Wednesday, December 12, 2007

Congressional Budget Office Report: The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments

A CBO report (Dec. 2007) concludes that:  "Most available studies conclude that the unauthorized population pays less in state and local taxes than it costs state and local governments to provide services to that population. However, those estimates have significant limitations; they are not a suitable basis for developing an aggregate national effect across all states."  For the report, click Download 12-6-Immigration.pdf.

KJ

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The report is inadequate because the statistics are incomplete and the methods for accumulating them are not uniform across the country. Despite it being nearly useless, if the conclusion is correct, the news can only get worse for the illegal alien advocates. When estimates for the costs attributable to those that would avail themselves of welfare benefits, foods stamps and other benefits currently denied most of them are included in future reports, the public will realize the true cost of amnesty.

Posted by: Horace | Dec 12, 2007 3:30:34 PM

Hey Horace, how are you today?

Just to clarify, undocumented immigrants do not receive welfare benefits or food stamps for themselves. Most legal immigrants don't receive welfare benefits. You pretty much have to be a citizen to get them. The only thing that undocumented immigrants are entitled to in this country is

1) if they are a child, they are allowed to attend school. We can't let children run around lose and it's not fair to punish them for something they had no say over.

2)Emergency medical care

Immigrants pay more in taxes than they receive in benefits. The problem is the federal government benefits yet the state and local community who provide the services don't see a fair share of that money. So people say they are a drain to the community's coffiers when they are actually a benefit for the federal government's coffers.

Posted by: DM | Dec 13, 2007 6:29:11 AM

Hey Horace, how are you today?

Just to clarify, undocumented immigrants do not receive welfare benefits or food stamps for themselves. Most legal immigrants don't receive welfare benefits. You pretty much have to be a citizen to get them. The only thing that undocumented immigrants are entitled to in this country is

1) if they are a child, they are allowed to attend school. We can't let children run around lose and it's not fair to punish them for something they had no say over.

2)Emergency medical care

Immigrants pay more in taxes than they receive in benefits. The problem is the federal government benefits yet the state and local community who provide the services don't see a fair share of that money. So people say they are a drain to the community's coffiers when they are actually a benefit for the federal government's coffers.

Posted by: DM | Dec 13, 2007 6:29:31 AM

What nobody seems to understand about this issue, or at least admit about this issue, is that it is not a simple question of, "how much to we take in from the direct taxes of illegal immigrants vs. how much to we pay out for social services for illegal immigrants?" It is much more complex. The true way to frame the question is, "how much do we take in from the direct taxes of illegal immigrants PLUS the indirect taxes generated because of their contributions in the workforce, (ie: The taxes that the owners and shareholders of the companies that they work for pay, the taxes that the additional employees who have jobs because of the employment of the illegal immigrants and the added productivity/sales that they generate for the business, the corporate taxes paid by the companies that employ the illegal workers on the profits generated as a direct and sometimes indirect result of those illegal employees of the company, and finally the taxes generated through the multiplicative effect of the money spent by the illegal aliens and their legal co-workers - usually counted by economists as 5 times the direct spending - because the money gets circulated throughout the economy). In point of fact, when these additional taxes are added to the direct taxes, it renders the original question completely mute. We take in several TIMES the amount of money that we doll out because of the illegal immigrants.

Furthermore, if we were to finally adopt a comprehensive immigration policy that allows the illegal immigrants to come out of the shadows and be counted, we could apportion the federal and state tax revenue correctly and proportionately to where it's needed, so that certain counties wouldn't be overwhelmed. The funds are there, they just aren't getting to the right places since the illegal aliens aren't documented.

This isn't rocket science, but it's not a bumper sticker either. It's a solution that requires some thinking through, but it can be done.

Posted by: Robert Gittelson | Dec 13, 2007 7:53:15 AM

I'm fine, DM.

You said: Immigrants pay more in taxes than they receive in benefits.

However the CBO report states that.... "Most available studies conclude that the unauthorized population pays less in state and local taxes than it costs state and local governments to provide services to that population."

Since illegal aliens are living at the economic margins of our society, something they share with the poor citizen, they pay at the lowest tax rates, perhaps even qualifying for Earned Income Tax Credits, which means they pay no federal and local taxes at all, by the time they receive their income tax refund. And despite the loose conjecture promoted by liberals, immigration lawyers and illegal alien advocates, many illegal aliens are being paid under the table. Regardless, many amnestied illegal aliens, given a path to citizenship will ultimately become elligible for and receive federal and state welfare. Advocates argue that illegal aliens pay into Social Security without expectation of receiving benefits. Howeer, amnestied illegal aliens would not be a boon to the Social Security system, as they, like all low income earners, ultimately receive more money than they put into the system. Adding additional poor to the Social Security rolls will not change the ultimate fate of Social Security, only postpone it and make it's collapse precipitous as millions of additional poor come of age as recipients become elligible en masse. Illegal aliens do not even pay much in the way of sales taxes, as they have little disposable income. Amnestied illegal aliens tend to pay lower per capita property taxes, as in many cases they live under more crowded conditions, often in violation of local zoning ordinances. Since property taxes are a source of revenue used for our schools, lower per captita property taxes mean that they don't pay their fair share of their children's educational costs, with the middle class bearing what amounts to a burden of charity.

We don't need anymore poor and illiterate citizens in this country. We already support millions of citizens through welfare supplements. It's just poor policy for a nation whose goal should be improving the literacy rate to adopt millions more. It's a fact that low literacy rates defeat national goals to become competitive in the world market. I find it ironic that this site promotes immigration through their exceptional immigrant of the day posting, revealing the biographies of people who've made valuable contributions to our society, all the while promoting the infusion of illiterate people who would manifestly require charitable help just to enjoy the minimum standard of living that is acceptable in our society.

Posted by: Horace | Dec 13, 2007 4:47:04 PM

In response to Horace’s comments posted here, I’d like to offer a few comments in rebuttal. First of all, Horace is clearly a bright person, so please understand that I appreciate his point of view, and respect his arguments, even if I disagree with some of his assertions.

First, to clarify my position on his first point, I didn’t say the immigrants pay more in taxes than they receive in benefits. That is a murky issue. Academics and economic data have offered divergent opinions on this topic. Economists from UC Berkley seem to think that they do pay more then they receive, but I’ve seen data to support the contrary, so I don’t feel qualified to render a determination, other then to say that the true answer is probably that it is a close call, plus or minus a small percentage.

My argument is that it is a moot question, because if you pull back the lens and take a wider view of the overall economic picture, it is the PRESENCE of these millions of workers contributing to the domestic economy that generates overall tax revenue, both directly from the taxes of the immigrants, and indirectly through the additional tax revenue generated through the work that they produce, that indeed adds up to much more then they could ever receive back.

I concede many of Horace’s points. Again, I respectfully submit that it is important to look at the issue from a macro instead of a micro point of view. In the short term, I agree that many of the illegal immigrants are on the lowest rung of our economic ladder. That doesn’t mean that we don’t need them. It takes worker bees to make the honey, so to speak. We can’t all be chiefs, we need some Indians too. And while that analogy might not be politically correct, it is fiscally correct.

I also point out that second and third generation immigrants will be, and always have become fully assimilated economically into our capitalist society.

The millions of immigrants are more then pulling their weight, and will only pull more weight as time goes by. This is important to note, as we desperately need the influx of their tax dollars feeding into the Social Security System going forward. The system is set up as a pyramid, with a wide base of many workers feeding into and up to the top level of retirees. We are running out of base workers. The system requires some 20 workers for every retiree, but within 40 years we will be down to only 2 workers for every retiree. That doesn’t work. We need all of the workers that we can get to sustain the system or it will run out of money. It’s as simple as that. Fed chairman Ben Bernanke noted that immigration can help to solve this problem, and added that even 2,000,000 new immigrants a year would be insufficient to fully fund the system. Dowell Myers, a professor of urban planning and demography at USC, has written a book titled “Immigrants and Boomers: Forging a New Social Contract for the Future of America”, in which he explains that the baby boomers’ future is directly tied to the economic success of the younger immigrant population.

There are many humane reasons why we should adopt a comprehensive immigration policy, but there are many fiscal reasons why we MUST adopt a comprehensive immigration policy.

Posted by: Robert Gittelson | Dec 14, 2007 8:22:30 AM

"The system is set up as a pyramid, with a wide base of many workers feeding into and up to the top level of retirees. We are running out of base workers. The system requires some 20 workers for every retiree, but within 40 years we will be down to only 2 workers for every retiree."

You are correct Mr. Gittelson, but the solution is not to add more investors in what amounts to a Ponzi scheme. If Social Security were a private investment program, its operators would be subject to prosecution as criminals. Social Security is ultimately unsupportable without exceeding rational limits of immigration.

Posted by: Publius | Dec 14, 2007 6:35:44 PM

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