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Nicholas Wapshott: New Americans, new challenges
February 03, 2013
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The United States is on the threshold of comprehensive immigration reform. Between the president and the coalition in the Senate, it looks likely it will pass, which means that within a few years we shall have 11 million new Americans with full voting rights. What will their emergence from the shadows do to our economy? And, perhaps more importantly, what will it do to our politics? Who stands to gain from this enormous influx of new blood into our democratic system?

The numbers who are here illegally have gone down since John McCain last tried to introduce reform measures in 2007. As the economy slumped after the financial crisis of 2008–09, migrant workers stayed at home and undocumented workers who could not find work began to repatriate themselves. Record numbers were also deported.

Today, according to the 2010 census, 11.1 million illegals are in our midst. Assuming that Congress, led by a bipartisan coalition in the Senate, responds to the president’s appeal to seize the moment, in the next few years we will welcome them as full citizens. That means 11.1 million more people to be taxed and buy health insurance, and 11.1 million more able to vote.

Contrary to the common perception, a majority of illegal immigrants both pay taxes and make Social Security payments. The term “undocumented workers” is a misnomer. To get a job legally they need papers, which entails assuming identities to get official papers or obtaining forged documents. Either way, they are not the out-and-out shirkers opponents of immigration make them out to be. According to the most recent figures of the Congressional Budget Office, compared to the commonplace tax-dodging techniques employed by documented Americans, the majority of illegals are already model citizens.

As we are dealing with a black economy, accurate statistics are hard to come by. But those we have are full of surprises. And they vary from state to state. Colourado, for instance, estimates that in 2006 “unauthorised immigrants” paid between $159 million and $194 million in taxes, while the state paid out $217 million to $225 million for the “education, Medicaid, and corrections” costs they accrued.

Illegals in Iowa in 2004 paid between $45.5 million and $70 million in taxes and benefited to the tune of $107.4 million. New Mexico raised $69 million from illegals, between $1 million and $2 million more than it spent on educating their children. The state of Texas claims to have made a profit of $424 million on illegals, though local governments picked up an enormous bill, not least for patrolling the Mexico border.

Through programmes like George W. Bush’s No Child Left Behind, the federal government picks up about 90 per cent of the tab for the difference between what illegals pay in taxes and the public services they consume. With every new American paying their full share, the costs to local, state and federal government departments will fall. There will be new net tax revenue to pay for existing public spending, which means a net benefit to local taxpayers and the national economy.

Reuters
 

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