Trump’s new 5% remittance tax bill will let the government track your money. Here’s how to avoid that

The 5% remittance tax hidden deep inside Trump’s “Big Beautiful” tax reform bill has started a firestorm. This proposal was rolled out on Tuesday and has already drawn heavy criticism for opening the door to more government surveillance.

The bill is being pushed as part of Trump’s broader second-term agenda, but one detail stands out: this remittance tax will give federal agencies a direct line into who’s sending money abroad and how often.

Under the new plan, anyone using regular remittance services like PayPal or MoneyGram could be forced to use only “qualified” providers if they want to avoid paying the extra tax.

Those providers will be handpicked based on vague rules by the Treasury Department, which has left out specifics on how they’ll define who qualifies. That means the federal government gets to decide which companies are allowed to process these payments—while gathering your data in the process.

Crypto users escape the new tax rule

But the tax doesn’t cover everything. Crypto transactions, especially peer-to-peer payments, are completely excluded. That means anyone using self-custody tools or non-custodial crypto wallets doesn’t have to worry about the tax at all.

The current version of the bill doesn’t force any new rules or surveillance on developers building these tools, which is a rare exception in a space often targeted by regulations.

Peter Van Valkenburgh, who runs Coin Center, explained in a blog post that this new rule could lead back to what he called the 2020 midnight rulemaking, where the Treasury tried to make companies collect private information on people they didn’t even know.

Peter warned that the new tax plan could be used in the same way to expand surveillance. He said:

“No matter your position on the remittance tax as policy, the current implementation in the Big Beautiful Bill will penalize privacy, complicate compliance for law‑abiding exchanges, and push users toward self‑hosted crypto tools—which remain fully legal and, under this very bill, entirely outside the tax’s scope.”

The loophole is getting attention in the crypto community. Since the bill doesn’t touch peer-to-peer crypto transfers, people are already considering moving more of their international money transfers into the crypto space. The more this tax hits traditional services, the more users could lean on crypto tools to avoid it. The bill, intentionally or not, ends up boosting adoption.

House Republicans clash over details of Trump’s bill

The remittance tax is only one part of a much larger plan that House Republicans are trying to get passed. The bill includes Trump’s top tax promises—cutting federal taxes on tips, overtime, and car loan interest—while also slashing over $1.5 trillion in social programs like Medicaid, SNAP, and green energy spending. The total package adds up to about $5 trillion in tax breaks.

On Wednesday, the House Ways and Means Committee signed off on the bill after a long overnight session, pushing it through without a single Democratic vote. Mike Johnson, the House Speaker, kept meetings going past midnight to fix internal disagreements, but it’s still a mess. The bill needs to be passed before May 26, and with a narrow Republican majority, there’s no room for anyone in the party to back out.

Some Republicans already hate parts of it. Members of the Freedom Caucus are calling the Medicaid work rules a “joke,” saying they don’t cut enough costs. At the same time, Republicans from New York and other high-tax states are threatening to block the bill if they don’t get better state and local tax (SALT) deductions for their districts. The current deduction cap is $10,000, and while Trump’s plan triples it to $30,000 for married couples, these lawmakers say it’s not enough.

Brett Guthrie, who chairs the House Energy and Commerce Committee, defended the Medicaid changes by saying they would “strengthen and sustain” the program. But Jimmy Gomez, a Democrat from California, said during a House hearing that he’s living with Type 2 diabetes and blasted the bill for raising out-of-pocket costs for people with pre-existing conditions.

There’s also one last layer. A new report from the Joint Committee on Taxation shows that while most people would get lower taxes under the bill, Americans earning under $15,000 a year would actually see their tax rates go up.

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