San Luis Obispo, CA. - "Do you think that an illegal immigrant getting money is going to pay taxes?" Donald Trump's rhetorical question tried to confirm the widely acknowledged myth that undocumented workers pay no taxes.
He is wrong, of course. A study by the Institute on Taxation and Economic Policy found that unauthorized immigrants in the US pay billions of dollars to the treasury. These include property, income, sales taxes as well as contributions to Social Security and Medicare. The effective tax rate for unauthorized workers is 8 percent which is even higher than that of the top 1 percent of taxpayers who pay 5.4 percent.
Overall in the US there are about 8 million workers who do not have a legal right to be in the country, representing five percent of the American workforce. They have jobs in the service industry, construction, agriculture, and other areas typically not requiring many skills, receiving lower wages. The average salary for an undocumented family is about 30.000 dollars a year compared to the US average of 54.000. The total amount in taxes paid by unauthorized immigrants is about 12 billion dollars a year.
Of course, a certain percentage of unauthorized immigrants paid cash by their employers do not pay taxes as is often the case for authorized workers who operate in the cash economy. Yet, about 50 percent of undocumented workers pay taxes and about 75 percent of these people also contribute to Social Security.
Working in the US requires proper documentation, but some unauthorized immigrants use fake or expired social security numbers. Companies are supposed to check the validity of these numbers but make little effort to do so. If the fruits and vegetable are ready to be picked, the focus is on doing it quickly before they rot.
Verifying the legal status of potential workers is not a high priority. The government does not send inspectors to check the legal status of farm workers. Doing so could prove devastating to ranchers and our economy.
The Social Security Administration calculates that more than 100 billion dollars in their account cannot be traced to legal numbers. This includes about 3.1 million fake or expired Social Security numbers. This money is kept in what is called a "suspense file," which increases by 15 billion dollars a year.
Most unauthorized immigrants will probably never receive a dime of this money. Nor do they receive other benefits such as welfare, Medicare, or benefits through Obamacare.
The myth is that unauthorized immigrants come to the US for social benefits. In fact, people come because they're looking for a better life and a job.They represent a larger percentage of the work force (12.4 for immigrants vs. 11.5 for the general US population).
Unauthorized immigrants in the United States use services like everyone else but at a lower rate than legal residents. Fear of deportations discourages them from participating actively in officialdom.
Services have a price tag. The conservative Heritage Foundation claims that each unauthorized immigrant receives almost 25.000 dollars in benefits and services while contributing about 11.000 dollars in taxes. Another concern is the belief that they bring down wages for low-skilled workers. Some economists have calculated that undocumented workers bring down the wages of low skilled American workers by one percent.
Yet, others see positive economic contributions. Giovanni Peri, a professor at the University of California, Davis, has found that undocumented workers complement skilled workers without competing with them. George Borjas, a professor at Harvard University, has found that America's wealth increases by one percent because of unauthorized workers contributions. Of course, since unauthorized immigrants are paid less, it means that consumers benefit through lower food prices and other services.
Donald Trump believes that the 11 million unauthorized workers should be forced to go back to their country of origin. This would cost at least 400 billion dollars but probably as much as 600 billion. Yet, a majority of Republican primary voters in most of the States (except Alabama) on Super Tuesday said they believe that unauthorized immigrants should be allowed to stay. Do voters know something Trump doesn't?
Domenico Maceri, PhD, UC Santa Barbara, is a free lance writer living in San Luis Obispo, CA. He is the author of a book on Pirandello, one on Spanish grammar, and another on Italian grammar. He has also published a number of articles in newspapers and magazines around the world, some of which have won awards from the National Association of Hispanic Publications.Click HERE for more articles by Domenico Maceri.