FOR BEAU

DISCLAIMER: I AM NOT AGAINST IMMIGRATION.  IF IT WERE NOT FOR IMMIGRANTS THIS COUNTRY WOULD NOT HAVE EXISTED.  HOWEVER, I AM AGAINST ILLEGAL IMMIGRATION.  THE FACTS BELOW CORROBORATE MY STANCE ON THE ISSUE.  THIS COULD BE ONE OF OUR MANY PROBLEMS.  

FOR THE COMPLETE COPY GO TO THIS LINK ---- http://www.cis.org/node/54

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Table of Contents

Executive Summary
A Complex Fiscal Picture
Policy Implications
Summary Methodology

Introduction
Why Study the Fiscal Impact of Illegals?

Methodology
Data Source and General Principles
Estimated Tax Payments
Assigning Costs by Household
Adjustment for Under-Reporting in the CPS

Findings
Demographic Overview
Estimated Tax Payments
Costs by Household
Balance of Tax and Cost
The Fiscal Implications of Amnesty
Comparisons to Other Studies

Conclusion

Appendix

About the Author

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About the Author
Steven A. Camarota is Director of Research at the Center for Immigration Studies in Washington, D.C. He holds a master's degree in political science from the University of Pennsylvania and a Ph.D. in public policy analysis from the University of Virginia. Dr. Camarota often testifies before Congress and has published widely on the political and economic effects of immigration on the United States. His articles on the impact of immigration have appeared in both academic publications and the popular press including Social Science Quarterly, The Washington Post, The Chicago Tribune, Campaigns and Elections, and The Public Interest. His most recent work published by the Center for Immigration Studies includes: Immigration in a Time of Recession: An Examination of Trends Since 2000; Where Immigrants Live: An Examination of State Residency of the Foreign-Born; Back Where We Started: An Examination of Trends in Immigrant Welfare Use Since Welfare Reform; and The Open Door: How Militant Islamic Terrorists Entered and Remained in the United States, 1993-2001.

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Executive Summary

This study is one of the first to estimate the total impact of illegal immigration on the federal budget. Most previous studies have focused on the state and local level and have examined only costs or tax payments, but not both. Based on Census Bureau data, this study finds that, when all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion.

Among the findings:

Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.

Among the largest costs are Medicaid ($2.5 billion); treatment for the uninsured ($2.2 billion); food assistance programs such as food stamps, WIC, and free school lunches ($1.9 billion); the federal prison and court systems ($1.6 billion); and federal aid to schools ($1.4 billion).

With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services.

On average, the costs that illegal households impose on federal coffers are less than half that of other households, but their tax payments are only one-fourth that of other households.

Many of the costs associated with illegals are due to their American-born children, who are awarded U.S. citizenship at birth. Thus, greater efforts at barring illegals from federal programs will not reduce costs because their citizen children can continue to access them.

If illegal aliens were given amnesty and began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2,700 per household to nearly $7,700, for a total net cost of $29 billion.

Costs increase dramatically because unskilled immigrants with legal status -- what most illegal aliens would become -- can access government programs, but still tend to make very modest tax payments.

Although legalization would increase average tax payments by 77 percent, average costs would rise by 118 percent.

The fact that legal immigrants with few years of schooling are a large fiscal drain does not mean that legal immigrants overall are a net drain -- many legal immigrants are highly skilled.

The vast majority of illegals hold jobs. Thus the fiscal deficit they create for the federal government is not the result of an unwillingness to work.

The results of this study are consistent with a 1997 study by the National Research Council, which also found that immigrants' education level is a key determinant of their fiscal impact.

A Complex Fiscal Picture
Welfare use. Our findings show that many of the preconceived notions about the fiscal impact of illegal households turn out to be inaccurate. In terms of welfare use, receipt of cash assistance programs tends to be very low, while Medicaid use, though significant, is still less than for other households. Only use of food assistance programs is significantly higher than that of the rest of the population. Also, contrary to the perceptions that illegal aliens don't pay payroll taxes, we estimate that more than half of illegals work "on the books." On average, illegal households pay more than $4,200 a year in all forms of federal taxes. Unfortunately, they impose costs of $6,950 per household.

DISCLAIMER: I AM NOT AGAINST IMMIGRATION.  IF IT WERE NOT FOR IMMIGRANTS THIS COUNTRY WOULD NOT HAVE EXISTED.  HOWEVER, I AM AGAINST ILLEGAL IMMIGRATION.  THE FACTS ABOVE CORROBORATE MY STANCE ON THE ISSUE.  THIS COULD BE ONE OF OUR MANY PROBLEMS.