Here are 5 myths about undocumented immigrants, and why they’re wrong. Myth # 1: They don’t pay taxes. Undocumented immigrants are already U.S. taxpayers. Collectively they paid an estimated $10.6 billion to state and local taxes in 2010, according to the Institute on Taxation and Economic Policy (ITEP), a research organization that works on tax policy issues. Myth # 2: They don’t pay into Social Security. The truth is that undocumented immigrants contribute more in payroll taxes they will ever consume in [Social Security] benefits. Money.cnn 11/20/14 (We will cover the next three “myths” in our next posting.)
Fact Check: No serious critic of illegal immigration claims that “undocumented” (i.e., illegal) immigrants don’t pay taxes. It’s virtually impossible to live in the U.S. without paying some taxes, among them sales taxes if you purchase an item and property taxes (indirectly) if you rent a place to live. Illegal aliens also pay state and federal taxes, although quite often they do not. According to some estimates, as many as half of them are paid under the table, and thus pay no state or federal taxes.
As for the figure of taxes paid by illegal aliens, the ITEP issued a new report this year stating that in 2012 illegal aliens paid a total of $12 billion in state and local taxes. This is an impressive figure, but it is meaningless without a comparison with the total of state and tax dollars that illegal aliens consume. ITEP doesn’t provide such a comparison. But a study by the Heritage Foundation has done so.
That study maintains that illegal aliens paid $17.6 billion in local and state taxes in 2013, a sum much larger than ITEP’s estimate for the previous year. Nevertheless, the study also found that all the expenditures on illegal aliens at all levels of government exceeded all the local, state, and federal taxes they paid by a total of $54.5 billion. This is the key statistic. It shows that illegal aliens are a net fiscal loss to society.
Given this net loss, it doesn’t really matter what illegal aliens pay into Social Security. What they are paying in there is more than offset by fiscal losses elsewhere. Furthermore, their presence in the job market has the effect of lowering wages levels, thus decreasing the tax base. The resulting loss of Social Security taxes must be weighed against their contributions.
Nor is it necessarily true that they will never receive any Social Security benefits. If Obama’s amnesty decree is upheld by the courts, many will get legal status and eventual access to Social Security. Sen. Ron Johnson (R-WI) recently asked the Social Security Administration (SSA) what would happen if the amnesty goes into effect in the near future. The SSA replied that 16.000 would receive Social Security within the following two years and that nearly 700,000 would be recipients within the next four decades. Illegal immigration is no bargain for Social Security. (To be continued.)