Less Immigration = More Taxes?
Matt Welch | December 3, 2007, 11:38am
Goalpost-shifting alert: Restrictionist weathervane Mickey Kaus
reluctantly points out that --
contra the last 15 years of anti-immigration hysteria -- the ongoing reduction in the number of immigrants, legal and illegal, will probably amount to a net
negative on the solvency of the welfare state:
to the extent the current immigration debate unexpectedly chases FICA-paying illegal immigrants away, and discourages admitting more legal immigrants, mightn't it by the same token make Social Security less solvent than currently projected? ... kf's solutions: a) If the number of illegals actually falls dramatically, that's what will make it possible to eventually get public support for a reasonable increase in quotas for legals; b) Find other ways to make the system solvent--like reducing the benefits of the affluent. If we have to raise taxes or cut benefits a bit more to make up for controlling the borders, it's worth it.
If Kaus genuinely thinks that his border-wall bedfellows will a) develop an overnight enthusiasm for legal immigrants, or b) enthusiastically back an entitlement cut that even Republicans barely bother talking about anymore, then I suspect he's in for a disappointment. But the more interesting tell here is that unless restrictionists unexpectedly develop a complicated starve-the-beast scenario, they're going to have to eventually ditch the whole illegals-are-sucking-the-welfare-teat argument for more traditional phobias, particularly as Boomers retire and Mexico runs out of Mexicans.
For a great rundown of how illegal immigration affects government largesse, scroll down to Shikha Dalmia's contribution to reason's excellent August/September 2006 cover package. Excerpt:
But immigrants aren't flocking to the United States to mooch off the government. According to a study by the Urban Institute, the 1996 welfare reform effort dramatically reduced the use of welfare by undocumented immigrant households, exactly as intended. Another important development happened in 1996: The Internal Revenue Service began issuing identification numbers to enable illegal immigrants who don't have Social Security numbers to file tax returns.
One might have imagined that people earning meager wages and fearing deportation would take a pass on the IRS's scheme. Not so. Each year close to 8 million of the 12 million or so illegal aliens in the country file personal income tax returns using the alternative numbers, contributing billions of dollars to federal coffers.
Mitchell Young | December 3, 2007, 4:07pm | #
I've grown immune to the name calling, and no longer get frustrated by the economic illiteracy (hint - trade is a perfect substitute for illegal immigration when the later is used to produce textiles in LA or strawberries in Oxnard and no externalities].
But really, the BS about ITIN's (taxpayer nubmers) and the supposed goodness of the illegal immigrants in filing taxes is too much. A few minutes googling revealed that (1) 8-12 million ITIN's are the total numbers issued as I figure it, that doesn't mean that that many illegals file each year (2) as near as I can make out, ITINs are issued to both legal and illegal residents. That includes high value foreign businessmen who conduct business in the US of A and finally (3) those filing with ITIN's are eligible for refunds
Here are some anecdotal stories (typical for the source, the LA Times) note the refunds being paid -- hmm, EITC anyone. Note the trivial amounts of SSN being paid. Anyone thinking that a $15/hr janitor with three kids in public schools is paying their way is on crack.
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http://www.icirr.org/stories/taxday.htm
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The IRS, which has issued more than 9.2 million tax identification numbers since 1996, does not ask whether immigrants are legal. [That's issued numbers, not illegals filing taxes]
....
Inside the office last week, Carmelo Santiago Hernandez signed his tax return and learned he would receive a $15 refund. Hernandez, an illegal immigrant, arrived from Mexico four years ago and works as a janitor. Last year, he said he earned just over $11,000. He paid about $700 toward Social Security and $160 to Medicare.
Hernandez, 28, decided to apply for an ITIN and file taxes after an uncle suggested it might increase his chances to become a legal resident someday. "You never lose hope," said Hernandez, who is married with three children.
Others say they are bound by a sense of duty.
Luis Vazquez, 26, was paid under the table as a day laborer most of last year. Last week, he arrived at H&R Block with documentation that he had earned about $3,500 — not much, he said, but he still wanted to comply with tax laws. He didn't have the means to pay the government anything, so he was relieved to discover he was owed a refund: $4. [under the table means no SSN guys]
"I want to do things how they should be done," said Vazquez, who crossed the border two years ago. "I'm here. The least I can do is demonstrate that I have good intentions … that I came to work."
Unlike Hernandez and Vazquez, who both filed for the first time this year, Santa Cruz, a dishwasher, has been filing tax returns for nearly a decade. He earned about $11,600 last year, paying roughly $720 toward Social Security and $170 to Medicare. He claimed his three children here as dependents and will receive a refund of about $890.
stupendousman | December 4, 2007, 3:45am | #
"...And, some people are paying less than the per capita spent than education, agreed?"
Yes.
"So, are you saying is that the only thing holding back our schools from generating an endless supply of Socratic Einsteinian Mozarts are immigrants? (either legal or illegal?) Or for that matter, poor people?"
No, I don't know where you got that impression.
My point is immigrants are, in general, low wage earners. If this is true then immigrant parents, in general, receive more education then they pay for. More immigrants equals more low wage earners with kids in need of education
which makes my taxes going up yet again. Illegal immigrants pay taxes, this is true, but not close to what someone in the middle income bracket does.
Even if more people create a larger economy not everything experiences the same buoyancy. Most free market advocates offer endless streams of statements but have little to say about the nitty gritty. How long does a change take, what would derail a change, what does the starting point need to look like, etc.
In the case of immigrants helping our economy grow I'm inclined to believe this does in fact happen. But economies aren't quantum particles- they don't just flip into a new energy state. There are growing pains when changes occur. Don't the new comers have an ethical responsibility to those already here who will face the most turmoil? One issue is the fact that those already here are in many cases subsidizing the new comers. The argument (at least on this site) always puts the onus on the existing citizens.