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More Grist for the Immigration Debate
Posted by: Jon Henke on Monday, April 03, 2006

I've been the resident skeptic on the illegal immigration and border issue, with Dale and McQ emphasizing, respectively, the sociopolitical and welfare state/security problems with illegal immigration. I want to note, however, that I don't disagree with them so much as I'm just skeptical that (1) we really understand the nature and degree of the problem, and that (2) we can find a solution that doesn't create more problems than it solves.

This Tony Snow column makes an interesting addition to our data. Some highlights...
  • "Princeton University sociologist Douglas S. Massey reports that 62 percent of illegal immigrants pay income taxes (via withholding) and 66 percent contribute to Social Security."


  • "Forbes magazine notes that Mexican illegals aren't clogging up the social-services system: only 5 percent receive food stamps or unemployment assistance; 10 percent send kids to public schools."


  • Heather McDonald discovered that illegal immigrants in 2004 accounted for 95 percent of all outstanding homicide warrants in Los Angeles and two-thirds of unserved felony warrants. [...] On the other hand, the most comprehensive survey to date of national crime data concludes, "In the small number of studies providing empirical evidence, immigrants are generally less involved in crime than similarly situated groups, despite the wealth of prominent criminological theories that provide good reasons why this should not be the case."

I didn't know a great deal of that, and I'm especially intrigued by the notion that payroll taxes are withheld from the wages of illegal immigrants. Presumably, this is done when illegal immigrants provide fake documents and employers don't know better — or do know better and don't care. That's interesting, because it offers evidence for the argument that the contributions of illegal immigration goes a long way towards covering the costs of illegal immigration.

With that in mind, I am intrigued by an idea that reader "CaliforniaBuckeye" left in our comments recently...
Instead of immediately criminalizing the hiring of illegal immigrants, why don’t we try using the tax code first? Change the tax code to require employers prove that each employee is legally eligible to work in the US before the employer is permitted to deduct as business expenses the wages and benefits paid to that worker.

Employers could still hire illegal workers but their increased taxes would help internalize social costs of their actions.
This strikes me as an economically efficient and legally equitable method of addressing the uneven playing field that incentivizes illegal labor, and it does so without undue burden on either immigrants or Americans. It simply requires transparency.

This strikes me as an eminently enforceable compromise.
 
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Jon:

I thought you libertarian-ish types were supposed to be against using the tax code to further social policy?

As far as the idea itself, I would expect business groups to be as against this as much as they are against deporting the illegals, as denying employers a tax deduction for workers lacking documentation would likewise raise the cost of labor...
 
Written By: steve sturm
URL: http://thoughtsonline.blogspot.com/
I was under the impression that the number of illegal aliens was at best a guess and approxmated 11 million. How then can the Princeton professor come up with numbers as specific as 62% and 66%?
 
Written By: tom scott
URL: http://
1. Statistics Lie Equally

2. Social Security Tax is a Red Herring since these latinos will become citizens and a major voting block and somehow collect their old age checks. So, you can’t use it to balance the services they use.

3. Most new above and beyond the usual migratory farm workers are hear due to the Real Estate Boom that is now subsiding. Most will be employed soon and looking for assistance with housing, food, and medical.

4. It is NOT CONCIEVABLE that you grant them amnesty and then when they lose their jobs due to the Housing Cycle turning that they would give up that new citizenship and go home even though they have no work.
 
Written By: Johnn
URL: http://
Just a contrarian note:
As an small business owner, because the government refuses to secure the borders I am suddenly supposed to have the resources, legal counsel, time, money, and energy to diligently investigate whether a person working for me is a legal citizen, or not... Sorry, Charlie. I don’t have the time, money, etc... The employees supply me with a SSN, I withold the legally required amounts, provide my employer contribution to those amounts and forward the greenbacks to the government... End of story...

It is amazing how the lazy people of this country always find that it is someone elses responsibilty to do THEIR dirty work for them...

Dennis
 
Written By: Dennis
URL: http://
Just a contrarian note:
As an small business owner, because the government refuses to secure the borders I am suddenly supposed to have the resources, legal counsel, time, money, and energy to diligently investigate whether a person working for me is a legal citizen, or not... Sorry, Charlie. I don’t have the time, money, etc... The employees supply me with a SSN, I withold the legally required amounts, provide my employer contribution,actually a penalty on me for having been so cheeky as to remove these folks from the welfare roles, to those amounts and forward the greenbacks to the government... End of story...

It is amazing how the lazy people of this country through their elected congress critters always find that it is someone elses responsibilty to do THEIR dirty work for them...

Dennis
 
Written By: Dennis
URL: http://
As an small business owner, because the government refuses to secure the borders I am suddenly supposed to have the resources, legal counsel, time, money, and energy to diligently investigate whether a person working for me is a legal citizen, or not...
It won’t require any resources at all. If you hire a worker, you already take their SSN — or a work ID number — in order to assign their SS taxes. The problem, now, is that a lot of those numbers are fake.

Well, fine. If you want to keep employing those people, you may. The only difference would be that wages paid to fake SSNs would not be deductible. If you’re interested, all you’d have to do is ask whether a number is legit.
 
Written By: Jon Henke
URL: http://www.QandO.net
My own take is that strict border enforcement is essential as the first thing. Stopping the physical flow of bodies by 95% in 2 years is a stretch goal. After that, forcing all the illegals out is not of immediate urgency. Let them stay but continue to force it underground and the tax proposal above is one way to apply pressure without the stigma of dragging illegals out of their beds at night to deport them or of closing down going businesses.

No "guest worker" programs either as they have never worked. Look at the abuses of the H1B program - horror stories are plentiful here in Silicon Valley of how that has gone wrong, as was predictable.

Eventually, illegals will either return, find a way to become legal, or die. After all, it took 50 years of bad policy and hypocritical enforcement to get us into today’s situation. I don’t expect a resolution overnight.
 
Written By: Whitehall
URL: http://
If only 62% pay income taxes, that means that 38% do not pay income taxes. Of course as Tom Scott mentioned, these numbers are probably worthless. These are, after all, people who "live in the shadows" as our president has said. There are arguments about the actual number of people counted in the census, so I rather doubt that there are any accurate statistics on illegal immigrants.
 
Written By: timactual
URL: http://

 
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