Immigrants; Who Cares?If illegal aliens paid taxes, even more than citizens, would we care that they are here? If we could effectively screen the drug smugglers and potential terrorists, and immigrants paid proportionately more taxes than the services they consume, the only objection to their presence would be bigotry or xenophobia. So I’m sure there’d be few complaints. I support the proposals for abolishing the 16th amendment, and eliminating all income and payroll taxes in favor of a system of consumption taxes. The “fair tax,” most actively advocated by Americans for Fair Taxation, would reorder many economic incentives and would serve to level the playing field in international trade. But the implications for immigration policy might dramatically transform that public debate. Under a consumption-based tax system everyone who shops pays taxes. Illegal aliens shop. They buy groceries, gasoline, and fast food. One of the criticisms of a consumption tax is that it tends to be regressive by taxing more heavily the lower income individuals who must spend more of their income on necessities. The “fair tax” proposal would provide rebates to Americans to offset the taxes paid on subsistence level purchases. Illegal aliens would not be eligible for that rebate. Therefore, an illegal alien would be taxed at a significantly higher rate than a citizen. Their incentive would be to become legal or leave. A rational American might even welcome more illegal aliens – they pay higher taxes than the services they can legally access. I think the most compelling reasons for the fair tax are the ways it creates a more level footing for American products versus imports, and the way it would create incentive for savings rather than debt. The way a fair tax might defuse the current immigration debate is just a bonus. Michael Previous: OPB; politically correct to a fault? -- Next: Political retribution? Comment from Paul Davis: This biggest problem with the issue is no one want to recognize the complexity of it. As the majority of our society become more educated and technical, there are fewer people available for the jobs requiring less skill and education. As we push to a greater “service economy”, the demand for these positions continues to grow. Salaries in the skilled fields grow at a limited rate so, people can’t really afford to pay more for services and food. This makes it difficult to raise salaries in the non-professional arena. An example from some years ago, INS raided the onion growers in Georgia. Zell Miller, the anti-immigrant congressman, raised all kinds of hell about how they couldn’t take them or the onions would rot in the fields. INS hasn’t done much of anything in GA since. Our businesses have another looming problem. Canada is current courting many potential immigrants. They are offering legal work, decent salaries, and free health care. As more people chose to go to Canada instead of the US, we may find ourselves with a shortage of labor. When that happens, watch the price of groceries triple. As for taxes, the overwhelming majority pay income and social security taxes (with fake SSNs), and the overwhelming majority go home after a year or two. So, they actually are contributing while getting nothing in return. There is a small percentage that stay, and this is what we see as the population growth. We aren’t going to get a simple solution to the issue because of the power of the business lobby. The best I could see is for those who come illegally and want to stay, charge a significant fine (there never was amnesty anyway) and give them the opportunity to become legal. Fines would help offset the social costs, and offer some compromise to the anti-immigrant crowd. A fine is also a confirmation of a criminal charge to appease the anti-amnesty crowd. I think you are on the right track with exchanging income tax for a consumtion tax. The income tax system penalizes people for suceeding (which is just stupid). A consumption tax would encourage saving and discourage living paycheck to paycheck, it would make the economy more resilient by keeping more people off of the edge. Posted by Paul Davis Oct 18, 07:41 AM # Comment from Michael Smith: Paul, Thanks for the comment, but there’s one assumption you made that concerns me. You said “as the majority of our society becomes more educated and technical…” I’m not so sure that’s completely true. I guess perhaps a majority is moving that direction, but there are big portions of our population that aren’t particularly well trained for the new jobs, and are stuck in cities where there aren’t even onions to pick, and the cost of living is relatively high. We’re in complete agreement that this is a complicated issue that is not served well by the current political process and the influences of lobbyists and money. Hopefully, if enough thoughtful people keep prodding the debate, we can move from “illegal means illegal” to a productive discussion. Posted by Michael Smith Oct 18, 08:05 AM # |
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