taxes, typically because their incomes are lower than the combination of their allowed standard deduction and their personal and dependent exemptions, or because they receive substantial rebates via refundable tax credits”(65 [emphasis added]).
Source: Fair—The Fiscal Burden of Illegal Immigration on US Taxpayers (2017)
What you see
Granting legal status to all illegal immigrants in the United States as part of a comprehensive immigration reform and allowing them to work legally would increase their state and local tax contributions by an estimated $2.18 billion a year. Their nationwide effective state and local tax rate would increase to 8.6 percent
(Undocumented Immigrants’ State & Local Tax Contributions, Institute on Taxation and Economic Policy).
The complete picture
Taxes collected from illegal aliens offset fiscal outlays and, therefore, must be included in any examination of the cost of illegal immigration. However, illegal alien apologists frequently cite the allegedly large tax payments made by illegal aliens as a justification for their unlawful presence and as a basis for offering them permanent legal status through a new amnesty, similar to the one enacted in 1986. The argument is nothing more than a red herring. In fact, in November 2016, the Heritage Foundation estimated that an amnesty would require an immediate tax increase of $1.29 trillion to finance the infrastructure, school, welfare, and other public costs associated with illegal aliens
(Source: Fair—The Fiscal Burden of Illegal Immigration on US Taxpayers (2017))
I must digress for a moment. During my endless research, I have come across more than one heated response from Cato Institute on fair articles, and the response to the above study is no exception.
In their estimation of illegal immigration on property values, I believe they take estimates of statistical evaluation to a whole new level.
And I quote as follows:
FAIR also undercounts the tax revenue generated by illegal immigrants. The first and most egregious undercount is that they ignore how increased housing demand raises the value of all real estate per county which also raises property tax revenue. According to research by economist Jacob Vigdor, each immigrant raises the value of all homes in their county by 11.5 cents. The average immigrant also lives in a county with 800,000 housing units. The locations of illegal and legal immigrants are closely correlated so we can assume that the typical illegal immigrant also lives in a county with 800,000 housing units. If the typical illegal immigrant increases the value of all housing unit prices by 11.5 cents, then illegal immigrants increase nationwide housing values by about $1 trillion. Using the 1.15 percent average annual property tax rate, the increase in housing values created by illegal immigrants results in $12.2 billion in additional tax revenue. Adjusting for the extra property taxes paid by property owners as a result of illegal immigration boosting housing values increases tax revenue by $11.2 billion over FAIR’s estimate.
This method seems to make a lot of assumptions at multiple levels and appears to be taken the same level of statistical manipulation as they accuse the Fair.org.
To be fair, they do come up with a revision of between 3.3 billion to 15.6 billion in fiscal costs. That’s quite the spread. Not to mention, the calculations seem to be taken that each immigrant has their own residence, which is not practical. One would need to use households, not individuals, given that the average undocumented household is 4 (Pew Research). Unauthorized immigrants live in 5.2 million U.S. households that include a total of 20.2 million adults and children.
And in the end, they make the following statement: “This does not mean that the negative fiscal impact of illegal immigration is $3.3 to $15.6 billion annually. It merely means that using the correct numbers massively reduces their cost estimate.”
So cutting to the bottom line, this statistical manipulation used by both sides comes to this. Illegal immigration is a fiscal drain on the system.
As we end this segment, it is best put by the Center for Immigration Studies in an article from October 28 titled “Enforcing Immigration Law Is Cost Effective”:
The reason illegal immigrants are unambiguously a net fiscal drain is that less-educated people, native-born or immigrant, earn on average modest wages and as a result they tend to make modest tax contributions, while needing significant social services. As we pointed out in our prior study, research by the Center for Immigration Studies, the Pew Research Center, the Heritage Foundation, and others have all found that a very large share of illegal immigrants have relatively few years of schooling—most have not completed high school or have only a high school education. The fiscal drain illegal immigrants create is not because they are all lazy and on welfare, nor it simply because they often work off the books and don’t pay taxes. Rather they tend to earn wages commensurate with their education levels and, as result, they typically have low incomes on average, though there are individual exceptions. Those with low incomes as a group, regardless of legal status, use more in public services than they pay in taxes. It’s why cities and states worry so much about losing their middle- and upper-income tax base. It is middle- and upper-income residents who pay most of the taxes, which does not describe the average illegal immigrant.
ITINs (individual tax identification numbers)
The ITIN program was created by the IRS in July 1996 so that foreign nationals and other individuals who are not eligible for a social security number (SSN) can pay the taxes they are legally required to pay.
The application process is designed to facilitate tax payment, and the fact that the IRS does not share applicants’ private information with immigration enforcement agencies is key to tax compliance.
What you see
An article from the American Prospect titled “Denying the Child Credit to Undocumented Children” was released on June 28, 2018.
Its focus is a little-noticed provision in the Republican tax reform that stripped billions in tax benefits from an estimated one million mostly low-income undocumented children residing in the United States.
It goes on and states this:
Currently, unauthorized immigrants are able to claim the credit by applying for a nine-digit Individual Taxpayer Identification Number, or ITIN, which allows them to file state and federal tax returns, even without a Social Security number. The new requirement, which will go into effect next year, will render ineligible roughly one million undocumented children, according to a Center on Budget and Policy Priorities analysis of data from the Pew Hispanic Center.
The change threatens to inflict greater poverty on a mostly low-income working population that depends heavily on such credits. In 2013 alone, some 4.4 million tax returns were filed using ITINs, claiming child tax credits worth $6 billion, according to a report on refundable tax credits by the Government Accountability Office (GAO). Almost a third of ITIN filers claiming child tax credits that year had incomes of less than $40,000. Most ITIN-filers are undocumented.
It added that “eliminating all access to tax benefits for undocumented immigrants has long sat atop the wish list of many conservatives, who have vilified undocumented immigrants and accused them of large-scale tax fraud. But the Republicans have displayed a studied disinterest in the large-scale tax frauds by the rich, which will only be intensified by the Tax Act.”
That’s a pretty dark picture, but there’s some facts that seem to be neglected in this rendition of illegal immigrants being victimized.
The complete story
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