Legalize Aliens to Collect More Taxes?



moneyThe Sun Sentinel in Florida had a story on a new report by the Institute on Taxation and Economic Policy that found that tax revenues would increase if illegal aliens were granted amnesty. The study estimated that the current tax compliance rate for illegal aliens was 7.3 percent of income and it would increase to 10 percent if amnesty were adopted.

ITEP has worked with amnesty proponents for several years providing studies touting the estimated economic benefit and tax contributions of illegal alien workers at the state level. This new study is another effort to gain support for an amnesty. Logically, legal status would lessen the ability of unscrupulous employers to pay workers off the books. That suggests that more income taxes would be collected through employer withholding. However, that would result in an increase in collection only if the worker were earning enough to have a tax liability, and it could result in a negative tax collection if amnestied workers were able to draw on the Earned Income Tax Credit.

The major fallacy with the ITEP finding is that the supposed tax benefit would occur as well if the illegal alien worker were deported and replaced by a legal worker. Further, if the deportation of the illegal alien worker resulted in a tighter job market, it is likely that the wages of the legal worker would rise, and that would increase tax collection even further.

In FAIR’s previous analysis of the findings of ITEP, we have faulted the assumptions that the Institute has used to estimate tax collections – mostly sales taxes – from illegal aliens. That analysis applies as well to the current starting point estimate of a tax compliance rate of 7.3 percent.  

About Author

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Jack, who joined FAIR’s National Board of Advisors in 2017, is a retired U.S. diplomat with consular experience. He has testified before the U.S. Congress, U.S. Civil Rights Commission, and U.S. Commission on Immigration Reform and has authored studies of immigration issues. His national and international print, TV, and talk radio experience is extensive (including in Spanish).

7 Comments

  1. avatar

    Too bad there isn’t a way to convince liberals what would happen if they got their way and let the illegals flood in, without putting everyone in this great country in jeopardy. They tend to think that illegals are just “good, hard-working, poor people” that wants a better life. If you’re Christian and a conservative you are worse in their eyes than the “poor immigrants”.

  2. avatar

    I’ve never seen an jobless-illegal. I do understand they have an agenda….”when in numbers they can navigate the direction of the country.”

    Syria had possible reasons for contesting the population of combatants who later turned out to be the BAD GUYS ISIS. Mexico battled it’s street population too who later moved to the US; now they bring their organized crime to American soil.

    Years ago , anyone would notice an illegal working in a “McDonalds or Burger King.” Today “Jose'” is the manager and only hires illegals.

    Like seeds, they spread and accumulate in majority numbers and use our own words against red-blooded Americans.
    “MAJORITY RULES.” When it comes to protesting on the stree for higher wages, the only folk that will benefit are those illegals working in those jobs. (neat trick).

    USA Boxing is chaired by a fellow who has a strict love-affair for illegals and latinos; he sells Boxing equipment world-wide thru his Ringside Inc. business while serving the role of United States of America Olympic Boxing program President for our great country. EVERLAST AND TITLE BOXING will never be considered for a bid to use thier product in the next Olympic games while Ringside owner/USA olmpic Boxing president chairs the olympic commitee.

    For back-dorr favors , those that buy the most product take a set within USA boxing today. Those are predominently illegals.

    How will the complextion of the USA Boxing team look next Olympics , especially opening the door to Cubans and Latin countries. ( just like our national baseball team, noting but illegals)

    They broke the first law, “STOP! NO TRESPASSING” They should not be allowed in country setup boxing clubs to make money under the radar tax-free within our civilian population, they should not be allowed to join our sports programs that will qualify thier illegal kids for the next USA olympics either by being born here after their families stole their way into our nation (Genuine american kids who have paid taxes are denied the opportunities to represent thier own country). Latino atheletes rob our nations pride and expertise, they always gravitate to the “Oscar Dela Hoya” syndrome…. make stardom and sponsor mor of their own latinos into the US on Television “Friday Night fights.”

    Logically, Illegals increase the ability of unscrupulous employers to seek ways under the table to better their business.

    -b

  3. avatar
    David Smith on

    Since 2002, the United States has created about 9 million new jobs. It has also imported about 18 million immigrants, both legal and illegal. About 90% of new jobs have gone to immigrants. You don’t need to be a rocket scientist to figure out why average wages have flat-lined or declined.

  4. avatar

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  5. avatar

    They sponge more off U.S. taxpayers than they pay, so is there any intelligence at ITEP to begin with?

  6. avatar

    The governor of Illinois has informed the city of Chicago that the state has it’s own economic problems and that they will not be bailing out the city. Hey, this is what Chicago brought on itself. The entire political establishment of that city has spent years encouraging illegals to settle there and telling them the city will make them eligible for all kinds of welfare programs.

    It’s said be careful what you ask for, you may get it. Chicago asked for it, they got it, and now it’s everyone else’s duty to bail them out? Don’t think so. Enjoy the mess you created.