in place for struggling Americans, not crooks and scammers.

BLOGS:


** Monday: Congress Should Reverse a Corrupt Trade Policy that Disadvantages U.S. Companies and Favors Foreign Competitors ([link removed])
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** Tuesday: What You Should Be Reading: May 2025 ([link removed])
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** Wednesday: Is Trump Pursuing Free and Fair Trade? No. ([link removed])
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** Thursday: America’s Air Traffic Control System Is Stuck in the 1980s ([link removed])
Friday: Permitting and Zoning Rules, Not Investors, Are Driving Higher Housing Prices ([link removed])

Media:

June 5, 2025: The DC Journal (Washington, D.C.) ran TPA’s op-ed, “Small businesses thrive on e-commerce, search platforms.”
June 5, 2025: The Rutland Herald (Rutland, Vt.) ran TPA's op-ed, “MAHA needs to go back to the drawing board.”
June 5, 2025: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on increasing in funding for the Baltimore City Inspector General.”
June 5, 2025: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on the Baltimore city budget.
June 5, 2025: WBFF Fox45 (Baltimore, Md.) mentioned TPA in their story, “Baltimore youth fund loses grant funds as it sends millions to Mayor Scott’s office.”
June 5, 2025: RealClearMarkets ran TPA’s op-ed, “Age Verification Mandates Create a Foreign Enforcement Fiasco.”
June 6, 2025: Florida Daily (Fleming Island, Fl.) ran TPA's op-ed, “Child Online Safety Bills Threaten Consumers Across the Country.”
June 6, 2025: Townhall ran TPA's op-ed, “America’s Air Traffic Control System Is Stuck in the 1980s.”
June 7, 2025: The Baltimore Sun (Baltimore, Md.) mentioned TPA in their story, “Youth fund loses grants as it sends millions to mayor's office Youth.”
June 8, 2025: Frederick News (Annapolis, Md.) ran TPA’s op-ed, “Small businesses thrive on e-commerce, search platforms.”
June 9, 2025: Foundation for Economic Education ran TPA’s op-ed, “This Administration Isn’t Promoting Free and Fair Trade.”
June 9, 2025: WBFF Fox45 (Baltimore, Md.) mentioned TPA in their story, “Expert: Expanding inspector general staff in Baltimore is 'an investment in the future.'”
June 9, 2025: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on expanding the inspector general’s office.
June 9, 2025: Eurasia Review ran TPA’s op-ed, “This Administration Isn’t Promoting Free and Fair Trade”
June 10, 2025: RealClearEnergy ran TPA’s op-ed, “The Permitting War Won’t Be Won By Judges Alone.”
June 10, 2025: The Daily Economy ran TPA’s op-ed, “Republican Antitrust Officials Shouldn’t Behave Like Progressives.”
June 12, 2025: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on Kelly Madigan’s reappointment.
June 12, 2025: WBOB-AM (Jacksonville, Fl.) interviewed me about government spending, taxes, and tariffs.
June 12, 2025: I appeared on 55WKRC (Cincinnati, Ohio) to talk about transportation funding, taxes, and food stamp fraud.

Have a great weekend!

David Williams
President
Taxpayers Protection Alliance
1101 14^th Street, NW
Suite 500
Washington, D.C.
Office: (202) 930-1716
Mobile: (202) 258-6527
www.protectingtaxpayers.org
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