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Undocumented Immigrants Paying Taxes?

In terms of the President’s income taxes, Twitter (and other more mainstream media)[1] has been of course alight with all sorts of buzz as to how much you pay in income taxes relative to the President, how much I pay, and so on.  But the one Tweet that did catch my eye, and it quickly became more than one, is how much in income taxes undocumented immigrants pay to the federal government each and every year.  According to this Tweet (and it was from someone who I do not follow, but who was re-tweeted by someone I do follow), undocumented immigrants paid $27,000,000,000.00 in taxes in 2017. (I have no idea whether this Tweet is factually accurate.)  President Trump, according to the New York Times’ article, paid a mere $750.00 in federal income taxes.  So I’ve done some digging.

Let me paint a picture for you.  Often I will have a potential client in my office who is looking for a way to lawfully stay in the United States.  While assessing his or her circumstances, more often than not they will tell me that they’ve worked in the United States for a number of years (sometimes many many years) and have always paid taxes.  They’re also able to document that for me too.  They pay taxes for any number of reasons, including just wanting to do the right thing.

 Undocumented immigrants pay taxes either using an Individual Taxpayer Identification Number (“ITIN”), which over the years has evolved in terms of who was eligible to obtain one.  Some, of course, use other people’s Social Security Numbers.  Some use fake Social Security Numbers.  The takeaway, however, is that they’re paying taxes into a system that most will not get any benefit from.

Current data is difficult to come by.  In a 2014 Internal Revenue Service (“IRS”) Nationwide Tax Forum, the IRS estimated that individuals using ITIN’s paid over $9 billion in withheld payroll taxes annually. According to the IRS, in 2015, 4.4 million people paid $23.6 billion in total taxes using an ITIN.[2] Because undocumented pay into a system that they are not eligible to collect benefits from when they retire, in 2010, $12 billion more was collected from Social Security payroll taxes of undocumented workers than were paid out in benefits.[3]

 According to the Institute on Taxation and Economic Policy (“ITEP”), undocumented immigrants paid $11.6 billion in state and local taxes in 2013, which includes $7 billion in sales taxes, $1.1 billion in state income taxes, and $3.6 billion in property taxes.[4]

 The clear take away is that undocumented immigrants are paying a substantial amount of incomes taxes (both state and federal), as well as other types of taxes too (e.g., property taxes, sales tax, etc.), including, according to one report, tens of thousands of dollars by prior employees of one or more of Trump’s own companies.[5]

We can debate all day long whether the President’s position that he’s practicing smart tax avoidance, using lawful means to deduct legitimate business expenses, losses, etc., is appropriate.  There is, however, something that does not sit well with me (anyway) when undocumented immigrants are paying so much into a system that they will likely never benefit from, and our President is paying in so little.

Let that sink in.


[1] See, e.g., https://www.washingtonpost.com/nation/2020/09/28/trump-taxes-returns-comparisons/.

[2] National Taxpayer Advocate, Annual Report to Congress, Vol. 1, Internal Revenue Service, 2015, 199-200, https://taxpayeradvocate.irs.gov/Media/Default/Documents/2015ARC/ARC15_Volume1.pdf.

[3] “Effects of Unauthorized Immigration on the Actuarial Status Of the Social Security Trust Funds,” by Stephen Goss, Alice Wade, J. Patrick Skirvin, Michael Morris, K. Mark Bye, and Danielle Huston (Actuarial Note, No. 151, April 2013),  Social Security Administration, Office of the Chief Actuary, Baltimore, Maryland.

[4] “Undocumented Immigrants’ State & Local Tax Contributions”, by  Lisa Christensen Gee, Matthew Gardner, and Meg Wiehe, Washington, DC: Institute on Taxation and Economic Policy, February 2016, http://www.itep.org/pdf/immigration2016.pdf, p. 2.

[5] See, e.g., https://www.nydailynews.com/news/politics/ny-undocumented-trump-workers-paid-taxes-20200930-xjak5swyq5hjnnuop5cu7ipal4-story.html

Immigration Reform by Executive Action: What Did Obama Actually Do?

boydadimmigrationrally

So, the President finally did it.  On November 20, 2014, President Obama announced a series of actions (not executive orders as it turns out) that his administration is taking to “fix” what he has repeatedly described as a “broken immigration system.”  These actions involve, among other areas, border security, providing a temporary status (commonly called “deferred action”) for some aliens who are currently unlawfully present in the United States, and future legal immigration.  So what did the President actually do?  I’m glad you asked.

Border Security.  Likely to placate those on the right, and certainly consistent with this Administration’s record level of deportations, the President announced he is implementing a “Southern Border and Approaches Campaign Strategy” which the Administration argues will “fundamentally alter” the way in which it marshals resources to the border.  We’re informed that this will involve the U.S. Department of Homeland Security (“DHS”) commissioning of three (3) task forces, consisting of various law enforcement agencies, which will focus on the southern maritime border, the southern land border and West Coast, and investigations to support the other two task forces. The primary objectives of this new strategy is increasing the risk of engaging in or facilitating illegal transnational or cross-border activity, interdicting people who attempt to enter illegally between ports of entry, and preventing the illegal exploitation of legal flows (e.g., alien smuggling at ports of entry).

Aliens Unlawfully Present in the United States.  The centerpiece of President Obama’s announcement, and no doubt the most controversial, is to grant deferred action (basically temporary relief from removal) to some aliens who are unlawfully present in the United States (i.e., those who were brought to the United States as children and raised here, or those who have children who are U.S. citizens or lawful permanent residents (“LPR’s”)).

In addition, President Obama expanded a program his administration announced in June 2012, known as Deferred Action for Childhood Arrivals (“DACA”).  That program allowed aliens who were unlawfully present in the United States, and who had been brought to the United States as children and met other criteria, to also receive deferred action and, in many cases, employment authorization.  DACA, as originally proposed, expressly excluded aliens who were unlawfully present aliens and who were over 31 years old, or who had entered the United States on or after June 15, 2007.  Under President Obama’s recent action, aliens who are over 31 years old, or entered the United States between June 15, 2007, and January 1, 2010, could receive deferred action.  The President’s recent initiative would also extend the duration of grants of deferred action (and work authorization) received by DACA beneficiaries from the current two years, to three years.

As noted above, aliens who are unlawfully present in the United States who have children who are U.S. citizens or LPR’s will also be eligible for deferred action (and employment authorization) provided they can show (1) “continuous residence” in the United States since before January 1, 2010, (2) physical presence in the United States both on the date the initiative was announced (i.e., November 20, 2014) and when they apply for deferred action, (3) not being an enforcement priority under the administration’s newly announced priorities, and (4) they present no other factors that, in the exercise of discretion, makes the grant of deferred action inappropriate.  Individuals who are granted deferred action pursuant to the President’s initiatives, or otherwise, are eligible for employment authorization provided they can show “an economic necessity for employment.”

There were other provisions which addressed aliens who are unlawfully present in the United States too, but these are the big ones.

Legal Immigration.  The President also announced certain initiatives intended to affect aliens who are lawfully present in the United States, and which was described by the President as supporting high-skilled business and workers.  One such provision is to ensure that all immigrant visas (basically “Green Cards”) which are authorized by Congress in a given fiscal year are actually issued.

Yet another initiative that the President announced is expanding the duration of “optional practical training” (“OPT”) available to F-1 nonimmigrant students in the United States studying science, technology, engineering, and mathematics (“STEM”) fields at institutions of higher education in the United States, as well as expanding the actual degree programs that are eligible for OPT.

Again, there were other provisions which the President announced in this category.

I realize the President’s actions are very controversial, and a lot of people are unhappy with them.  As I’ve said before, and I’ll say it again, our immigration system is broken and it desperately needs to be fixed.  In a perfect world, Congress would pass meaningful, comprehensive and bipartisan legislation, and send it to the President for his signature.  That has not happened for way too long. So I suppose this is the next best thing.

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