U.S. Foreign Labor Levy Legislative Proposal
(Updated March 2026)
The U.S. Foreign Labor Levy proposal establishes a 4-Pillar, 4-Tier Salary Framework targeting approximately ~28.5 million documented non-citizen workers and students across all U.S. industries (latest estimates as of March 2026, including offshore equivalents).
Its primary goal is to rebalance corporate incentives toward hiring qualified U.S. citizen workers by removing the profit advantage of relying on legal non-citizen labor. The framework applies tiered levies that:
- Eliminate wage-based cost advantages for hiring non-citizen workers and students,
- Generate significant tax revenue to reinvest in U.S. workforce development, and
- Ensure fairness in low-wage sectors such as agriculture and hospitality.
The Work Visa & Employment Levy, Foreign Worker Payroll Levy, and Employee Remittance Levy operate within a 4-Tier Salary Structure (< $37K, $37K–$63K, $63K–$105K, > $105K; adjusted for 2025 inflation). Rates for workers under $37K remain low and relatively constant to protect industries where U.S. citizens are less likely to participate at current wage levels.
Additionally, the Offshoring Levy addresses remote foreign hiring. Undocumented workers are excluded due to enforcement challenges. This assessment models the framework’s application across visas, green cards, humanitarian pathways, offshore employees, and international student enrollment.
It projects impacts on ~28.5 million documented workers and students between 2026 and 2029, estimating both the tax revenues generated and the number of jobs transitioned back to qualified U.S. citizen workers, assuming a realistic reduction in corporate reliance on legal non-citizen labor and students over the period, with a substantial portion of those positions filled by qualified U.S. citizen workers.
Baseline: Current Usage and Costs
Volume: Approximately ~28.5 million documented non-citizen labor equivalents annually (updated with verified data as of early 2026):
- Visa workers (~1.7 million): H-1B, L-1, H-2A, H-2B, TN, and others.
- Green Cards (working LPRs) (~10.8 million).
- Humanitarian with Work Authorization (~2.8 million).
- Offshore contractors serving U.S. firms (~12.3 million equivalents).
- Foreign Students (with work options) (~0.9 million).
Salary Distribution (BLS 2025–2026, adjusted for inflation):
- < $37K: ~30%
- $37K–$63K: ~40%
- $63K–$105K: ~20%
- $105K: ~10%
Profit Edge: Non-citizen labor provides firms an estimated cost advantage (wage gaps, flexibility, etc.), though the exact per-worker savings varies significantly by sector and skill level.
Impact of the Four Tax Pillars:
1. Work Visa and Employment Levy
Structure (Per Worker, Tiered by Salary):
- < $37K: 3% (Years 1–3, constant)
- $37K–$63K: 7% → 14% → 20%
- $63K–$105K: 10% → 18% → 28%
- $105K: 15% → 25% → 45%
H-1B/L-1 surcharge for below-median wages.
Cost Impact: By Year 3, costs exceed savings in most mid- and high-wage categories, reducing usage by 35–55%.
2. Foreign Worker Payroll Levy
A similar tiered escalation applied to wages.
Cost Impact: By Year 3, the combined effect eliminates most wage-based savings, driving a 40–60% usage drop in affected categories.
3. Employee Remittance Levy
Applied to average annual remittances (~$10,400 per worker); low-tier rates remain modest, with escalation in higher brackets.
Cost Impact: Reduces worker supply and attractiveness by an estimated 4–7%.
4. Offshoring & Remote Labor Levy
15% → 30% → 40% applied to the average value of offshore services ($61K equivalent).
Directly targets the large offshore segment (12.3 million equivalents), which currently operates with minimal visibility and tax friction.
Projected Reduction Timeline
- Year 1 (2026): 10–20% initial drop
- Year 2 (2027): 12–18% cumulative reduction
- Year 3 (2028): 35–50% cumulative reduction
- Year 4 (2029): Stabilizes at approximately 40–50% reduction (~11.4M–14.25M fewer equivalents)
Combined Effect on “Need” for Foreign Labor
The framework is projected to reduce corporate reliance on legal non-citizen labor equivalents from ~28.5 million to roughly 14–17 million by the end of 2029. Assuming a 70–80% replacement rate (with the remainder absorbed by automation, further offshoring, or efficiency improvements), this could result in approximately 8–11 million positions shifting toward qualified U.S. citizen workers over the four-year period.
Annualized Tax Revenue (2026–2029)
Yearly Revenue (Illustrative, based on revised baseline):
- 2026 (Year 1): ~$520B–$580B
- 2027 (Year 2): ~$780B–$860B
- 2028 (Year 3): ~$920B–$1,050B
- 2029 (Year 4): ~$650B–$720B
Total (4 Years): ~$2.87B – $3.21 trillion
Annualized Average: ~$718B – $802B per yearTaxation Summary
The 4-Tax Pillar, 4-Tier Framework flips the profit motive. By Year 3, non-citizen labor options become significantly more expensive than comparable U.S. citizen workers in most mid- and high-wage categories, while low-wage sectors receive continued protection. Reliance on legal non-citizen labor equivalents is projected to drop from ~28.5 million to ~14–17 million.
Firms could hire 8–11 million qualified U.S. citizen workers (at a 70–80% replacement rate), with tech and professional services shifting fastest and low-wage sectors largely shielded. Revenue averaging roughly $750 billion per year would fund continuous U.S. citizen workforce training, apprenticeships, and related programs.
The framework demonstrates that much of the current reliance on foreign labor is driven by economic incentives, which can be rebalanced through fair, tiered levies without broad exemptions.