The new 5% tax on money transfers proposed by Trump will allow the government to follow your transactions. Here’s how to avoid it...

The 5% tax on money transfers, hidden in Trump's "Big Beautiful" tax plan, has caused an uproar. Unveiled on Tuesday, the proposal is already raising eyebrows. It paves the way for increased government surveillance.

This project is part of Trump's vision for a second term. One detail stands out. This tax will give federal agencies direct access to your transfer information. Who sends what. When. To whom. Frequency.

The plan is clear. Do you use PayPal or MoneyGram? You may be forced to go through "qualified" providers to avoid this tax. Not very reassuring.

These famous "qualified" providers? The Treasury will choose them based on rather vague criteria. We don't really know how. The government will therefore decide which companies can process your payments. And it will collect your data in the process. Convenient for them, right?

Cryptos escape the tax net

Tax has its limits. Cryptocurrencies are doing well. Totally exempt! Peer-to-peer payments in crypto are not affected. If you use non-custodial crypto wallets, this tax will not impact you. A relief.

The current project does not monitor crypto tool developers either. This is quite surprising, given that this sector is generally targeted by regulators.

Peter Van Valkenburgh from Coin Center sees a risk. He recalls the "midnight regulation" of 2020. At that time, the Treasury wanted to force companies to collect data on unknown individuals. According to him, this tax plan could serve the same purpose.

He said:

"Regardless of your opinion on this tax, its current implementation will penalize privacy, complicate matters for legitimate platforms, and push people towards self-hosted crypto tools—which remain legal and, according to this proposal, completely out of the tax's reach."

The crypto community has noticed it well. Peer-to-peer crypto transfers are not affected. People are starting to think. Why not use crypto for international transfers? The more the tax hits traditional services, the more people will turn to crypto. The project ultimately encourages crypto adoption. Funny irony.

Chaos among Republicans over Trump's project

This tax is just a piece of a much larger plan. House Republicans are fighting to get it passed. The proposal promises to reduce taxes on tips, overtime, and auto loan interest. But it also cuts $1.5 trillion from programs like Medicaid and SNAP. In total? About $5 trillion in tax relief.

The Ways and Means Committee approved it on Wednesday. Endless night session. Not a single Democratic vote in favor. Mike Johnson pushed the meetings past midnight to handle internal disputes. It remains a mess. Deadline: May 26. With such a slim majority, every Republican vote counts.

Some Republicans already hate parts of the text. The Freedom Caucus finds the Medicaid rules "ridiculous." Not enough savings, they say. At the same time, Republicans from New York threaten to block everything without better tax deductions for their voters. The current cap is $10,000. Trump proposes $30,000 for couples. Not enough, according to them.

Brett Guthrie claims that the changes "would strengthen" Medicaid. Jimmy Gomez, a California Democrat living with diabetes, disagrees. He criticizes the increase in costs for people with pre-existing conditions.

And then, the cherry on top: according to a new report, this project would reduce taxes for most, but Americans earning less than $15,000 per year would see their taxes increase. Not very fair, it seems.