Republicans seek to abolish IRS and make illegal immigrants pay taxes
Earlier this year, the Washington Examiner ran an article by Rachel Schilke highlighting the fact that illegal immigrants would have to pay taxes if we had the FAIRtax. You can read the article here: https://www.washingtonexaminer.com/news/house/3280726/republicans-abolish-irs-illegal-immigrants-pay-taxes-fairtax/.
While the FAIRtax movement is not specifically about immigration, one effect of the FAIRtax would be to capture taxes from a segment of the population that mostly pays no tax today.
Residents of the United States, regardless of their immigration status, must file a return with the IRS and pay taxes on their worldwide income. The obligation to file tax returns goes even further, but that discussion is beyond the scope of this article. One way or another, undocumented immigrants cannot legally avoid a tax obligation.
However, undocumented immigrants are in a difficult position. They live in the shadows out of concern for being discovered and deported. Many of them work for cash off the books for employers willing to play along. Either for fear of being caught or unwillingness to pay taxes, the undocumented workers do not file returns and pay taxes. Those who employ them illegally save on employer payroll tax.
Another segment of undocumented workers pays withholding tax by providing false Social Security numbers to their employers, but they see no benefit from the programs these taxes finance. According to the Institute for Taxation and Economic Policy (ITEP), undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. Most of that amount, $59.4 billion, was paid to the federal government, while the remaining $37.3 billion was paid to state and local governments. If the immigrants were here lawfully, they would properly benefit from the social programs for which they pay taxes.
If the FAIRtax were the law today, undocumented immigrants and others operating in the shadows would pay tax when they make a purchase or use a service. However, undocumented immigrants cannot provide a valid Social Security number, so they would not receive the prebate. For those who advocate against unauthorized immigration, the ineligibility for the prebate would be an incentive for immigrants to normalize their status.
The Washington Examiner was right to highlight the effect of the FAIRtax on undocumented immigrants. I would love to hear how you present this topic to friends, family, neighbors, colleagues, and groups.
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