While the Trump administration has enraged its critics by deploying federal agents to do the necessary but messy job of apprehending illegal aliens, an efficient and less provocative tool for deterring illegal immigration has yet to be utilized: taxing earnings that aliens send back to their homelands. These transmitted earnings are also known as remittances.   

New research by the Federation for American Immigration Reform (FAIR) estimates that the U.S. lost over $200 billion to foreign countries in remittances in 2021, the last year for which objective, reliable data were available. Given the torrent of illegal border crossings encouraged by the Biden White House, the current number is likely much higher.  

Why should this matter to the average American? Remittances represent a significant loss of economic activity within the U.S. When money earned here is sent abroad, it is not spent in the U.S. and, therefore, it cannot fuel local businesses, jobs, and tax revenue.  

The amount of U.S. dollars sent overseas is staggering when put into context. According to the FAIR estimates for the 2024 fiscal year, the $200 billion sent out of the U.S. economy in 2021 alone would be more than enough to operate the Department of Homeland Security ($140.6 billion) and the State Department ($57.6 billion) combined. That sum is also more than double the  budget of the Department of Housing and Urban Development ($88.3 billion) and almost four times the amount of money spent on the Department of Justice ($52 billion). When sent abroad, these funds bolster foreign economies, propping up many corrupt and anti-American regimes while depriving U.S. communities of sales taxes.  

Currently only one state, Oklahoma, charges a fee on remittance transfers, which it uses to fund public services and benefits. Other states, including Ohio, are considering implementing a similar tax. While the July 2025 budget reconciliation bill enacted a limited 1 percent tax on certain remittances, it exempted bank transfers and credit/debit transactions, largely reducing the impact a more expansive fee would have.    

As many illegal aliens are sending cash home, they are also receiving welfare benefits meant for the use of legal residents. A 2023 report found that households with children of illegal aliens received approximately $5.8 billion in benefits from the Supplemental Nutritional Assistance Program (SNAP, or food stamps), $1.43 billion from Temporary Assistance for Needy Families (TANF), and $13.4 billion in child tax credits in 2021, as well as a $16.2 billion increase in Medicaid-funded emergency services for illegal aliens under the Biden administration when compared to the first Trump administration.   

Remittances from the U.S. have become oxygen to foreign economies. The most glaring example is Mexico, where, unlike other countries, remittance data is highly detailed and up to date. Mexico is the largest recipient of remittances from the U.S., taking in $62.53 billion in 2024. That represents 3.4 percent of Mexico’s GDP. It explains why Mexican President Claudia Sheinbaum cryptically suggests Mexico will “mobilize” if the U.S. imposes a remittance tax.  

Beyond economics, remittances raise security concerns, particularly when it comes to their potential to fund organized crime in other countries. A 2023 report by the Mexican data collection firm Signos Vitales suggests that at least $4.4 billion of the $58.5 billion in remittances sent to Mexico in 2022 may be tied to narcotics trafficking or other illicit activities. Suspicious patterns, such as Minnesota—a state with a small Mexican population—sending $4.3 billion to Mexico (a 585 percent increase over five years), reek of possible money laundering by cartels.  

Taxing remittances from illegal aliens serves as a powerful disincentive for further illegal migration and criminal activity. The prospect of reduced earnings due to a remittance tax would discourage individuals from crossing the border illegally, particularly those motivated by the ability to send untaxed earnings abroad.   Enforcement operations by ICE are an important part of reforming our dysfunctional immigration system, but much more is needed. Taxing remittances from illegal aliens is another pragmatic way of deterring illegal immigration while protecting America’s economic interests. When the impediments to living in the U.S. illegally begin to outweigh the benefits, the magnet drawing illegal aliens here will greatly diminish. The result will be greater border security, better use of taxpayer dollars, and a more orderly and prosperous society for all Americans.