Illegal Immigrants and Taxes: Refuting the Myth

One popular mantra of the anti-immigration contingent is that illegal immigrants are a financial drain on our country. Opponents of immigration reform claim that illegal immigrants take more than they give--that they don't pay taxes but benefit from our public services. Anyone who has taken the time to actually analyze this claim would realize that it is nothing more than inflammatory propaganda. It's great because it makes sense to the average Joe who may not investigate the source of the claim and it will incite and anger most people.

However, the truth is that most illegal immigrants do pay taxes. Although many employers may not diligently investigate the immigration status of their employees (some simply look the other way), most all require proof of authorization to accept employment in the U.S. As a result most illegal immigrants have counterfeit social security cards and other documents. These can be easily purchased in any large city for a few hundred dollars. Thus, in most cases even illegal immigrants are paying federal and state taxes.

The problem arises during tax season when the IRS determines that the social security number provided by the employee (illegal immigrant) does not match up to their records. The IRS usually gives the employee the option of obtaining an Individual Tax Identification Number (ITIN.) (The ITIN was created in 1996 so to ensure that people without social security numbers could pay taxes.) Once the illegal immigrant has obtained his or his ITIN they file their return in the normal fashion. Thus, most illegal immigrants do pay taxes.

From 1996 to 2003, people filing tax returns using an ITIN contributed in excess of $48 Billion to the U.S. coffers. In 2005 alone, the IRS received over 1.5 million applications for ITINs. I am sure there are just as many if not more U.S. Citizens that do not pay taxes as there are illegal immigrants who do not pay taxes. Remember, most of these people come to this country to work and when they work they pay taxes whether or not they are legally authorized to work. Not surprisingly, the IRS is not too concerned about a taxpayer's legal status when collecting taxes.

There has been much discussion of this issue. Opponents respond by claiming that the fact that illegal immigrants use false information to file and obtain a tax returns means that they probably also cheat on their taxes. This makes no sense. To the contrary it seems more plausible that one who is in the country illegally would be very cautious to obey the tax laws and avoid drawing attention to himself. If anything, the illegal immigrant will simple forfeit his return and avoid the risk.

The claim that illegal immigrants do not pay taxes and are a strain on our tax base is simply not supported in fact. It is important for all involved in this debate to careful analyze the claims that are being made by the anti-immigration movement in this country.