Archive for October 2014


The Immigration Reform Investment: More Legal Workers, More Tax Revenue

October 6th, 2014 — 2:35pm

As Congress continues to ignore one of the most important issues of this generation, the U.S. is losing valuable tax money. Without a safe path to legal work, many migrant workers don’t pay taxes, nor do their employers. In 2013, the Senate passed a bill that could have changed that, the “Border Security, Economic Opportunity, and Immigration Modernization Act.” Also known as S. 744, the law would have provided a path to legal status for millions of undocumented workers in the United States. The House never even considered S. 744.

The Social Security Administration and Pew Research estimated that nearly 63% of undocumented workers don’t contribute to taxes. The 33% who do pay taxes currently contribute roughly $13 billion a year. S. 744 could have potentially tripled that number. The federal government wouldn’t be the only beneficiary — the Center for American Progress (CAP) believes that over a 10-year period, undocumented immigrants would pay $40 billion more in state and local taxes.

With legal status, migrant workers would be able to get better wages — CAP estimates undocumented workers’ wages could grow around 15% with legal status, and an additional 10% after citizenship. Higher wages for undocumented workers means they could contribute enough to reduce the federal deficit by $820 billion over 20 years, according to ImmigrationImpact.com. Thirty years of the additional taxes could extend Medicare for four years. And we could add $606 billion to Social Security, potentially funding 2.4 million more American retirements. But partisan politics have put any meaningful debate on hold, and our costly and broken immigration system continues to do more harm than good.

To put things in perspective, the Congressional Budget Office crunched the numbers for the potential law. By their calculations, every dollar spent on implementing S. 744 could mean two more dollars in taxes, effectively doubling the initial investment and making millions of peoples’ lives better. Beyond simple compassion, beyond American progress, immigration reform is a great investment. But political agendas stand firmly in the way of actual legislation, and undocumented workers continue to live and work in hiding.

Even temporary deferred action could bring in a significant amount — nearly $4.5 billion in the first year alone. And that number only includes undocumented workers who have been in the U.S. for 10 years or more. If President Obama offered deferred action to undocumented workers who have been in the U.S. for 5 years or more, the U.S. could collect $6 billion in the first year.

The numbers speak for themselves — immigration reform could have a major impact on the economy. Hopefully Congress can get past the partisan bickering and make some progress.

 

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