The United States Congress has passed the ‘Big, Beautiful Bill’ backed by US President Donald Trump. The bill is now headed to President Trump, who is expected to sign it into law.
The legislation introduces a 1% tax on remittances—the money transfers individuals in the US send abroad—and a new excise tax on university endowments. Let’s see what this means in detail.
Impact on remittances
The 1% levy on outbound money transfers will affect individuals who send funds from the US to other countries. This tax will apply to transfers made through banks, money transfer services, and other formal channels.
It marks the first time the US has introduced a national remittance tax, a move expected to impact millions of immigrant households and families that rely on cross-border financial support.
Earlier proposals had suggested a higher rate of up to 5%, but the final version passed by Congress lowered it to 1%. The tax is intended to generate revenue for other priorities under the legislation, including border security and immigration enforcement.
The tax will apply to transfers made on or after January 1, 2026, and is intended to generate revenue for other legislative priorities, including border security and immigration enforcement.
University endowments
The Big, Beautiful Bill also significantly expands the excise tax on university endowments, focusing on institutions with the largest financial reserves.
According to The New York Times, universities like Harvard, Princeton, and Yale, which hold more than $2 million per student in endowment assets, will now face an 8% tax on investment income.
Education leaders have expressed concern that this will make college less affordable and could hurt financial aid programmes.
“The bill would make college less affordable,” said Lynn Pasquerella, president of the American Association of Colleges and Universities, in an interview with The New York Times.
Opponents argue that the tax is more about targeting elite universities than sound policy and that it may have little impact on federal revenues compared to the bill’s overall cost.
An exemption was added during Senate negotiations for colleges with fewer than 3,000 students, benefiting institutions like Hillsdale College, which had lobbied against the tax.
What else is in the Bill
These tax measures are part of a legislative package that includes:
- $4.5 trillion in tax cuts
- Increased funding for defence and border enforcement
- Tighter work requirements for Medicaid and food aid recipients
- Changes to student loan programs, including new caps on graduate borrowing
The bill passed the Senate on July 1, with Vice President JD Vance casting the tie-breaking vote, and cleared the House on July 3 by a narrow 218–214 margin.
US President Trump is expected to sign the bill into law on July 4, meeting the Republican Party’s Independence Day deadline.
