The "U.S. Foreign Labor Levy" legislative proposal consists of four tax pillars targeting documented non-citizen labor across all U.S. industries, aiming to shift corporate hiring behavior.
An assessment has been conducted on how these taxes would alter reliance on an estimated 8.15 million documented, working non-citizen workers across visa, green card, and humanitarian pathways (H-1B, OPT, L-1, EB, DACA, TPS, asylum seekers, parolees), focusing on profit-driven decisions. Undocumented workers are excluded as they cannot be associated with an employer.
Using data as of May 20, 2025, the below estimates the impact and calculates U.S. annualized tax income over 2025–2028.
Baseline: Current Usage and Costs
- Volume: ~8.15 million documented, working non-citizen workers annually, distributed by industry (adjusted below).
- Visa Totals: ~1.65M
- H-1B: ~500K (USCIS FY 2024–2025, stable)
- OPT (F-1 Students): ~250K (MPI 2025, increased due to rising international student enrollment)
- L-1/J-1: ~100K (stable, USCIS 2024)
- H-2A (Agricultural): ~300K (DOL 2024, slight increase for 2025)
- H-2B (Non-Agricultural): ~130K (66K regular cap + 64,716 supplemental visas, USCIS FY 2025)
- TN (NAFTA): ~50K (stable, USCIS 2024)
- Other Visas (O-1, P, etc.): ~320K (miscellaneous categories, adjusted for 2025)
- Green Cards (LPRs in Workforce): ~6.5M
- New Employment-Based (EB): ~150K principals annually (USCIS FY 2025, employment-based limit ~160K, reduced carryover)
- Active EB Holders: ~600K from prior years (cumulative workforce)
- Total LPRs: ~13M (DHS/OHS 2024–2025), with ~50% labor force participation (OHS 2024), yielding ~6.5M working LPRs (including family-based, diversity, humanitarian categories)
- Other (Humanitarian with Work Authorization): ~4.15M
- DACA: ~425K (working estimate: 400K–450K, chart data, adjusted for labor participation ~90%)
- TPS: ~675K (working estimate: 650K–700K, chart data, adjusted for labor participation ~95%)
- Asylum Seekers: ~500K (working estimate: 400K–600K, chart data, adjusted for labor participation ~80%)
- Parolees: ~150K (working estimate: 100K–200K, chart data, adjusted for labor participation ~75%)
- Other Humanitarian: ~2.4M (refugees, asylees, other categories with work authorization, DHS 2024–2025, with ~60% labor participation)
Total: 1.65M (visas) + 6.5M (working LPRs) + 0M (undocumented, excluded) + 4.15M (humanitarian with work authorization) = 8.15M.
Note: This total reflects documented workers actively employed in formal roles with employer association (visas, LPRs, humanitarian categories with work authorization). Undocumented workers (~5.7M, Pew 2024 adjusted for 2025) are excluded as they cannot be tracked via employer records.
- Wages: Average ~$52,000 across sectors (weighted: Agriculture ~$35K, Professional ~$88K, BLS 2025 adjusted for inflation).
- Profit Edge: Documented non-citizens save firms ~$8,000–$15,000 per worker yearly (wage gaps, tax breaks), averaging $11,000, totaling $89.65 billion industry-wide (8.15M × $11,000).
Impact of the Four (4) Tax Pillars
1) Work Visa and Employment Levy
- Structure: Taxes on all employed non-citizen workers start at 10% of wages in Year 1, rising to 30% by Year 3. For a $52,000 salary:
- Year 1: $5,200/worker (10%)
- Year 2: $10,400 (20%)
- Year 3: $15,600 (30%)
- Affected Workers: All 8.15M documented, working non-citizen workers (H-1B, OPT, L-1, EB, DACA, TPS, asylum seekers, parolees, other LPRs, humanitarian workers). H-1B petition caps for top employers (50% of 2019 approvals in Year 1, 25% in Year 2, 0% in Year 3).
- Cost Impact: By Year 3, $15,600/worker exceeds savings ($11,000), flipping profit motive. Firms might cut usage 30–50% (2.445M–4.075M fewer), with tech (H-1B) resisting due to STEM shortages and agriculture (H-2A) lagging.
- Shift: U.S. hiring or offshoring rises, especially in tech/professional services.
2) Foreign Worker Payroll Levy
- Structure: 20% of wages in Year 1, rising to 50% by Year 3, with a 25% surcharge for H-1B workers paid below local median wage (~300K workers):
- Year 1: $10,400/worker ($52K × 20%) + $13,000 surcharge for H-1B
- Year 2: $18,200 (35%) + $13,000 surcharge
- Year 3: $26,000 (50%) + $13,000 surcharge
- Affected Workers: All 8.15M documented, working non-citizen workers.
- Cost Impact: Year 1’s $10,400 (plus $13,000 surcharge for some) eliminates savings, expecting a 40–60% drop (3.26M–4.89M fewer), with agriculture/hospitality lagging (H-2A/H-2B reliance), tech shifting faster.
- Shift: Strong push to domestic hiring; low-wage sectors resist longer due to labor shortages.
3) Employee Remittance Levy
- Structure: 9% of remittances in Year 1, rising to 18% by Year 3. Assume 20% of wages ($10,400/worker) sent abroad:
- Year 1: $936/worker ($10.4K × 9%)
- Year 2: $1,456 ($10.4K × 14%)
- Year 3: $1,872 ($10.4K × 18%)
- Affected Workers: All 8.15M, worker-paid.
- Cost Impact: Year 3’s $1,872 take-home loss deters workers, shrinking supply marginally (~5–8% attrition, 407.5K–652K).
- Shift: Minor firm impact; bigger in agriculture (H-2A/H-2B, high remittances).
4) Offshoring & Remote Labor Levy
- Structure: 15% of wages per remote worker ($7,800 at $52K) in Year 1, rising to 40% ($20,800) by Year 3.
- Affected Workers: Offshoring rises from 200K jobs in Year 1 to 600K by Year 3 due to tax pressure.
- Cost Impact: Adds $12.48B by Year 3 ($20,800 × 600K). 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 ~$16,536 (Visa $5,200 + Payroll $10,400 + Remittance $936). Savings drop to ~-$5,536; usage dips 10–20% (815K–1.63M fewer).
- Year 3: ~$43,472 ($15,600 + $26,000 + $1,872). Non-citizens cost $32,472 more than U.S. workers—usage falls 50–70% (4.075M–5.705M fewer).
- Shift: U.S. workers (~2.2M STEM/labor pool annually, BLS 2025) fill gaps; offshoring rises (200K–600K) but is capped by Pillar 4. Tech shifts fastest; agriculture lags.
Annualized Tax Income (2025–2028)
- Assumptions: 8.15M workers in 2025, dropping linearly to 4.075M by 2028 (50% reduction). Average wage $52K. Remittance tax worker-paid; others firm-paid. Offshoring rises from 200K to 600K. H-1B surcharge on 300K workers (60% of 500K, decreasing to 180K by 2028).
- Yearly Revenue:
- 2025:
- Payroll: 8.15M × $10,400 + 300K × $13,000 = $88.66B
- Visa: 8.15M × $5,200 = $42.38B
- Remittance: 8.15M × $936 = $7.63B
- Offshore: 200K × $7,800 = $1.56B
- Total: $88.66B + $42.38B + $7.63B + $1.56B = $140.23B
- 2026:
- Payroll: 7.13125M × $18,200 + 270K × $13,000 = $133.29B
- Visa: 7.13125M × $10,400 = $74.17B
- Remittance: 7.13125M × $1,456 = $10.37B
- Offshore: 350K × $15,600 = $5.46B
- Total: $133.29B + $74.17B + $10.37B + $5.46B = $223.29B
- 2027:
- Payroll: 6.1125M × $26,000 + 240K × $13,000 = $162.05B
- Visa: 6.1125M × $15,600 = $95.35B
- Remittance: 6.1125M × $1,872 = $11.46B
- Offshore: 500K × $20,800 = $10.4B
- Total: $162.05B + $95.35B + $11.46B + $10.4B = $279.26B
- 2028:
- Payroll: 4.075M × $26,000 + 180K × $13,000 = $108.29B
- Visa: 4.075M × $15,600 = $63.57B
- Remittance: 4.075M × $1,872 = $7.63B
- Offshore: 600K × $20,800 = $12.48B
- Total: $108.29B + $63.57B + $7.63B + $12.48B = $191.97B
Total (4 Years): $140.23B + $223.29B + $279.26B + $191.97B = $834.75B
Annualized: $834.75B ÷ 4 = $208.69B/year
Taxation Summary: With these taxes, corporations’ financial “need” for documented non-citizen workers diminishes by Year 3: Non-citizens cost $32,472 more than U.S. workers, slashing reliance from 8.15M to 4.075M.
Firms hire Americans (~3.26M replaced, see below) or offshore modestly (capped by Pillar 4). Revenue peaks at $279.26B in 2027, averaging $208.69B/year, funding U.S. workforce development. Profit logic drives the shift, proving the “need” was economic.