In a typical year, more than 270 million immigrants living and working abroad send cash transfers, known as remittances, to their home countries. In 2019, two-thirds of all international migrants lived in just 20 countries, with the United States holding the most at 51 million (about 19% of the world’s total). (United Nations).

As of 2020, despite the lockdowns that have devastated economies and led unemployment rates to skyrocket, remittances have generally held up. In some cases, they’ve been higher than usual, based on the latest available data. Remittances to Mexico and Pakistan experienced record increases, while those to Vietnam and the Philippines have held steady. 

Why are remittances important?

Remittances are an important aspect of the economy. In 2019, immigrants sent home a record US$554 billion. According to the Inter-American Development Bank (IDB), 70%-90% of immigrants send money to themselves to save or invest, while the others send money to pay bills. This shows remittances are an essential tool not only short term but for immigrants looking forward to the future.

Pennsylvania’s proposed Bill

Senator Doug Mastriano, a Member of the Pennsylvania Senate from the 33rd district, along with other Pennsylvania Republican lawmakers, has put forward a bill that would impose a tax on international remittances made by illegal immigrants and divert the revenue to the commonwealth’s property tax and rent relief fund. The bill aims to collect a fee for each transaction sent to a recipient outside the United States equal to 2% of the amount of the transaction, but not exceeding $5,000.

According to Mastriano, the proposed bill’s goal is to deter illegal immigration while collecting revenue for tax breaks for legal citizens in the commonwealth. The tax on remittances would go to the Property Tax & Rent Rebate Program conceived by the state legislature in 1971, which according to figures cited in a statement by state lawmakers, has allowed older and disabled adults to receive more than $7.3 billion in property tax and rent relief. 

With the state-wide economic devastation of COVID-19, coupled with rising inflation, the Property Tax Rent Rebate Program’s stagnant income limits have undoubtedly prevented an increasing number of Pennsylvanians from accessing this necessary aid. If this unique bill becomes law, it will be interesting to see its efficacy in providing Pennsylvanians with more support in these critical times.