I know with absolute certainty that the recent Heritage study is nothing more than a flawed and distorted propaganda piece meant to kill immigration reform. The Heritage study is trying to address a macroeconomic question using a microeconomic model. Their methodology assumes that the immigrant population lives in some kind of isolated bubble, separate from our economy. That is a ridiculous premise. Immigrants bring vitality and productivity to our workforce that impacts every aspect of our economy.
While of course these people pay taxes — and they would pay even more taxes after comprehensive immigration reform — their tax contributions are minute compared to the taxes paid by:
1. The corporations that the undocumented workers generate revenue for;
2. The additional legal co-workers who owe their income, in whole or in part, to the presence of the undocumented workers who work with them (often at much higher tax rate salaries or commissions than the undocumented lower wage employees);
3. The owners or shareholders of the companies that they work for (again, at much higher tax rates because of much larger incomes);
4. The property taxes paid by the businesses that the undocumented work for;
5. The taxes paid by the owners and employees of businesses that produce revenue by working with those who employ undocumented workers (grocery chains, for example, that sell produce picked by undocumented laborers).
When you look at this equation through a macroeconomic lens (which is the only accurate way to look at it), then the tax revenue generated through and because of the undocumented population is several times the amount that they receive back in social services. It’s not even remotely close. Many economists believe that immigrants are not the problem, but rather are the solution to many economic problems. As Julian Simon, formerly of Heritage, has noted, “Every study that provides dollar estimates shows that when the sum of the tax contributions to city, state and federal government are allowed for, those tax payments vastly exceed the cost of the services used, by a factor of perhaps five, ten or more.”
According to the National Immigration Law Center, “Over the next 75 years, new immigrants will provide a net benefit of approximately $611 billion in present value to the Social Security system.” Also, according to the Immigration Policy Center, immigrants pay more in taxes than they use in services over their lifetimes: depending on skills and level of education, each immigrant pays, on average, between $20,000 and $80,000 more in taxes than he or she consumes in public benefits. Current levels of immigration will provide a net benefit to the Social Security system of nearly $450 billion in taxes paid over benefits received during the 2006–2030 period — and almost $4.4 trillion during the 2006–2080 period. This is because 75 percent of immigrants arrive in the United States when they are in their prime working years (age 18 to 65). But the share of native-born citizens in their prime working years now stands at only 60 percent, and will decline rapidly over the coming decades as the baby boomers retire.
In closing, the issue of comprehensive immigration reform is complicated and difficult enough without false studies complicating the issue. We need facts and accurate numbers to help our legislators to make fair and just decisions as these new laws are written. The Heritage study is flawed and disingenuous, and deserves zero consideration as this debate moves forward.