The Value of Illegal Immigrants
By: Gerri L. Elder
Many Americans consider themselves anti-immigration because of concerns about the amount of money the government spends on social services for illegal immigrants. However, pro-immigration activists point out the many benefits of having immigrants in our society because of the important role they play in our economy. The Houston Chronicle has brought up another way that the United States is benefiting from illegal immigrants, and it is something that many people simply never considered.
On or before April 15 each year, Americans who have an income are required to file a federal tax return with the IRS. For some people this is the day to pay up income tax obligations, but for millions of people filing a tax return means that a nice tax refund check will soon be in their mailboxes. Employers make tax deductions from employees' paychecks automatically and many people are entitled to have some of that money back because their tax burden is not as much as the amount that was deducted from their paychecks. For illegal immigrants who work in the U.S., the money is deducted and many are entitled to state and federal tax refunds; however, these refunds go largely unclaimed. Illegal immigrants also pay into the Social Security system, although they will never receive a Social Security check.
These unclaimed tax overpayments and Social Security tax payments that are made by illegal immigrants who are too afraid of being deported to file tax returns amount to income for the federal government. There is no solid figure as to how much income the federal government receives from illegal immigrants, but the latest estimates indicate that it will amount to billions of dollars in federal income, Social Security and Medicare taxes this year alone.
The Internal Revenue Service does not inquire about immigration status, but many illegal immigrants fear that by filing a tax return, they are risking deportation. Therefore they do not claim the tax refunds that they are owed. Economists estimate that there are hundreds of thousands of immigrants who do not file tax returns and collect their tax refunds.
It is estimated by the Social Security Administration that approximately three-quarters of illegal immigrants who work pay taxes that benefit the Social Security and Medicare systems. For 2005, people who filed W-2 forms with incorrect or mismatched data, many who are illegal immigrants, accounted for $75 billion in wages - and $9 billion in taxes paid.
All of this money being paid in by people who will certainly never benefit from Social Security contributes to the overall solvency of the system. While we have been told for years that Social Security will be wiped out and bankrupt before many people who are currently paying into the system will be able to collect, illegal immigrants are helping keep the system afloat. Under federal law, illegal immigrants may not collect Social Security benefits but the money that they pay in is helping cover the Social Security checks that more and more baby boomers are collecting.
So while many people can only find negative things to say about illegal immigrants, economists agree that these people are a net benefit to the economy. Perhaps the value of receiving a Social Security check should be taken into account before anti-immigration activists plan that next immigration protest rally.