The "U.S. Foreign Labor Levy" legislative proposal consists of four tax pillars targeting non-citizen labor across all U.S. industries, aiming to shift corporate hiring behavior.
An assessment has been conducted on how these tariffs would alter reliance on an estimated 6.65 million non-citizen workers across visa, green card, and undocumented pathways (H-1B, L-1, OPT, EB, undocumented), focusing on profit-driven decisions..
Using data as of March 25, 2025, the below estimates the impact and calculates U.S. annualized tax income over 2025–2028.
Baseline: Current Usage and Costs
- Volume: ~6.65 million non-citizen workers annually, distributed by industry (adjusted below).
- Visa Totals: ~1.45M (H-1B ~500K, OPT ~200K, L-1/J-1 ~100K, EB ~150K new principals annually, plus ~500K active EB GC holders from prior years).
- Undocumented: ~4.2M in formal roles (Pew 2023, MPI 2024, USAFacts adjusted to 2025).
- Total: 1.45M (visas) + 4.2M (undocumented) = 5.65M, plus ~1M active EB GC holders (subset of 8.9M total employed GC holders, scaled for recent entrants).
- Wages: Average ~$48,000 across sectors (weighted: Agriculture ~$32K, Professional ~$80K, BLS 2024 adjusted).
- Profit Edge: Non-citizens save firms ~$6,000-$12,000 per worker yearly (wage gaps, tax breaks), averaging $9,000, totaling $59.85 billion industry-wide (6.65M × $9,000).
Impact of the Four (4) Tax Pillars
1. Work Visa Tax
- Structure: H-1B, L-1, etc., taxes start at 5% of wages in Year 1, rising to 20% by Year 4. For a $48,000 salary:
- Year 1: $2,400/worker
- Year 2: $4,800 (10%)
- Year 3: $7,200 (15%)
- Year 4: $9,600 (20%)
- Affected Workers: ~1.45M (500K H-1B, 100K L-1/J-1, 200K OPT, 150K new EB, 500K active EB GC holders).
- Cost Impact: By Year 4, $9,600/worker exceeds savings ($9,000), flipping profit motive. Firms might cut visa usage 35-55% (507.5K-797.5K fewer), with tech (H-1B) and agriculture (H-2A) resisting more.
- Shift: U.S. hiring or offshoring rises, especially in tech/professional services.
2. Foreign Worker Payroll Tax
- Structure: 10% of wages in Year 1, rising to 30% by Year 4:
- Year 1: $4,800/worker ($48K × 10%)
- Year 2: $7,200 (15%)
- Year 3: $9,600 (20%)
- Year 4: $14,400 (30%)
- Affected Workers: All 6.65M non-citizen workers (visas + undocumented + 1M active EB GC).
- Cost Impact: Year 1’s $4,800 cuts savings to $4,200/worker. Expect a 45-65% drop (2.99M-4.32M fewer), with agriculture lagging, tech shifting faster.
- Shift: Strong push to domestic hiring; low-wage sectors resist longer.
3. Employee Remittance Tax
- Structure: 9% of remittances in Year 1, 18% by Year 4. Assume 20% of wages ($9,600/worker) sent abroad:
- Year 1: $864/worker ($9.6K × 9%)
- Year 4: $1,728 (18%)
- Affected Workers: All 6.65M, worker-paid.
- Cost Impact: Year 4’s $1,728 take-home loss deters workers, shrinking supply marginally (~5-10% attrition, 332.5K-665K).
- Shift: Minor firm impact; bigger in construction/agriculture (high remittances).
4. Offshoring & Remote Labor Tax
- Structure: 10% of wages per remote worker (~$4,800 at $48K).
- Affected Workers: Offshoring rises from 75K jobs in Year 1 to 300K by Year 4 due to tax pressure.
- Cost Impact: Adds $1.44B by Year 4 ($4,800 × 300K). Credits for U.S. hiring curb this.
- Shift: Limits offshoring; reinforces U.S. hiring in professional services.
Combined Effect on “Need”
- Year 1: Total tax per worker ~$8,064 (Visa $2,400 + Payroll $4,800 + Remittance $864). Savings drop to ~$936; usage dips 15-25% (997.5K-1.66M fewer).
- Year 4: ~$25,728 ($9,600 + $14,400 + $1,728). Non-citizens cost $16,728 more than U.S. workers—usage falls 55-75% (3.66M-4.99M fewer).
- Shift: U.S. workers (~2M STEM/labor pool annually) fill gaps; offshoring rises (75K-300K) but is capped by Pillar 4. Tech shifts fastest; agriculture lags.
Annualized Tax Income (2025–2028)
- Assumptions: 6.65M workers in 2025, dropping linearly to 2.99M by 2028 (55% reduction). Average wage $48K. Remittance tax worker-paid; others firm-paid. Offshoring rises from 75K to 300K.
- Yearly Revenue:
- 2025:
- Payroll: 6.65M × $4,800 = $31.92B
- Visa: 1.45M × $2,400 = $3.48B
- Remittance: 6.65M × $864 = $5.7456B
- Offshore: 75K × $4,800 = $0.36B
- Total: $31.92B + $3.48B + $5.7456B + $0.36B = $41.5056B
- 2026:
- Payroll: 5.66M × $7,200 = $40.752B
- Visa: 1.23M × $4,800 = $5.904B
- Remittance: 6.65M × $864 = $5.7456B
- Offshore: 150K × $4,800 = $0.72B
- Total: $40.752B + $5.904B + $5.7456B + $0.72B = $53.1216B
- 2027:
- Payroll: 4.66M × $9,600 = $44.736B
- Visa: 1.01M × $7,200 = $7.272B
- Remittance: 6.65M × $864 = $5.7456B
- Offshore: 225K × $4,800 = $1.08B
- Total: $44.736B + $7.272B + $5.7456B + $1.08B = $58.8336B
- 2028:
- Payroll: 2.99M × $14,400 = $43.056B
- Visa: 0.80M × $9,600 = $7.68B
- Remittance: 6.65M × $1,728 = $11.4912B
- Offshore: 300K × $4,800 = $1.44B
- Total: $43.056B + $7.68B + $11.4912B + $1.44B = $63.6672B
Total (4 Years): $41.5056B + $53.1216B + $58.8336B + $63.6672B = $217.128B
Annualized: $217.128B ÷ 4 = $54.282B/year
Taxation Summary:
With these taxes, corporations’ financial “need” for non-citizen workers vanishes by Year 4: Non-citizens cost $16K+ more than U.S. workers, slashing reliance from 6.65M to 2.99M+. Firms hire Americans (~3.11M replaced, see below) or offshore modestly (capped by Pillar 4). Revenue peaks at $63.67B in 2028, averaging $54.28B/year, funding U.S. workforce development. Profit logic drives the shift, proving the “need” was economic.