Tax Analysts Blog

Immigrants Are Good for Us

Posted on Jul 17, 2013

As I write, there is a contentious, heated debate in the U.S. Congress about immigration reform. Some political leaders, mostly Republicans, don’t like providing illegal immigrants with a path to citizenship. Their argument is that people who came here illegally are being rewarded for breaking the law. Still others argue that illegal immigrants take American jobs and welfare and contribute nothing but crime. I don’t buy any of that. Immigrants have been the subject of political attack since the beginning of the Republic. Jews, Italians, Irish, Germans, Chinese have all been accused of stealing some mythical American birthright. In my experience, immigrants (whether they come on a 747 from Mumbai or cross the Rio Grande on foot) come here to work and live free.

There are many reasons for liberalizing immigration rules – and dealing with those who came here illegally. The most important reason is that immigration reform will lead to not only more productivity but more tax revenue. Selfishly perhaps, I want immigrants to contribute to Social Security and Medicare. The version of immigration reform passed by the Senate will, according the CBO, reduce the deficit by almost $200 billion over 20 years.

But the issue is important at the state level as well. My friends at the Institute on Taxation and Economic Policy published a report recently that shows that undocumented immigrants (the politically correct term for people who are here illegally) currently pay $10 billion in state and local taxes. This is, of course, contrary to ignorant claims that illegal immigrants don’t pay taxes. They pay sales taxes, excise taxes, and property taxes (through their rent). With federal reform, they would pay an additional $2 billion a year in state and local taxes. According to ITEP, the extra $2 billion will come from additional income taxes. Currently a lot of people who sneak in are working under the proverbial table.

Most immigrants come here and work at jobs that you would not want your children to take. There are a lot of them here without papers. Since we are not going to round them all up and deport them, doesn’t it make sense to have them contributing to society’s efforts as much as they can? Paying more taxes (and contributing to my Social Security) is a good start.

Read Comments (2)

Eric KapensteinJul 16, 2013

I have a problem with the Social Security and Medicare argument, which many
make, because it's a short-term boon and a long-term bust. After all, the
average recipient of those programs receive far more in federal benefits than
they'd ever put into the system via their taxes. That aspect of reform only
exacerbates lont-term debt problems for the federal government.

Note - That's not to say that the programs wouldn't help people who lived and
worked in the U.S. illegally for decades... only that it shouldn't be cited as
budgetarily beneficial.

antoni kozubovAug 5, 2013

If this is right, why not bring in all of the Earth's 7 plus billion? Where do
we stop?

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