Tuesday, April 15, 2008

Illegal immigrants pay billions in taxes

Don't have time to read the entire article? Here is my favorite quote, from the last line, "If anything we need more immigrants coming into the country, not less, especially with the baby boomers retiring..." Read on, republicans....


NASHVILLE, Tennessee (AP) -- The tax system collects its due, even from a class of workers with little likelihood of claiming a refund and no hope of drawing a Social Security check.

Martha Pantoja helps Jose Aguilera prepare his income taxes at a community center in Nashville, Tennessee.

Illegal immigrants are paying taxes to Uncle Sam, experts agree. Just how much they pay is hard to determine because the federal government doesn't fully tally it.

But the latest figures available indicate it will amount to billions of dollars in federal income, Social Security and Medicare taxes this year. One rough estimate puts the amount of Social Security taxes alone at around $9 billion per year.

Paycheck withholding collects much of the federal tax from illegal workers, just as it does for legal workers.

The Internal Revenue Service doesn't track a worker's immigration status, yet many illegal immigrants fearful of deportation won't risk the government attention that will come from filing a return even if they might qualify for a refund. Economist William Ford of Middle Tennessee State University says there are no firm figures on how many taxpayers are in that situation.

"The real question is how many of them pay more than they owe. There are undoubtedly hundreds of thousands of people in that situation," Ford said.

But some illegal immigrants choose to file taxes and write a check come April 15, using an alternative to the Social Security number offered by the IRS so it can collect income tax from foreign workers.

"It's a mistake to think that no illegal immigrants pay taxes. They definitely do," said Martha Pantoja, who has been helping Hispanic immigrants this tax season as an IRS-certified volunteer tax preparer for the nonprofit Nashville Wealth Building Coalition.

Among those she has assisted is Eric Jimenez, a self-employed handyman who has worked in Nashville for several years. He feels obliged to pay taxes -- even though, as Pantoja said, "nothing would happen" to him if he did not.

"I have an idea, a mentality, that to be a good citizen you have to pay taxes," he said. "Also, I'm conscious of the fact that the money we pay in taxes supports the schools and all the public services."

Pantoja said she has helped a number of construction workers who, because they are classified as independent contractors by their employers and have no taxes withheld, owe big tax bills come April. Beyond income tax, they have to pay the full Social Security and Medicare taxes due.

The Social Security Administration estimates that about three-quarters of illegal workers pay taxes that contribute to the overall solvency of Social Security and Medicare.

The agency estimates that for 2005, the last year for which figures are available, about $9 billion in taxes was paid on about $75 billion in wages from people who filed W2 forms with incorrect or mismatched data, which would include illegal immigrants who drew paychecks under fake names and Social Security numbers.

Spokesman Mark Hinkle says Social Security does not know how much of the $9 billion can be attributed to illegal immigrants. The number is certainly not 100 percent, but a significant portion probably comes from taxes paid by illegal immigrants.

Nine billion dollars sounds like a lot of money, and it is, but it is only about 1.5 percent of the total $593 billion paid into Social Security in 2005.

The impact on Social Security is significant, though, because most of that money is never claimed by the people who pay it but instead helps cover retirement checks to legal workers.

Federal law prohibits paying Social Security to illegal immigrants, but the administration factors in both legal and illegal immigration when projecting the trust fund's long-term solvency.

This is especially important as the 78 million-member baby boom generation begins to leave the work force and draw Social Security checks.

"Overall, any type of immigration is a net positive to Social Security. The more people working and paying into the system, the better," Hinkle said. "It does help the system remain solvent."

The Social Security Administration drew from census and Immigration and Customs Enforcement data in 2007 to project the effects of higher and lower immigration patterns.

If net immigration is high at 1.3 million people a year, the SSA's combined trust fund would be exhausted in 2043. But the fund runs out four years earlier if annual net immigration amounts to about half that -- 472,500 legal immigrants and 250,000 illegal immigrants.

The Internal Revenue Service doesn't have an estimate of how many illegal immigrants pay income tax.

But one indicator is the 9 million W-2 forms with mismatched names and Social Security numbers it received in 2004. The IRS said the W-2 forms with invalid Social Security numbers reported about $53 billion in wages and about three-fourths of that, $40 billion in wages, had taxes withheld.

The IRS also has been issuing Individual Taxpayer Identification Numbers, or ITINs, for 12 years to foreigners without a Social Security number. It's believed that many workers who seek the ITINs are in the country illegally, and the IRS reported that there were 2.5 million tax returns filed with an ITIN in 2004.

In 2006, then IRS Commission Mark Everson told Congress that "many illegal aliens, utilizing ITINs, have been reporting tax liability to the tune of almost $50 billion from 1996 to 2003."

An IRS spokesman said more recent figures aren't available.

The Social Security and Medicare taxes from mismatched W2s for the same period was $41.4 billion, Hinkle said.

That adds up to roughly $90 billion in federal taxes during they eight-year period.

The IRS defends the ITIN system, despite criticism that some illegal immigrants have used it to open bank accounts, get mortgages and establish a record of residency and taxpaying they hope might someday lead to legal status.

"The ITIN program is bringing taxpayers into the system," Everson told Congress.

Middle Tennessee State University economics professor William Ford, who has studied taxes and immigration, says a majority of economists agree that illegal immigrants are a net benefit for the U.S. economy.

He said the tax contributions from illegal immigrants, including sales taxes, property taxes and excise taxes (such as the gas tax), are significant.

He calculates that illegal immigrants contributed $428 billion dollars to the nation's $13.6 trillion gross domestic product in 2006. That number assumes illegal immigrants are 30 percent less productive than other workers.

"If anything we need more immigrants coming into the country, not less, especially with the baby boomers retiring," he said.

7 comments:

Tricia and Michael said...

The problem that I have seen is that ILLEGAL immigrants do pay taxes because they have to. When it comes to declaring the number of dependents on their W-2 form they claim as many dependents as possible. By doing so the government takes the minimum amount of taxes from their paycheck. When April 15 comes they owe quite a bit of taxes and do they pay, no.

There was a quote that "the law tears husband and wives apart". As it should!!!! If they were to come to this country legally there would be no problems! I can't stand the double standard Mexico has. They get upset when we put up a fuss about having their people come to our country because what happens is those immigrants come here and send money back to their family in Mexico. Thats fine but the problem is Mexico is making money from immigrants crossing over. However Mexico has a problem and even shoots illegal immigrants that cross their southern border.

Also not to forget the cost of medical treatment and education. Hospitals take a huge hit for all the free medical treatment that they have to provide for illegal immigrants who can't pay. They in turn pass that cost on to us. I have no problems providing treatment to those who are hurt. My problem is stop them from coming over ILLEGALLY!!!! We can have a program where they come over and work here, and pay taxes, and go back to Mexico.

Again I have no problem with immigrants coming over legally but they should no expect us to go out of our way to help them if they come over illegally. Its against the law. When someone breaks the law here they go to jail. We aren't sending them to jail but again don't expect help if your breaking the law.

Sara Allsop said...

Oh, I have so many problems with your issues. Oh so many. To your first paragraph. Yes, there are Mexicans who are out to get whatever they can from the US gov. There are Americans who are out to get whatever they can from the US government too. It's not even seen as a real crime for people to cheat on their taxes here, people laugh it off, of course some Mexicans are going to do the same. And if it comes down to them having 100 dollars to send home to support an entire family, often wife, kids, or parents, then, yeah, they are more likely to cheat a little bit to send more money home. (My issue is that just because I got the random lucky drawing to be born in the US legally, I just can't look at these people who got the unlucky birth location and fault them for trying to get a tenth of the opportunities that we get for free.)

And yes, I'm sure Mexico has a (if I may say so) sh*#*y Goverment. That's no surprise, it's filled with double standards and corruption. It always has been. Does that mean we can use that as an excuse for out lack of compassion? I would like to think that the US could be an example to other countries with our compassion and desire to help others.

You talk about the programs we have where they can come over and work legally and then pay taxes and go home...how many people do you think that applies to? Don't you think everyone and their sister would sign up for that rather than pay a coyote $3,000 (yes, that's the going rate for an illegal border crossing nowadays) to cross the hot, dangerous desert?

I'm going to say something that I have been thinking a lot and keeping to myself. Something that I feel very strongly...however it might be offensive. Read on, if you dare...

I thought that the whole point of being Christian was a belief that everyone was a child of God? That these people are our brothers and sisters? If my brother or sister couldn't afford to educate their children, if they couldn't afford health care, if they wanted the same basic luxuries I wouldn't want to do without, like a tv, a radio, a camera, much less the basic necessities of life, then wouldn't I want to help them get those things?

It just seems so wrong to me that these people, just because they were born fifty miles south of a line that two governments drew out years ago, is the difference between--lets face it--unlimited possibilities and almost certain poverty.

Yeah immigration!

Tricia and Michael said...

Okay, we now that we have started this wonderful conversation I might as well throw my rebutal to what you said. You ready?

First and foremost to touch on your issue of being a good christian. I feel that we all need to be a good christians in our lives. Part of being a good christian is obeying the law. "We believe in obeying the law of the land" states an Article of Faith. So if immigrants are coming to this country illegally they are not obeying the law of the land. There is a reason why it is against the law for people to come to this country illegally. Those that cross illegally, we don't know their history or background. They could be murders, rapists, drug dealers, and/or terrorists. They could have diseases or sickness that could affect us or kill many.

And what about all the people that are trying to get here to our country legally? Are we to say to them sorry but you got screwed! Thanks for all the large fees and money you paid but you should have come here illegally instead of doing the right thing. Even mexicans that came here legally, the correct way, who were in the same situation as those crossing illegally agree that illegal immigration needs to be stopped.

We as a nation do take care of those you are in need. (Medicare, Welfare System, and many more organizations). But if we were to open our borders and allow anyone and everyone to come. Who would come here? Well it would be the poor and needy. The concern is then who would be responsible to helping them out. The taxpayers would have to cover that bill. That cost would be huge. I do not want my taxes raised for that purpose. Why do I need to pay more money out of my pocket? I want to help people out on my own accord. I don't trust the government programs because they don't work. I'll give my money to help the poor and need to private organizations with a proven track record.

Also there is a problem in this country that people are becoming too dependent on the government and its programs. People are not taking responsibility for themselves. There are people that are getting pregnant so that they can receive more money from the government in welfare checks. That makes me sick.

Here are a few facts on the cost of immigration.

The Federation for American Immigration Reform notes that:

• Between 40 and 50 percent of wage-loss among low-skilled Americans is due to the immigration of low-skilled workers.

• An estimated 1,880,000 American workers are displaced from their jobs every year by immigration

• The cost for providing welfare and assistance to these Americans is over $15 billion a year."

• The net annual cost of immigration has been estimated at between $67 and $87 billion a year.

The National Research Council, part of the National Academy of Sciences, found that:

• The net fiscal drain on American taxpayers is between $166 and $226 a year per native household.

• Even studies claiming some modest overall gain for the economy from immigration ($1 to $10 billion a year) have found that it is outweighed by the fiscal cost ($15 to $20 billion a year) to native taxpayers."

• In 1997 that the average immigrant without a high school education imposes a net fiscal burden on public coffers of $89,000 during the course of his or her lifetime.

• Illegal aliens have cost billions of taxpayer-funded dollars for medical services.

• Dozens of hospitals in Texas, New Mexico Arizona, and California, have been forced to close or face bankruptcy because of federally-mandated programs requiring free emergency room services to illegal aliens.

• Taxpayers pay half-a-billion dollars per year incarcerating illegal alien criminals.

You can see the cost illegal immigration is costing us.

For those that are here illegally, we need them to come forward and register and pay back taxes if they owe any or a fee. One idea that was thrown out is have them serve two years in the military and then they can stay. Once they have paid their service, great lets help them in anyway possible to get on their feet. If they don't want to come forward then, I say we need to deport them back to where they came from. We need to get with Mexico and help them take care of their own poor and needy. But that day will never come. Then why is it that we have to care for them here in the United States. I'd be more than willing to do whatever I can to help them in their own country.

I'll leave it at that and look forward to your reply, sis!! Hope things are going good for you with school. Talk to you later!

Sara Allsop said...

Ok, here it comes.....

I want to you answer this question right now. If the law came between you and your family getting enough to eat, if you couldn't educate your children and your mother and father couldn't get basic medicine, if your nieces and nephews and brothers and sisters were going to bed hungry on a regular basis, and you couldn't pay for a hospital visit when your wife gave birth, would you break the law? Would you cross borders illegally so that you could get a job and work to feed and clothe and medicate your family? And if you say no to that, then you're a big liar and I don't believe you.

That's what bothers me so much about this affair. We sit in our warm soft chairs, making our twenty dollars an hour and piss and moan about the 200 dollars it costs us per year to deal with these illegal aliens. What is that? Ten or twenty hours of work for most people?

Ok, now on to refuting your points.

You say that the people coming into America could be murderers, they could be sick, as though we don't have any of that. And I find it funny that you would worry about them accidentally bringing over some imaginary disease, when we (yes, every single one of us) are still profiting from the horrible acts committed against the Native Americans, including giving them blankets purposefully exposed to small pox.

And you think the people that came here legally got screwed? That they don't get anything out of the fact that they didn't have to sit in a life raft for two days to get here? That they can get jobs that actually pay minimum wage? That they can go to the police when they have problems? If I ever found a Mexican who was here legally, holding a grudge against those here illegally, I'd disagree with them just as much as I do with citizens who are against illegals.

Of course the poor and needy would come here! That used to be the whole point of the USA!

"Give me your tired, your poor,
Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"

I'd like to think that I still live in a country that believes in that. I don't think I do, but it would be nice to think that.

And there isn't much I can say about your facts and figures, because everyone is going to get different facts from where they look, I found mine from CNN, you found yours from the Federation for American Immigration Reform...my source seems a little less baised, but whose counting?

And the last one, that hospitals have closed down because they have to provide emergency room care to illegals!?!?!?!! Holy crap, are you saying if someone comes in bleeding to death, a hospital is supposed to check their visa status? Are you kidding me? It's the EMERGENCY ROOM!

But before anything else, because we could go back and forth all year long on the issues, the facts and figures, the numbers, I want an answer to the first question.

Also, things are ok at school, I'm a little tired of writing papers and studying, but I think I have less than a month left. I'm excited to start my new job. Are you guys going to visit WI this summer? That'd be cool.

Tricia and Michael said...

My response. If I was in the before mentioned situation would I try and come to the U.S.? Yes I would but if I got caught, would i expect that they would let me stay. No. Everyone that crosses the border knows that if they get caught they will be deported back to Mexico. Also there are programs that will help the poor in Mexico as well. It is not as 'third world' as you think. Also there are numerous private organizations and churches that help out many people in need currently in Mexico. And are you saying a women that is pregnant and is giving birth will not be helped if she goes to a hospital? I don't think so. The situation that you mentioned is obviously the worst case secenario. And are you saying that the only people that cross that border are those people that are in those situations? The majority of people that cross the border are people that can live just fine but want more.

As for the which source is better I found the same numbers on cnn.com. Bottom line is you can't tell me that we are not paying for illegal immigrants that are here in the U.S.

You talked about "us profiting from horrible acts to the indians," first that in of its self is a whole new issue that I"m not going to even touch. You can't even compare that situation to our current situation. Do they do the same vaccinations that we are subjected to? No. Well, I'll touch that subject somewhat. Obviously we don't vaccinate for small pox. What if someone who has small pox or the avian influenza crosses the border and we don't know about it? Are we supposed to pay for our sins to what we did against the indians? Are we supposed to lay down our lives and give our land to Mexico?

You state that illegals can't make minimum wage here. That statement is false. When we were working at Chili's about 3/4 (15)of the cooks were illegal immigrants. They were working just fine and above minimum wage. They didn't have any family that were struggling or on the verge of death. That was before they were deported.

As for your statement accepting the poor and needy. I want to ask you a question. Are we to accept all the poor and needy that want to come to the U.S.? What if we said to the whole world, Come all the poor and needy we will take you, no if and or buts. What affect would that have to us? What We would have millions of people flocking here. Our hospitals would be over run. The police would not be able to provide the protection needed. We physically could not support open borders to everyone. Also if we had open borders that would allow anyone who wants to hurt us to come in.

Bottom line is that as our country evolved with time so has our ideology. No longer do we accept all the tired and poor but we accept those who are tired and poor that want to come here legally.

As for the comment about the hospitals. If an illegal person comes into the hospital needing medical attention, federal law states that they can't refuse service. So in those instances they have to provide service for free or pass that cost on to other paying patients. Well the problem is that the hospitals have so many illegal immigrants demanding service that they aren't making any money. Obviously they do not check their visa status but whose going to pay?

So here are a few questions that I have for you.

How much are you willing to give up each paycheck to accomodate people crossing the border? Would you be willing pay up to a $1,000 a month to help pay for their needs?

If you get in a car accident and its not your fault but it was an illegal immigrant and he doesn't have any insurance. Are you willing to pay for your own medical expenses and the cost to fix your car?

Are we to open our borders to everyone?

How do you propose to help pay for assistance for those that come here?

Hope to hear your response, talk to you later!

Sara Allsop said...

Yes, of course you would try and come to the USA. And if you got caught, you would get sent back to Mexico and you would try again the next day, just like they do....so...if you would do the same excact thing they would, I don't know why we're still having this argument, but here it goes....

Yeah, there are SOME programs in mexico helping people, but you've seen the kids on the street begging for change when they should be in school. There aren't nearly enough.

And I know Mexico isn't that bad, but Mexico isn't the only place we get immigrants from. We get them from Gautemala (75% below pverty), Honduras (53% below poverty), Cuba (no info), and etc. And we SHOULD be taking more immigrants from places like Somalia (no info), Liberia (80% below poverty).

As far as the Native Americans go, I won't get into that.

And as far as everyone in the entire world wanting to live in the USA...not everyone wants to live here. Plenty of people want to stay and live in their own countries, it is just hard for them to do so. Maybe if we upped our foreign aid and helped other countries get on their feet, (instead of putting military regimes in place like in Nicuragua...) they wouldn't be in such trouble, and they woulnd't need to come to the USA and work.

When it comes to foreign aid in terms of percentage of GNI the USA comes 21st in the countries that give the most, giving just .17%. (Sweden wins the contest with 1.03%)

You say our country has evolved with time and ideology. I think the USA government has pretty much always done what was best for the USA goverment and screw everyone else. We let a lot of immigrants in when we had lots of land and wanted more citizens. We fought Mexico over California, New mexico and lots of Texas when we wanted more land. We then shipped people over here from China to build our railroads, and then didn't let them stay. During WWI and WWII we invite Mexicans by the busload to come and work our factories, and as soon as we don't need them anymore, send them back. I think now would be a good time to risk some of our now slightly faltering economy to do something that isn't just good for the USA.

You ask how much I'm willing to give up from each paycheck to help other people? Quite a lot. Your $1,000 number came out of nowhere, but if your facts are correct and it costs a "houshold" around $200 a year, and I am half of a household, if I had a full time job, I would probbaly pay around $2 a week. I think I can handle that without too much strain. I could probably handle ten times that or twenty.

As to the second, no I'd be pissed if ANYONE crashed into me and couldn't pay it. You act like every single unpaid hospital bill and crime is committed by illegals. We have plenty of our own uninsured people here, we have plenty of people driving on suspended, revoked licenses with no insurance.

(smiley face.)

M. Paul Bailey said...

You know, you touched on something interesting. It used to be that all the world's best talent came to the United States because this is where they could get a good education and good work. It has been referred to as the "brain drain."

An interesting by-product of globalization is that it makes other countries much more viable for good education and work. Chinese people don't move to the United States because they hate China. They move here because they see a brighter future here. They'd rather stay in China. Well, they're starting to be able to do just that. We're already starting to see this phenomenon, and we will continue to see fewer and fewer smart people move to the US.