Are a “Fair Share” of Taxes Being Paid by Immigrants Who Are in the United States Illegally?

By ProCon
The United States General Accounting Office (GAO) released a July 1995 report titled “Illegal Aliens National Net Cost Estimates Vary Widely,” comparing major findings regarding the economic costs and benefits of undocumented immigrants, that stated:

“Recognizing the difficulties inherent in collecting better data on a population with an incentive to keep its status hidden from government officials, any future studies would benefit from focusing on some of the key characteristics of the illegal alien population…

Illegal aliens generate revenues as well as costs; these revenues offset some of the costs that governments incur. Research studies indicate that many illegal aliens pay taxes, including federal and state income taxes; Social Security tax; and sales, gasoline, and property taxes. However, researchers disagree on the amount of revenues illegal aliens generate and the extent to which these revenues offset government costs for benefits and services.”

Pros(yes)

Michael Greenstone, PhD, and Adam Looney, PhD, in their Sep. 2010 Hamilton Project Report, “Ten Economic Facts about Immigration, available at www.brookings.edu, stated:
“Taxes paid by immigrants and their children—both legal and unauthorized—exceed the costs of the services they use… Many 
government expenses related to immigrants are associated with their children. From a budgetary perspective, however, the children of immigrants are just like other American children… Both the immigrant children and children of U.S.-born citizens are expensive when they are young because of the costs of investing in children’s education and health. Those expenses, however, are paid back through taxes received over a lifetime of work. The consensus of the economics literature is that the taxes paid by immigrants and their descendants exceed the benefits they receive—that on balance they are a net positive for the federal budget.”

 

Francine J. Lipman, MBA, LLM, Professor of Law at Chapman University School of Law, in the Spring 2006 Harvard Latino Law Review article “Taxing Undocumented Immigrants: Separate, Unequal and Without Representation,” wrote:

“[U]ndocumenteds actually contribute more to public coffers in taxes than they cost in social services…

[E]ach year undocumented immigrants add billions of dollars in sales, excise, property, income and payroll taxes, including Social Security, Medicare and unemployment taxes, to federal, state and local coffers. Hundreds of thousands of undocumented immigrants go out of their way to file annual federal and state income tax returns.

Yet undocumented immigrants are barred from almost all government benefits…Generally, the only benefits federally required for undocumented immigrants are emergency medical care, subject to financial and category eligibility, and elementary and secondary public education. Many undocumented immigrants will not even access these few critical government services because of their ever-present fear of government officials and deportation.

Undocumented immigrants living in the United States are subject to the same income tax laws as documented immigrants and U.S. citizens. However, because of their status most unauthorized workers pay a higher effective tax rate than similarly situated documented or U.S. citizens. Yet, these workers and their families use fewer government services than similarly situated documented immigrants or U.S. citizens…As a result, undocumented immigrants provide a fiscal windfall and may be the most fiscally beneficial of all immigrants.”

 

Cons(no)

Robert Rector, MA, and Jason Richwine, PhD, in their May 6, 2013 Heritage Foundation report, “The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer,” available at www.heritage.org, stated

“Children in unlawful immigrant households receive heavily subsidized public education. Many unlawful immigrants have U.S.-born children; these children are currently eligible for the full range of government welfare and medical benefits. And, of course, when unlawful immigrants live in a community, they use roads, parks, sewers, police, and fire protection; these services must expand to cover the added population or there will be ‘congestion’ effects that lead to a decline in service quality.

In 2010, the average unlawful immigrant household received around $24,721 in government benefits and services while paying some $10,334 in taxes. This generated an average annual fiscal deficit (benefits received minus taxes paid) of around $14,387 per household. This cost had to be borne by U.S. taxpayers.”

 

Randy Alcorn, Senior Writing Fellow for Californians for Population Stabilization (CAPS), in the Sep. 2007 CAPS online article “A Presumption That Taxes Probability,” wrote:

“While it is empirically true that illegal immigrants are hard working, the presumption that they pay their fair share of taxes is not as visibly verifiable or probable…

Although illegal immigrants pay billions of dollars in Social Security taxes, Social Security taxes are not the main source of revenue for state and federal government—income taxes are…[W]hile illegal immigrant workers have less opportunity to avoid Social Security tax withholdings, they do have opportunity and motivation to avoid income tax withholdings.

So, even if an illegal immigrant worker, who in order to reduce tax withholdings had claimed exemptions for dependents living in Mexico, decided to file tax returns, he or she would likely have a larger tax liability than expected. What are the odds that he or she would come up with the money to pay the additional tax bill after the IRS denied the non-qualifying exemptions? And, if the illegal alien falsely claimed that the dependents did live in the U.S., he or she would still be evading his or her fair share of taxes…

By evading taxes, benefiting from taxpayer provided services, and undermining the wage scale of legal workers, it is highly unlikely that illegal immigrants are a net benefit to most Americans.”

 

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