The Undocumented Immigrant Tax: Enriching Americans from Sea to Shining Sea

Abstract

"Illegals do NOT pay taxes." As a law professor researching and writing about undocumented immigrants and their tax issues I see this comment in my email inbox and hear it during outreach efforts routinely. Every time I hear or read this or a similar comment, my whole body cringes. This short statement truly embodies the exploitation of the immigration debate. While this statement is often delivered from mainstream individuals, its origin can be traced to extremist rhetoric. Anti-immigrant and anti-Latino extremists have used outright bigotry to frame the immigration debate to advance their own supremacist agenda. By positioning themselves as legitimate advocates against illegal immigration in America these groups have broadened their base and mainstreamed their message. These groups "are frequently quoted in the media, have been called to testify before Congress, and often hold meetings with lawmakers and other public figures." As a result, in many American communities immigrants live in fear and suffer a toxic environment in which hateful rhetoric targeting immigrants has become an acceptable part of daily news and discourse. This Essay is an answer to this insidious vilification and arrant racism.

This Essay will debunk the short, but maladroit statement that "illegals do NOT pay taxes." First, calling a group of people "illegals" is hateful, "racially loaded, imprecise, and pejorative." Scholars, and children, understand that language and discourse can contribute to vile acts including crime, abuse and other social problems. Historical and current atrocities including the Holocaust, Darfur and the murder of Matthew Shepard are horrific examples of this intolerable truth. The term "illegals" is patently dehumanizing and inappropriate terminology, and its persistent use by extremists, as well as mainstream media and the general population, must stop now.

Second, as a low-income taxpayer and human rights advocate, I understand that pervasive misunderstanding regarding undocumented immigrants evinces the frustration and fear that many Americans feel about the challenging state of the U.S. and global economies. Restrictionists feed this frustration and fear with inflammatory propaganda about undocumented immigrants and our tax systems. Because of overwhelming complexity and lack of transparency in this system it is easy to misrepresent and distort the facts. As a result, some Americans believe the absolutely irrational and self-delusional assertion that undocumented immigrants do not pay any taxes. This gross falsehood is counterproductive for the speaker, the subject, and the U.S. and global economies.

Finally, as a tax professor I am charged with teaching tax and these comments broadcast loudly and boldly how misinformed Americans are about our tax systems. The well documented facts evidence that undocumented immigrants have paid hundreds of billions of dollars in American taxes to date. In most cases undocumented immigrants pay more in tax each year than similarly situated U.S. citizens. This additional tax, which is first exposed and labeled here as "the undocumented immigrant tax," is the subject of this Essay. This Essay will describe the depth and breadth of undocumented immigrants as a resource for tax payments made to government coffers across the country. The depth and breadth will be evinced by describing the myriad of different federal, state and local taxes undocumented immigrants are subject to and pay. But most notably this Essay will verify that not only do undocumented immigrants pay the same taxes that U.S. citizens and documented residents pay, but in addition they are subject to and pay what I am describing as "the undocumented immigrant tax." The undocumented immigrant tax is effectively an additional tax burden, a surtax or tariff on undocumented immigrants and their families. As a result, not only do undocumented immigrants pay taxes, but they bear a greater tax burden than similarly situated U.S. citizens and documented residents.

Keywords: Undocumented immigrants, illegals, Hispanics, Latinos, immigrants, tax, earned income tax, refundable child tax credit, social security, payroll taxes, economic stimulus refund 2008

JEL Classification: J15, J18, J71, J78, K34, K42, F15, H21, H22, H23, H31, H24, H55, I31, I32, I38