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Thursday, August 22, 2019
The 5.2% illegal alien tax
A Breitbart News report ripping the New York Times — always a fun read — revealed the true cost to American workers for allowing illegal aliens to work here.
$493.9 billion annually, according to the National Academies of Sciences, Engineering, and Medicine.
Illegal aliens and other immigrants lower wages by that amount. It is a 5.2% payroll reduction, a tax if you will on workers.
And unlike federal income taxes that hit the 1% hardest, this payroll tax hits lower wage workers the hardest.
- Immigration does make the U.S. economy larger by adding workers and population. But a larger economy is not necessarily a benefit to natives.
- Making reasonable assumptions, the NAS report estimates that the actual benefit to the native-born could be $54.2 billion a year. But relative to the income of natives the benefit is very small, representing a “0.31 percent overall increase in income” for native-born Americans (p. 128).
- To generate that benefit, immigration has to reduce the wages of natives in competition with immigrant workers by $493.9 billion annually. But business gain $548.1 billion from these lost wages, for a net gain of $54.2 billion.
The same Democrats who promote giving the Chamber of Commerce cheap labor then turn around and pretend to champion the victims of illegal aliens by pushing for $15 an hour wages. The chamber is OK with that because it represents big business that can absorb the rising cost. The small businesses that compete with them cannot as easily absorb those costs.
The study also said, “immigrants do not pay enough in taxes to cover their consumption of public services at the present time. The NAS report presents eight different scenarios based on different assumptions about the current fiscal impact (taxes paid minus services used) of immigrants and their dependent children. All of the scenarios show that immigrants are a fiscal drain. The drain is as large as $299 billion a year.”
Since the election of Donald John Trump as president, American workers have enjoyed record-high employment, the lowest unemployment rate since we landed a man on the moon, and actual wage increases that beat inflation.
In promoting his Breitbart News story, Neil Munro tweeted, “Many Americans are already working in chicken processing factories, and more will take the jobs when low-wage illegals are sent home and the starting wages are pushed up. Another win for Econ 101: supply and demand.”
He is correct. Eliminating an illegal supply increases the demand for legal workers who cost more.
Illegal aliens help the 1%. Small wonder the 1% has the most vocal supporters of illegal aliens. Barbra Streisand wants cheap landscapers and maids, which is why Malibu is a sanctuary city.
And if we commoners object it is because we are deplorable.