What's a revenge tax?

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 10 June 2025

⏱️ 9 minutes

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Summary

For four decades, the US has maintained a consistent policy position: money should be fairly free to come and go in and out of the country. That's changing.

Two sections in the One Big Beautiful Bill Act would add friction. First is a 3.5% tax on immigrants sending money home, commonly known as remittances. Second is what's known as Section 899 or, colloquially, the 'revenge tax'. This one is making Wall Street wary. It would slap extra taxes on people and businesses investing in the U.S. if their home countries were deemed to tax Americans unfairly.

We explain these two taxes that could mark a shift in our free-flowing money era.

Related episodes:
The long view of economics and immigration (Two Indicators) (Apple / Spotify)
The "chilling effect" of deportations (Apple / Spotify)

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Transcript

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0:00.0	NPR.
0:01.9	Imagine a toll booth on the U.S. border.
0:14.8	There are three checkpoints, one for people, one for goods, and one for money.
0:19.9	The line for people is long.
0:22.3	You've got visas and passports to check, fingerprints, questioning.
0:26.5	The line for goods is a little shorter.
0:29.1	You've got freight containers with the odd biosecurity spot check,
0:33.1	now some added tariff hassles.
0:35.2	But the toll booth for money runs very swiftly. Money comes in and
0:40.1	out of the country with barely a glance. We've become, in a way, the world's biggest tax haven.
0:46.6	Law professor Ruvan Aviona says since the Reagan administration, the U.S. has encouraged global
0:51.7	money to flow freely. But two sections tucked away in the big spending bill going through Congress could disrupt that.
0:59.4	A tax money immigrant sent to their home countries.
1:02.0	And another measure that's been called a revenge tax.
1:05.5	It's a massive reversal of the position that we've taken for many, many decades.
1:12.2	This is the indicator for Planet Money. I'm Adrienne Ma. And I'm Darien Woods. Today on the show,
1:17.2	taxes on global money, sometimes called capital controls. We explain the proposals in the
1:23.1	one big beautiful bill act. We ask what this huge potential shift could mean for the U.S. economy.
1:33.3	It's got to have been a bipartisan position for the last 40 years. Capital should be free to come
1:38.9	and go in and out of the U.S. Yeah, no, definitely. I mean, at least since the 1980s, since the Reagan administration,
1:45.9	we've really encouraged foreign capital to come into the United States.
1:50.2	Ruvon Aviona is a tax law professor at the University of Michigan.
	...

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