Good luck

It states that all illegal immigrants living in the United States would be required to "come forward to register, be screened, and, if eligible, complete other requirements to earn legal status, including paying taxes."

That's part of the new Democratic immigration plan.  What do they do with the immigrants who aren't liquid enough or solvent enough to pay ten years' back taxes, not to mention those who have no idea what they owe?

Just asking.  Does this plan contain a workable amnesty component at all, or is it just a border and employment clampdown?

There's more detail here, although no answer to my questions.

Comments

What they owe? My understanding has been taxes are regularly withheld even for employees with fraudulent social security numbers. Refunds and payments might be a washout.

"a workable amnesty component"

Such a thing does not exist.

No amnesty, thanks. A two-time proven losing strategy.

i'll respond for tg. I'd say many.

I worked for many years for a relatively small business (at most 250 employees). It was an apartments and dormitories company in an upper midwestern state. I worked in IT, but it was a very friendly company and I knew a lot of different folks, including the HR lady. This company only hired people above the table. They needed W-2s, they needed social security numbers, they needed drivers licenses and addresses.

I also had many friends and acquaintances out in the building staffs as well. And let me tell you, many of these low paid employees working in dining halls, cleaning services and maintenance were illegal immigrants. Whole families and clans. And they would occasionally be let go b/c their social security cards would turn out to be fraudulent or what have you.

But the point is, here were a lot of illegal immigrants paying at least their ss and medicare/caid taxes. And most didn't earn enough that they'd have any real income tax liability to speak of.

So there you have it. Yeah, maybe the guys who you pick up hanging around home depot to help with the tile or cut the grass and pay cash aren't paying taxes. But neither is the person hiring them paying employer portion of ss or medicare/caid. Lord knows, there are plenty of those folks out there. But there are also a lot of illegal immigrants who are half-way in the system, paying their payroll taxes at a minimum (and may not have any income tax liability), and who also own houses (and pay property tax) or rent (and pay property taxes through a middleman) or, you know, buy stuff to live (and pay sales taxes).

SOmething I will be interested to see going forward is how AZ likes life without illegal immigrants around. I believe there was a movie made about that a couple years ago last time this issue was hot. I have seen press reports that there are ~500k illegal immigrants in AZ, which is like 5-8% of the state population. And while not every illegal immigrant may leave, there may also be legal immigrants who don't like the hassle and decide to split.

If all those people pick up and go, who will replace them in both their jobs and their consumption of goods and services? And their tax revenues (property, sales, otherwise)? It's like a reverse of Ross Perot's giant sucking sound.

If all those people pick up and go, who will replace them in both their jobs and their consumption of goods and services? And their tax revenues (property, sales, otherwise)? It's like a reverse of Ross Perot's giant sucking sound.

You've got to be kidding me? Any state should be so lucky to be rid of 500,000 of their least performing residents in one feel swoop.

At any rate, the "pay taxes" provision appears to be a red herring (so typical of "comprehensive immigration reform" debate). The proposal states that:

After eight years, individuals who have been granted LPI status will be permitted to apply for adjustment of status to lawful permanent residence (LPR), provided that they can demonstrate that they meet criteria related to...payment of all federal income taxes, fees, and civil penalties...

In other words they must demonstrate that during the 8 years after they were granted temporary legal status under the amnesty, they were paying their taxes. Not a particularly high bar to reach.

...turn around the housing market due to construction costs going through the roof

Yes - increasing costs of inputs is always a boon to manufacturing. Wow. This is an economics blog? The dreadful quality of the comments here never ceases to amaze me.

The Democrats talking up amnesty is a scam. The Bush Administration tried to shove amnesty and guest worker programs through in 2001, 2004, 2006, and 2007 and failed each time. Why did Bush, Rove, McCain, Kennedy, and the rest of the DC insiders fail repeatedly? Because American voters oppose it. Are they really going to be for it when unemployment in California, the most immigrant state, is 12.5%?

No, what the Democrats have been doing for the last 18 months -- announcing that amnesty is coming Real Soon Now -- is a scam. The goal is to keep unemployed illegal immigrants from going home to be with their families until after the Census count is over. The Democrats want the maximum number of illegal immigrants counted in the Census for reasons of redistricting, maximizing quotas, and intimidation. So, they keep hinting to them that if they go home now (because it's cheaper to be unemployed in Mexico than in America), they'll miss out on eligibility for the upcoming amnesty.

It's a scam.

I think the illegal ones are by definition pretty productive and liquid. If I want to be illiquid today I need to either find a big loan or a Credit Card.

Being illegal both options ought to be out or at the very least pretty difficult. So I don't see a big problem with illiquid immigrants.

"You've got to be kidding me? Any state should be so lucky to be rid of 500,000 of their least performing residents in one feel swoop."

GDP/capita might rise, but GDP surely would fall, as well as aggregate demand. I'm not sure in what world you live in where a state that suddenly experiences a recession due to (real, not nominal) demand shocks is "lucky."

@ziel. Prices will go up. I was being sarcastic.

Economically though it is interesting to me that most of the anti-immigrant sentiment is from the white side of politics. Shouldn't the marginalized, lower-income black population be the one that is more threatened by the immigrant influx? When was the last time you heard of a illegal immigrant influx trying for white-collar, high paying jobs?

ummmm, Rahul, I don't think know this issue well.

African Americans and Mexicans, for the most part, do NOT exactly get along well.

I admire people like Jesse Jackson who try to build a strong coalition, but it's an uphill battle (There's a long tradition of animosity between minority groups worldwide).

@SteveSailer and thehova:

Your points make sense.

But ultimately it was Arizona that went with the recent legislation and not a more black state.

It is interesting though that although there is animosity they have to have a strong common ground on the basis of issues like poverty, racial discrimination, leftist ideology, low-incomes, lower-education etc.

Put yourself in the shoes of, say, a 3rd generation Mexican-American blue collar worker, such as a carpenter.

An influx of carpenters from south of the border raises the supply of carpenters, so you suffer opportunity cost losses in your wages. If you don't speak Spanish, you might find yourself not being hired at all for construction crews where Spanish is the lingua franca of the worksite.

On the other hand, if you are smart and aggressive and speak Spanish, you can turn yourself into a contractor, employ a lot of illegal aliens, cheat on taxes, cheat on safety regulations, undercut more legit contractors, and make a lot of money. If you are really hot stuff, you can become a developer, maybe hooking up with some subprime mortgage broker outfits, donate to local politicians -- the sky's the limit. You can send your kids to a nice liberal arts college on a quota, where they can major in Ethnic Studies, and get jobs in the Diversity Industry demanding more quotas and more illegal immigration to justify their quotas.

Not surprisingly, we hear far more from the second type of Hispanic-Americans -- the hard-chargers who profit off illegal immigration -- than from the first type -- the proletarians who are victimized by it -- even though the first type greatly outnumber the second type.

Tyler, the immigration crisis is like a financial crisis in the sense that it involves a stock problem (the millions that are now illegally) and a flow problem (the expectation of many illegal immigrants to continue flowing into your country) and therefore you have to solve first the flow problem and then deal with the stock problem. Clearly the 1986 reform failed to addressed the flow problem. Only when a majority of Americans feel comfortable that the flow problem is being properly addressed, they will be willing to consider a serious amnesty to deal with the stock problem. Indeed politicians are so inept and corrupt --especially the elected politicians of the current Congress-- that they will not offer a solution to the flow problem and instead will reluctantly offer nonsense amnesties as the one you mention to reduce the stock.

Given the prospects of the American economy and society relative to the prospects of Southern neighboring countries you can bet that for many decades there will continue to be strong pressure for people to migrate into your country and no wall will be high and thick enough to deal with this pressure. I don't expect your politicians to have the courage to address the flow problem seriously so you will have to live with the immigration problem for a long time.

What worries me about illegal immigrants much more than the jobs they "take", etc., is the fact that they and their children do not undergo health screenings when they come to this country, especially for TB.

@Steve Sailor:

I agree with you. Quotas are bad. You have a strong point. The elite Hispanics might have vested interests but I think a side effect is that they benefit the low-income Hispanics and the general US interest unintentionally. I cannot see many low-income carpenters who'd be better off had they not been in the US illegally.

A letter, written by Alex (and David J. Theroux) and signed by Tyler, on immigration: http://www.independent.org/newsroom/article.asp?id=1727

"Shouldn't the marginalized, lower-income black population be the one that is more threatened by the immigrant influx? When was the last time you heard of a illegal immigrant influx trying for white-collar, high paying jobs?"

It's not the lower-income black population who is paying for all the immigrant's schooling and medical payments.

I'm always amused by how I get accused of being "ugly" or whatever by people who appear demented with rage.

Rahul, there is nothing axiomatic on what I'm saying. The American immigration problem is both the stock of millions of illegal immigrants and the expectation of a high flow of illegal immigrants for a long time. I've lived in several countries so I know what a legal immigrant is --now I live in Chile as a legal immigrant.

FYI, I'm in favor of facilitating a much larger flow of legal immigrants into U.S.A., but nothing I said in my earlier comment is conditioned on this preference.

@steve sailor

you build a convincing story against quotas for racial minorities. please apply the same to dumb as rocks children of rich white folks who end up in high paying jobs because of legacy scholarships and daddy's or frat bro connections and I'll start to believe you are not a racially motivated bitter person.

lorena, yeah. im a rich dumb white guy who has a good job merely because i look the part. im not being sarcastic. im a drunk lazy fuck that gets by, i can only guess, because i look the part. take that isteve.

"But ultimately it was Arizona that went with the recent legislation and not a more black state."

You don't think geography might have a little to do with that? Alabama isn't on the Mexican border, after all.

@ziel:

I should have said: "In the economic sense, is immigration problem axiomatically?"

I can agree with the "national identity" viewpoint but I am not sure about the "prosperity" argument. It's all about the size of the pie. Why look at it like a zero sum game? Yes, poor people will move into a richer nation but has the average per/capita statistic (wealth, GDP, income, std. of living) of the original occupants always gone down? I seriously doubt that.

Even if you admit the duty of a nation to preserve its identity, is that duty overriding even at the cost of, say, productivity, trade, income etc.? Would you rather have a poorer nation with a well-preserved identity or a changing nation but a prosperous one?

@CM79:

Then allow no immigration. :) Perhaps not even legal immigration. At least on economic grounds.

@ Rahul

It's all about the size of the pie. Why look at it like a zero sum game? Yes, poor people will move into a richer nation but has the average per/capita statistic (wealth, GDP, income, std. of living) of the original occupants always gone down? I seriously doubt that.

Maybe sometimes per/capita wealth of the original occupants goes up and maybe sometimes it goes down. Maybe a lot of factors are involved. Lets look at the particulars of this situation, illegal immigrants make low wages and have poor educational performance, including subsequent generations. The US has a high degree wealth transfer (education, emergency care, etc...), a declining need for unskilled labor (rust belt), and a litigious race based legal system?

So maybe you should answer the question of why you think 10s of millions of unskilled immigrants is going to expand the pie for the average American? And if you are not sure about it, why should America take the chance?

"i employee illegals happily and will continue to.

Bock, you realize pretty much everyone thinks that someone who writes this is an asshole, right? You're happy that you can not employ Americans and save money doing so. I do not think that the civil war you've predicted will work in your favor."

Ok. You don't think it's good to employ illegals? Here's what you can do about it: boycott restaurants. You're just helping employee illegals every time you eat out.

I'm not rich enough to employ Americans to mow my lawn, clean my toilet, cook my food (in nearly every restaurant in town), to build a new house i might want to buy, to pick my strawberries, or to repair my roof. I simply can't afford the "legit contractors" iSteve seems to think exist. So I am happy someone is willing to do this for a price I can afford. I would be lying if I said otherwise. Or do you make a special effort to go to the restaurants where you are willing to pay more because they are "legit"? And where are these restaurants? Who are these legit contractors?

Taxes - the back taxes seem a bit strange to me - my understanding is that indeed many unregistered immigrants do have fake social security numbers and thus pay payroll taxes (without actually accruing benefits). I think most likely fewer have W-2s - but considering that most of them have families and relatively low wages I'd guess they wouldn't pay much (if any) income tax in the first place - in many cases they'd probably be eligible for EITC... so that does indeed seem like a silly proposal

and Steve - you've made your name around the net as as one of the prime examples of a pseudo-scientific (with scientific in the broadest sense) racist. I mean - it's not just the usual suspects like the Southern Poverty Law Center
http://www.splcenter.org/blog/2008/07/25/extremist-steve-salier-is-source-for-cnns-black-in-america-series/
you've managed to have the good folks at National Review calling you a disgusting racist:
http://corner.nationalreview.com/post/?q=NTIyMThlNmMzNThiZjM4MjQzODUzM2JlZTIzMWJhYjA=

I don't know if you're personally angry, and frankly I don't care, but I'm quite happy other people still get angry at what you write. Because sometimes anger still is the better side of reason.

Most immigrants, legal or illegal, have been paying income taxes. They most likely were working with a fake SS number, as a SS number is required to work even at a car wash, restaurant, or hotel. Taxes were taken out of their paychecks by their employers. The government knew/knows all these numbers are fake but they of course take the tax contributions. Likely this is taken into consideration, and most will not owe that much, if any, back taxes. The fines are another matter.

Ok. You don't think it's good to employ illegals? Here's what you can do about it: boycott restaurants. You're just helping employee illegals every time you eat out.

Bock, aside from the question of whether or not it's "good", you've written that you're happy to hire illegals at the expense of your fellow Americans. Yes, "Fuck you, my fellow Americans, I'm happy paying illegally low wages" is a very unpopular message. I do not think you will want to be keeping that during an immigration debate. It's one thing to exploit a terrible immigration policy. It's another thing to be happy that you're screwing your fellow citizens by doing so.

My problem with making immigrants pay taxes is that, while many assume that addresses my point #2, I actually think the government, certainly these days, is the opposite of what makes America The Beautiful.

It's interesting that there is zero economic analysis of immigration on an economics blog. Why does analysis of the effects of strictly regulated labor markets go out the window when this issue is brought up? Why is no one pointing out the massive inefficiencies of regulated borders? Why isn't Tyler or Alex making the standard econ 101 argument that when government restricts labor mobility, prices go up and overall living standards go down?

In short, why is no one angered by these socialist laws that Arizona is trying to enforce? Where did the freedom-loving MR readers disappear to?

@ libert,

Substituting birth for immigration is neither clever nor interesting. A strong motivation for people to invest in society is to provide for their children, ie they built something nice so they could give it to their children.

Why are those the only two possibilities? What if said productivity was tied directly to a successful, well-preserved identity?

I'd say you haven't been to Armenia.

@careless:

"better for society"

Mexican society too?

Careless: it is Bock's money; why is someone entitled to it simply because he has a "born in the USA" sticker on his passport? He's not "screwing" anyone over, at least, not to any extent greater than if he had chosen to not spend his money on those services at all. As Margaret Thatcher put it, "there is no society", just what you and I agree to. I've known enough yuppies, idiots, and generally unproductive folks to tell you that if your measure of "good" (for society or otherwise) is based on holding citizenship in higher esteem than character, productivity, and work ethic, then I would say that yours is a strange concept of morality, and one not subscribed to by most Americans, judging by the number of products from overseas that we purchase, when there are more expensive, US-produced substitutes.

Uh, 10 million people a year? That is a new megalopolis a la Sao Paulo every year! How do you want to house such a host of people? Who, pray, will teach them English and the basic civic knowledge of the USA - what kind of laws are respected, how business is done etc.? And people need this kind of information, especially if they come from the third world. Ever tried to pursue American dream while being illiterate Somalian whose only work experience so far was to be an auxiliary for a pirate vessel?

Also, there is no infrastructure for such explosive growth, especially as the people would probably come with little money and not every of them would have enough skills to find a decently paying job or start a business - so everything from garbage collection up to potable water would have to be subsidized by the taxpayer.

Look at Toronto, Canada, which accepts about 100,000 people per year, and already has the doubtful primary to be the first city with real favelas north of Rio Grande.

P.S.: 180 million is probably very low estimate. Of the 1200 million Africans, I would expect at least 500 million to prefer emigration from their war-and-disease ridden continent. Add poorer parts of Asia and Latin America, get a number close to one billion.

Why precisely do you want to turn American continent into an equivalent of the Ganges delta? One is already enough, or not?

David, maybe I am looking at it from different perspective, but European immigration story has enormous list of difficulties, especially with two categories of people:

a) unskilled labor pool from places like Rif mountains in Morocco, where the Moroccan king was actually quite happy to export the young men away (the population being notorious as trouble-makers for centuries),

b) highly educated ideological radicals, such as membership of Hizb-ut-Tahrir in formerly Great Britain (as the bitter joke among the English goes).

If you could manage to import computer programmers, engineers, etc. only, and exclude hostile individuals from that lot, then I would believe that your plans could be effective. (Though it would probably lead to international protests, as no country likes being combed for talent by an external power). Or, if you managed to cut down the welfare system enough, to make people actually take care about themselves. But I think that American welfare system is already too expanded.

BTW have you ever lived in Israel? From what I've read and heard, immigration of Ethiopian Jews and ex-USSR people led to quite a social conflict between them and the established society.

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