Financial Immigration Federalism
52 Pages Posted: 6 Sep 2019
Date Written: 2019
Federal preemption doctrine constrains state power over undocumented immigrants. As courts and commentators focus on disputes over policing and removal, led by sanctuary cities and states, they overlook what I call “ﬁnancial immigration federalism.”
This Article uncovers emerging forms of ﬁnancial immigration federalism while also reconsidering familiar forms. Federal tax legislation explicitly eliminated certain tax credits to undocumented immigrants, but states continue to explore expanding them—including by incentivizing employment that is considered illegal under federal law. State entities have supported long-term, owner-occupancy mortgages to undocumented immigrants, which the traditional government-sponsored enterprises do not purchase. And undocumented immigrants, including those with legal work authorization, have long been excluded from federal lending markets for higher education, a vacuum that states have ﬁlled with divergent policies. In each of these markets, states and localities act to both expand and limit ﬁnancial options to undocumented immigrants, a form of immigration federalism.
To analyze tensions between preemption and state sovereignty at the heart of ﬁnancial immigration federalism, this Article uncovers the legal questions arising from states extending ﬁnancial beneﬁts to undocumented immigrants, particularly when conditioned on employment and long-term residency. I argue that competing deference regimes, including to state and local tax policy, should play a role in resolving the constitutionality of subnational ﬁnancial sanctuary (or purgatory). I also consider the case for incorporating subnational intent, as opposed to just congressional or federal intent, in analyzing ﬁnancial immigration federalism.
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