Do illegal immigrants cost the American Taxpayer?

[Guest MarkS]

Attached is a link to an entity that advocates for immigration reform (FAIR)  The report has been criticized for being on the high end of the range.  Admittedly estimates like these hard to determine with precision.  However, estimates - even those that are difficult to make - are still quite useful as a beginning point.

 

https://www.fairus.org/issue/publications-resources/fiscal-burden-illegal-immigration-united-states-taxpayers

 

Also attached is a criticism of the Fair position and numbers.

 

http://www.politifact.com/truth-o-meter/statements/2016/sep/01/donald-trump/donald-trump-says-illegal-immigration-costs-113-bi/

[Guest Schwab711]

Attached is a link to an entity that advocates for immigration reform (FAIR)  The report has been criticized for being on the high end of the range.  Admittedly estimates like these hard to determine with precision.  However, estimates - even those that are difficult to make - are still quite useful as a beginning point.

 

https://www.fairus.org/issue/publications-resources/fiscal-burden-illegal-immigration-united-states-taxpayers

 

Also attached is a criticism of the Fair position and numbers.

 

http://www.politifact.com/truth-o-meter/statements/2016/sep/01/donald-trump/donald-trump-says-illegal-immigration-costs-113-bi/

 

Interesting topic and I'd imagine this is an extremely difficult number to estimate with any accuracy.

 

1. The US deficit is expected to be ~$900b each year between 2018-2021 (the years Trump will set the budget). There is expected to be ~330m folks living in the US in 2020 (this includes citizens, illegals, ect - any resident). Thus, the average cost per person is expected to be ~$3,000 +/-. This balance includes non-person receipts (and outlays - though they are a net-positive). With corporate taxes expected to be ~$225b-$300b, we can estimate that the average US citizen costs around $3,750 - $4,000 per person. Higher than I would have expected.

 

2. We also know this distribution has a heavy skew, but we'll ignore that for simplicity purposes since we don't know the illegal immigrant population well-enough to adequately adjust. Interestingly, illegal immigrant age demographics are roughly equal to the US's demo. Let's keep it simple and avoid adjustments again.

 

3. This is the part I don't want to spend time thinking about how to do it better. In that sense, it's easier to criticize then to do so kudos to FAIR for doing. Anyway, including the 4.2m citizen children of illegals in the cost figure highly skews the per illegal family member expense! Kids obviously do not contribute money to US Treasury very much (child labor laws being what they are and such). On a per illegal basis, I'd guess the cost is less than my quick estimate in #4. A study that makes a habit of presenting misleading figures and methods may not be the best study to cite (though it may still have merit in the ideas or in other ways).

 

4. FAIR's sentence I'll focus on:

At the federal, state, and local levels, taxpayers shell out approximately $134.9 billion to cover the costs incurred by the presence of more than 12.5 million illegal aliens, and about 4.2 million citizen children of illegal aliens. That amounts to a tax burden of approximately $8,075 per illegal alien family member and a total of $115,894,597,664.

 

The only number they report on a per person basis is based on gov't outlays only. On a net basis, the figure is roughly $6,946. This $116b net includes roughly $13b in immigration enforcement and $10b in state policing or similar duties. I'd be interested to see how they allocated the state policing duties balance. The federal immigration enforcement balance seems like double-dipping.

 

Finally, in the $88b state and local expenditures, they include $18.5b in general expenditures that isn't explained in any way at all. For argument's sake, let's assume away the $13b immigration enforcement and $18.5b general expenditures (since who knows what this is). We are down to ~$84.4b. That's $5,054 per person. That's not that different from the average American. I would suspect the true cost is closer to $6,000/illegal family member but the point is that we should expect the average person (and average tax payer) to 'cost the US tax payer money'. Just my initial thoughts on the argument structure.

 

Sources:

https://www.fairus.org/issue/publications-resources/fiscal-burden-illegal-immigration-united-states-taxpayers

https://immigration.procon.org/view.resource.php?resourceID=000845

https://www.indexmundi.com/united_states/age_structure.html

https://www.whitehouse.gov/wp-content/uploads/2018/02/budget-fy2019.pdf

[Gregmal]

While I would think conventional wisdom says they do, and quite a bit, this is probably a case where I'd decide to take the other side of the argument. Outside of unpaid ER visits, I can't really think of too many ways they cost anything. If nothing else, a criminal breaking the law wants to remain under the radar, keep a low profile, and if anything be viewed as a marginally positive member of the community to avoid bringing attention to themselves. Crime wise, and border patrol wise, these jobs would be there either way. Law enforcement officers wouldn't go away if illegals did.

 

On the flip side, illegals do contribute economically in several positive ways. So I wouldn't think the cost, per say, is much if anything at all.

[BG2008]

Is the increases of political conversations on this board an indication of the times of the economic/investing cycle?  It seems like we talk less about value stocks and more about politics on this board in the last 2-3 years.

[rb]

Is the increases of political conversations on this board an indication of the times of the economic/investing cycle?  It seems like we talk less about value stocks and more about politics on this board in the last 2-3 years.

I think it's both. Stocks are expensive so there's not that much to do. At the same time the world is going insane and it's hard not to notice.

[DTEJD1997]

While I would think conventional wisdom says they do, and quite a bit, this is probably a case where I'd decide to take the other side of the argument. Outside of unpaid ER visits, I can't really think of too many ways they cost anything. If nothing else, a criminal breaking the law wants to remain under the radar, keep a low profile, and if anything be viewed as a marginally positive member of the community to avoid bringing attention to themselves. Crime wise, and border patrol wise, these jobs would be there either way. Law enforcement officers wouldn't go away if illegals did.

 

On the flip side, illegals do contribute economically in several positive ways. So I wouldn't think the cost, per say, is much if anything at all.

 

There are few ways that illegal immigrants cost society that I can think of off the top of my head.

 

In the Houston area, lower end illegals would tend to "cram" into houses.  A house that would normally house 4 people or so, might have 20+ or more.  Of course, this is a violation of housing standards, but is also putting strain on resources (sewers, roads, electric transmission).  This was usually for immigrants fresh into the country.  After some period of time, they usually move onto more normal housing accommodations.  In some areas, this was a real problem.  Fires and or sanitation problems were much more common in these cramped quarters.  The criminal element seemed to operate much easily in these areas too, usually "coyotes".

 

Another area of damage is that certain industries come to be dominated by illegals.  In the Houston area, residential construction has a HUGE amount of illegals working in it.  Same thing with landscaping & fast food & lower end restaurants.  Native born Americans get pushed out of these industries.  Tax collection is also certainly screwed up.  Regulation and code enforcement are sometimes screwed up too.

 

Illegals are also more often the victims of theft/crime.  Imagine you are criminal....robbing illegals is a rational area to operate in.  They frequently have cash (and in large amounts as they are frequently "unbanked"), they are less likely to report incidents to local law enforcement, they are usually easy to spot, sometimes in dense areas...

 

Illegals disrupt the labor markets.  When I was a kid, you frequently got a job delivering papers, mowing lawns, or working in a restaurant.  Illegals have now taken over these jobs in certain areas of the country.  Why hire a kid, when you can get an adult who is willing to work 2X as hard and is probably more reliable?

 

Then you've got public health issues.  Illegals tend not to have insurance, so they sometimes will come into hospital emergency rooms.  Flooding them out and costing hospitals a great deal.  Then you've got the problems of diseases starting to pop up that were almost extinct in modern day America.

 

OR what if you are a low skilled person OR somebody trying to move up in society from a very low spot?  Things on the very low end are more difficult for native born Americans.

 

I would suggest that a good number of people on this board have little interaction with illegals or this part of society.  That they do not live in areas where there are great numbers of illegals coming in.  Kind of out of sight, out of mind.

 

Most illegals are good people looking to improve their lives.  I don't blame for trying to make their lives better.  With that being said, I think the border needs to be tightened immensely....and then as a society, we can decide how many people we let in per year, 1,000 or 10,000 or 100,000 or 1,000,000 or even more.  American citizenship is a valuable thing and should be given away willy nilly.

 

If America needs more workers, issue TEMPORARY work permits.  Let people apply to come in who are screened/tested.  They pay a fee, and then can work for 3, 6 month, 1 year or some designated period of time. 

 

No citizenship should EVER be given to somebody who comes in illegally.  Simple solution for the "dreamers"...allow them residency, but no citizenship.