EM 244 - Illegal Immigration Notes

EM 244 - Illegal Immigration Notes - Economic Benefits of...

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Last year, Mr. Martínez paid about $2,000 toward Social Security and $450 for Medicare through payroll taxes withheld from his wages. illegal immigrant workers in the United States are now providing the Social Security system with a subsidy of as much as $7 billion a year. While it has been evident for years that illegal immigrants pay a variety of taxes o the extent of their contributions to Social Security is striking: the money added up to about 10 percent of last year's surplus - the difference between what the system currently receives in payroll taxes and what it doles out in pension benefits. Moreover, the money paid by illegal workers and their employers is factored into all the Social Security Administration's projections. Illegal immigration, Marcelo Suárez-Orozco, co-director of immigration studies at New York University, noted sardonically, could provide "the fastest way to shore up the long-term finances of Social Security." Starting in the late 1980's, the Social Security Administration received a flood of W-2 earnings reports with incorrect - sometimes simply fictitious - Social Security numbers. It stashed them in what it calls the "earnings suspense file" in the hope that someday it would figure out whom they belonged to. $189 billion worth of wages ended up recorded in the suspense file over the 1990's, two and a half times the amount of the 1980's. In the current decade, the file is growing, on average, by more than $50 billion a year, generating $6 billion to $7 billion in Social Security tax revenue and about $1.5 billion in Medicare taxes. Accounting for $56 billion in earnings, or about 1.5 percent of total reported wages. "Our assumption is that about three-quarters of other-than-legal immigrants pay payroll taxes," said Stephen C. Goss, Social Security's chief actuary, using the agency's term for illegal immigration. The typical legal immigrant and his/her offspring will pay a net $80,000 more in taxes during their lifetimes than they collect in government services.” By bringing new workers into the economy, immigration allows existing U.S. capital, land, and technology to be used more efficiently. Also on the plus side, immigrants pay property taxes, sales taxes, Social Security taxes, and income taxes In the negative column, immigrants use public services in the form of public education, fire and police protection, government assistance, etc. Add the positive and negative elements together and you get what looks like a very small number. raise incomes for factors that complement immigrant labor. Immigration, much like international trade and international capital flows, tends to raise global welfare.
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EM 244 - Illegal Immigration Notes - Economic Benefits of...

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