Illegal alien back taxes
It’s hard to deny the mounting political pressure for some sort of “comprehensive immigration reform.” We are told that polls reveal a majority of Americans now favor “a path to legal status” for “undocumented people,” with 52 percent support appearing in one NBC News/Wall Street Journal poll, while a separate poll commissioned by immigration reform activists says it’s more like 63 percent.
Republican politicians are convinced that support for amnesty is now required for their political survival, even though immigration reform wasn’t even one of the top three issues for Hispanic voters in the last election. (The really bad news is that everything they do list as a top policy preference is even more antithetical to Republican positions on limited government, free-market growth, and individual liberty. And that’s the legal Hispanic citizens.)
There are even polls that show a majority of Republican voters support the idea, and not all of them are recent. Fox News had one in December 2011 that said 57 percent of registered Republicans supported “a path to citizenship if the person meets requirements such as paying back taxes and learning English.” The latest Fox poll pegs Republican support at a fairly consistent 56 percent, with 66 percent support overall.
As it happens, requirements such as “paying back taxes, learning, English, and passing a background check,” favored by respondents to the Fox News poll, are frequently mentioned in discussions of the evolving bipartisan comprehensive immigration reform compromise. In fact, it seems like poll respondents are never asked for their opinion of amnesty without such conditions. If they are, the results are never reported. That’s curious, isn’t it? Because such restrictions are hardly guaranteed to be incorporated into any immigration reform bill that gets through the House, Senate, and White House.
And even if they do make it into the final bill, these extremely popular requirements for amnesty might not work out in practice. The “back taxes” idea is especially dubious – so dubious that it’s unlikely amnesty enthusiasts have thought it all the way through.
To take the obvious problem first, a lot of these people are dirt-poor, and would have trouble coughing up back taxes on any sort of realistic repayment plan, let alone the additional “fines” sometimes mentioned as a condition of amnesty. If the back tax requirement really does become part of an immigration bill, expect it to immediately become a primary target of activists and their Democrat political allies, who will be happy to caricature Republicans as the child catchers from Chitty Chitty Bang Bang. Rounding up the most desperately poor “provisional citizens” and stuffing them into windowless vans for deportation, eh? You heartless monsters. Remember, the Democrat Party thinks forcing poor people to shoulder the cost of transportation to pick up a free voter-ID card is a civil rights violation.
Then there’s the related question of exactly how much in “back taxes” an impoverished long-term illegal alien would owe. How would that figure be computed for someone who illegally crossed the border in, say, 1989? What tax rates and exemptions would be used? And how in the world would we determine the amount of income to be taxed? It’s quite possible that illegal aliens who worked under the table in the United States for a number of years honestly wouldn’t know how much they had been paid. And how would any number they saw fit to provide be verified? Every legal employee is required to obtain documentation from his employer and carefully fill out tax forms, under the threat of stiff penalties for incorrect filing. What would the “undocumented worker” version of this process look like, given that their black-market employers would probably have no paperwork to submit… and would be confessing to a serious crime if they did? Even if they also receive amnesty for their crimes, they might not feel motivated to put out a lot of effort on behalf of their former employees.
Let’s say we end up with some encouraging percentage of exceptionally helpful “provisional citizens” who get in touch with their even more exceptionally helpful past employers and produce a reasonably accurate account of their illegal income. Just how much in “back taxes” do you suppose these people would pay? Nearly half of the legal population completely escapes income taxes. Many of them qualify for tax credits.
We might still aspire to collect Social Security and Medicare taxes from them (would they retroactively enjoy the benefits of the partial Social Security tax holiday that just ended?) but that’s a lot of money, projected over a 10- or 20-year work history for the parents of those born-in-the-USA “Dreamers” we hear so much about. And what about state and local taxes? A legal U.S. citizen would have paid a bundle in such taxes over the course of several decades, possibly to several different tax authorities they resided in. How could such taxes be fairly assessed against our new provisional citizens?
And who verifies this mountain of thinly-documented tax data from our 12 million new citizens? Maybe the reason President Obama has been surprisingly warm toward the back-taxes idea thus far is that he’s dreaming of the giant army of new IRS agents he’ll need to hire. It might even be bigger than the army he hired to implement ObamaCare.
Given that the task of carefully computing and validating back taxes for illegal aliens borders on absurdity, perhaps we’ll just figure up some arbitrary but “fair” total for them to pay. But won’t that invite legal challenge? The government isn’t supposed to conjure tax bills for certain people out of thin air, even when it’s trying to come up with very low bills for them.
Once a tax bill has been cobbled together, we’d have to ensure the newly legal populace paid it. Contrary to the fearsome reputation of the IRS, the government isn’t actually very good at that, especially when it’s policing anyone except terrified middle-class employees and small business owners. Tales of tax fraud are rampant every year. In fact, illegal aliens grabbed $4.2 billion in fraudulent tax credits in 2011. This is not a system that’s likely to fare very well against a large, politically influential population whose pre-amnesty existence was defined by its willingness to ignore inconvenient laws. It’s supposedly impossible to reduce the illegal population through enforcement – that’s why we’re talking about granting them amnesty. But now we’ll suddenly be able to track them well enough to squeeze both current and back taxes out of them?
If we’re too aggressive at imposing and collecting back taxes, we’ll just end up pricing amnesty beyond the reach of the undocumented… returning us to exactly where we sit now, with powerful political organizations insisting that crackdowns against scofflaws are xenophobic. There are some who theorize that an attractive, affordable amnesty option will thin the ranks of the defiantly undocumented enough for law enforcement to take over and begin cleaning up the remainder. But isn’t it more likely that our already inadequate immigration services will be further trimmed down after amnesty passes… and won’t the people they chase down be portrayed as the innocent, impoverished victims of draconian conditions for citizenship they couldn’t meet? That sounds like a good wedge issue to deploy against stunned Republican comprehensive immigration reformers in 2014 or 2016.
Taking all this into account, the “back taxes plus a fine” restriction seems a good deal less workable… which means our media organizations really shouldn’t be automatically including it when they describe that “path to citizenship” to voters.