Do illegal immigrants receive more government benefits than they pay in taxes?

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Do illegal immigrants receive more government benefits than they pay in taxes?

Posted April 3rd, 2008 by Joel

The Associated Press

Day laborers, who identified themselves as illegal immigrants looking for work, gather around a potential employer that stopped to hire workers at a street corner where illegal immigrants gather in Dallas.

One of the most common criticisms of illegal immigration is that immigrants pay little or no taxes, yet still receive government services paid for by tax-paying U.S. citizens. This criticism was repeated again recently by Missouri Treasurer Sarah Steelman as she opened her campaign for governor of that state:

The Republican presented a report to a Senate committee, expounding on the burden that illegal workers place on the state and federal government. Such workers and their employers avoided paying between $242 million and $449 million a year in income and payroll taxes for Social Security, Medicare and unemployment insurance, she said.

“So the problem is quite evident,” Steelman said. “It also creates an unfair advantage for employers who are not paying those taxes over companies that do pay the required taxes.”

Steelman, it turned out, misread a study on the topic and overestimated the amount of unpaid taxes. But she asserted that her general claim -- that the hiring of illegal immigrants robs government of taxes. Is it true?

It may depend on whether you take a long-term or short-term view of the topic. In the short term, experts seem to agree, illegal immigrants tend to receive more in benefits than they pay in taxes. The disparity has given rise to a Web site created by the conservative Heritage Foundation: No Free Mustang.

Why is it called that? Robert Rector explains:

"The average illegal immigrant family receives an average of $30,000 in governmental benefits! Yet they pay only about $9,000 in taxes per year. That creates a $21,000 shortfall that the American taxpayer has to make up. That's like buying each of the illegal immigrant families a brand new Mustang convertible -- each and every year!"

The Center for Immigration Studies, a vocal opponent of illegal immigration, looked at "The High Cost of Cheap Labor"

in 2004 and found that illegal immigrant families tended to receive fewer welfare and Medicaid benefits than other households -- but even then, didn't pay enough in taxes to cover the cost.

Based on Census Bureau data, this study finds that, when all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion.

In terms of welfare use, receipt of cash assistance programs tends to be very low, while Medicaid use, though significant, is still less than for other households. Only use of food assistance programs is significantly higher than that of the rest of the population. Also, contrary to the perceptions that illegal aliens don't pay payroll taxes, we estimate that more than half of illegals work "on the books." On average, illegal households pay more than $4,200 a year in all forms of federal taxes. Unfortunately, they impose costs of $6,950 per household.

The disparity might be higher, but the Reason Foundation's Shikha Dalmia noted in 2006

that the federal government had long since cracked down on benefits to illegal immigrants.

The 1996 welfare reform bill disqualified illegal immigrants from nearly all means-tested government programs including food stamps, housing assistance, Medicaid and Medicare-funded hospitalization. The only services that illegals can still get are emergency medical care and K-12 education.

According to a study by the Urban Institute, the 1996 welfare reform effort dramatically reduced the use of welfare by undocumented immigrant households, exactly as intended.

The exception for K-12 education, though, is a pretty big one -- and it's borne, generally, by state and local governments. Wisconsin is an example, as shown in this report

on a study in March by that state's Policy Research Institute:

The data show Brown County loses an average of about $9 million a year on immigrants. In other words, immigrants consume more in state and local services than they pay into the system through state and local taxes. The biggest cost burden is education for children, which is the most expensive public service.

On the other hand, the presence of illegal immigrants in the United States has apparently bolstered the finances of Social Security. Many undocumented workers pay into the system, but never retire or receive a dime from the program, as the New York Times reported in 2005:

As the debate over Social Security heats up, the estimated seven million or so illegal immigrant workers in the United States are now providing the system with a subsidy of as much as $7 billion a year.

While it has been evident for years that illegal immigrants pay a variety of taxes, the extent of their contributions to Social Security is striking: the money added up to about 10 percent of last year's surplus.

That continues to be true, according to an April 2 editorial in the Times:

In the fine print of the 2008 annual report on Social Security, released last week, the program’s trustees noted that growing numbers of “other than legal” workers are expected to bolster the program over the coming decades.

We’re not talking chump change. According to the report, the taxes paid by other-than-legal immigrants will close 15 percent of the system’s projected long-term deficit. That’s equivalent to raising the payroll tax by 0.3 percentage points, starting today.

And in a 2007 report, the White House Council of Economic Advisers asserted that, over the long haul, immigrants end up paying off:

The long-run impact of immigration on public budgets is likely to be positive. Projections of future taxes and government spending are subject to uncertainty, but a careful study published by the National Research Council estimated that immigrants and their descendants would contribute about $80,000 more in taxes (in 1996 dollars) than they would receive in public services.

The overall effect, the council said, is a bit of a wash -- and a minor one at that:

The long-term fiscal approach imparts four main lessons: 1) although subject to uncertainty, it appears that immigration has a slightly positive long-run fiscal impact; 2) skilled immigrants have a more positive impact than others; 3) the positive fiscal impact tends to accrue at the federal level, but net costs tend to be concentrated at the state and local level; and 4) the overall fiscal effect of immigration is not large relative to the volume of total tax revenues – immigration is unlikely to cure or cause significant fiscal imbalances.

As Congress in 2007 debated a bill that would create a "pathway to citizenship" for immigrants already in the United States, the Congressional Budget Office weighed in with a mixed fiscal review of the proposal:

The immigration bill before Congress would cost the federal government roughly $18 billion over the next decade, largely because of the huge costs of additional border control and law enforcement measures, according to an analysis released yesterday by the nonpartisan Congressional Budget Office.

The analysis found that over the next decade, newly legalized immigrants and guest workers would generate $48 billion in additional tax and Social Security revenues, while using about $23 billion worth of tax credits and social services. Thus, the newly legal immigrant population would contribute a net of about $26 billion over the decade, the report said.

Over the long haul, the bill would be a virtual fiscal wash, costing after 20 years a few billion dollars a year more in enforcement and government assistance than the Treasury would get back in tax revenues from the foreign-born workers, the study said.

So: Immigrants consume far more in government benefits than they pay in taxes. Truth or not?

Truth

63% (781 votes)

Not

37% (460 votes)

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Anon

Submitted on July 15th, 2008 by Pablo

Those US citizens who are the free loaders as you want to point out, are guaranteed the right to have the benefit they get.

Illegals have no rights once so ever! Yet even you admit that Illegals are getting benefits that are reserved for citizens.

I work in the social services area and with the Red Cross. I see way too many legal citizens being turned away because of lack of resources. Yet if you look at the sheer numbers of going it should not be.

The amount of resources set aside for citizens is enough to be $14,000 per citizen. Yet what does the same system say? that the citizens are getting roughly $6500 to $7000 per citizen. That the remainer is being abused mainly by illegals.

See abuse Social security in HR 12 -14 hearings on illegals taking food and money away from US citizens.

I have seen children who will go hungry because some illegal stole from that child!

Even if $1 was taken by an Illegal, its too much! Why should the poorest of the poor in America have to suffer because of a theft by an illegal who is abusing the system and has no rights to the funds.

Some people may seem lazy but are not. I have a brother in law, that had his back broken. He looks fairly normal most of the time and most people think nothing much is wrong with him and I have heard people call him lazy. Yet, he has spent on average 3 months our of every year in the hospital because of the complications from the injury he had.

Its not his fault that he can not work. I feel sorry for him because he will never be able to better himself through hard work and achieve the American Dream which comes to those who work hard for it!

My brother in law would not be where he is today if worker's compensation actually worked for the injured workers in this country! Insurance Companies in general do not pay on claims with some people because they feel that they have a better than 50/50 shot at winning in court. Even if they lose, if they drag it out for years, they made money and they know that most hospitals and doctors write off bad debt after 3 years. Thus if the insurance company can delay out long enough they do not have to pay the amount they should.

But this is about illegals who should not be in the US in the first place! They have no civil rights and they definately should not be allowed access to any benefits or welfare programs!

???

Submitted on July 14th, 2008 by Anonymous

Anonymus so claimed PhD:

Now your off the edge. What exactly is your point and what does it have to do with illegal immigration and the burden it puts on our economy, institutions, infrastructure, schools, health care and judicial/criminal systems?