Illegals Pay Taxes?

Taxing Undocumented Immigrants:
Separate, Unequal and Without Representation

by
Professor Francine J. Lipman
School of Law
Chapman University

Also published in Tax Lawyer (Spring 2006) and Harvard Latino Law Review (Spring 2006)

Americans believe that undocumented immigrants are exploiting the United States' economy. The widespread belief is that illegal aliens cost more in government services than they contribute to the economy. This belief is undeniably false. [E]very empirical study of illegals' economic impact demonstrates the opposite . . .: undocumenteds actually contribute more to public coffers in taxes than they cost in social services. Moreover, undocumented immigrants contribute to the U.S. economy through their investments and consumption of goods and services; filling of millions of essential worker positions resulting in subsidiary job creation, increased productivity and lower costs of goods and services; and unrequited contributions to Social Security, Medicare and unemployment insurance programs. Eighty-five percent of eminent economists surveyed have concluded that undocumented immigrants have had a positive (seventy-four percent) or neutral (eleven percent) impact on the U.S. economy.

Undocumented immigrants, like all U.S. citizens and residents, are required to pay taxes. Despite the historic and strong American opposition to taxation without representation, undocumented immigrants (except in rare and unusual cases) have not enjoyed the right to vote on any local, state or federal tax or other matter for almost eighty years. Nevertheless, each year undocumented immigrants add billions of dollars in sales, excise, property, income and payroll taxes, including Social Security, Medicare and unemployment taxes, to federal, state and local coffers. Hundreds of thousands of undocumented immigrants go out of their way to file annual federal and state income tax returns.

Yet undocumented immigrants are barred from almost all government benefits, including food stamps, Temporary Assistance for Needy Families, Medicaid, federal housing programs, Supplemental Security Income, Unemployment Insurance, Social Security, Medicare, and the earned income tax credit (EITC). Generally, the only benefits federally required for undocumented immigrants are emergency medical care, subject to financial and category eligibility, and elementary and secondary public education. Many undocumented immigrants will not even access these few critical government services because of their ever-present fear of government officials and deportation.

Undocumented immigrants living in the United States are subject to the same income tax laws as documented immigrants and U.S. citizens. However, because of their status most unauthorized workers pay a higher effective tax rate than similarly situated documented or U.S. citizens. Yet, these workers and their families use fewer government services than similarly situated documented immigrants or U.S. citizens. Moreover, unauthorized workers have been denied remedies by the U.S. Supreme Court under the National Labor Relations Act and may be challenged to receive protection under wage and hour, anti-discrimination and workers' compensation laws. As a result, undocumented immigrants provide a fiscal windfall and may be the most fiscally beneficial of all immigrants.

Despite their net positive contribution to public coffers, hundreds of thousands of immigrants enter the U.S. each year without documents because of impracticable quota and labor certification requirements. These immigration restrictions combined with the additional tax or tariff on undocumented immigrants are inconsistent with economically efficient immigration policy. Moreover, the high effective tax rate imposed on the poorest undocumented working families relative to their less unfortunate friends and neighbors is inconsistent with fundamental tax policy.

My recently published article describes and analyzes the separate, unequal and unrepresented federal taxation of undocumented immigrants. You may access this article in full for free at http://ssrn.com/abstract=881584 as well as a companion piece titled "Bearing Witness to Economic Injustices of Undocumented Immigrant Families: A New Class of 'Undeserving' Working Poor" (Nevada Law Journal, Spring 2007) at http://ssrn.com/abstract=951567 .

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Francine J. Lipman is a Professor of Law at Chapman University in Orange, California. She is the recipient of numerous awards for excellence in scholarship, teaching and research. Professor Lipman graduated from N.Y.U. School of Law with an LL.M. in Taxation and from U.C. Davis with a J.D.

http://www.XXXXXaztlan.net/taxing_undocumented_immigrants.htm

This is just a moonbat professor talking out of his AZZ.

The social services that the illegals use cost billions of dollars. While they may have some jobs that they pay taxes at they are low paying, therefore very little in tax is taken out under false SS numbers. He doesn't take into account the costs of the illegals that are in jail either. They make up close to 20% of the prision population that taxpayers pay for.

If these illegal slime make minimum wage, their withholding tax is very small. These would be getting thousands in unearned income credit, so it's bull to say they are giving in a net positive. Just as these illegals lie to the system to get jobs, they also get benefits of citizenship in the same way.

Just another socialist college prof who ignores facts and bends truth in order to justify his viewpoint.

ok,

i can agree with the minimum wage - but i think he does have a point - there are dozens of different kinds of taxes people pay just by living in a country - sales tax being a major item (and i have a good feeling that most immigrants don't live in Delaware )

while he might be exaggerating i do think that this would be an interesting subject to develop and research - im guessing sooner or later somebodys going to do a credible study/census to prove that immigrants are helping or harming the economy from the tax perspective.

Sales tax from the illegals wouldn't add up to all that much, they send so much of their earnings back to Mexico. That has been talked about quite a lot, how that money goes there and never comes back.

Sure, when illegals buy stuff at Wal Mart and CostCo they pay sales taxes and when I used to visit Mexico regularly I paid various taxes there as well. But this azzclown doesn't know what he's talking about if he's saying they regularly pay anything more than point of sale taxes. The big lie that the employers of these illegals are sending in social security etc. taxes on illegals has been shown to be false over and over. We've found that they often take the money from the illegal's pay and plough it back into their profits or more often keep no record of the illegals on their books at all. Few illegals drive cars that are registered in their own names let alone keep up a tag on the vehicle. Nearly every one stopped has a stolen tax paid decal on it and hasn't been updated since the last legal owner.

It's the American citizen who should be bitching about taxation without representation.

Maybe sales tax, but they still take far more than they put in and as a result I cant even afford a dentist because of medicines over inflated prices