As the U.S. is recovering from the Great Recession, Americans in general consider the economy, jobs, and budget deficit as their top priority. However, it is a critical moment for them to carefully examine current immigration bills, which are making remarkable progress in both the Senate and House. These bills amount to amnesty. By legalizing 11 million unlawful immigrants, the amnesty would likely have negative long-term impacts to this nation financially and politically.
The Fiscal Cost Of Amnesty
A recent analysis released by the Heritage Foundation claims that "over a lifetime, the unlawful immigrants together would receive $9.4 trillion in government benefit and services and pay $3.1 trillion in taxes. They will generate a lifetime fiscal deficit of $6.3 trillion." This analysis is based on the finding that “half of unlawful immigrant households are headed by an individual with less than a high-school degree, and another 25% of household heads have only a high-school degree.”
$6.3 trillion sounds enormous, but it's fairly accurate, given the scope of current social welfare programs. Just consider that a family of four with an annual income of about $20,000 would have zero tax liability, yet families who are legal and paid nothing in taxes can be eligible to receive a tax refund of up to $8,000 directly from the IRS. Most of these low-income families also receive welfare benefits such as food stamps, housing assistance, and medical expenses. Therefore, American taxpayers may have to pay tens of thousands of dollars every year to support each low-income family in the U.S.
There is a competing theory by the CATO Institute, which suggests that legalizing 11 million unlawful immigrants will help grow the U.S. economy. It is true that overall GDP may appear to be bigger if currently under-the-table business activities are included, but it is not a healthy and sustainable growth, as it is associated with enormous government expenses. The purpose of a pro-growth theory is to promote an immigration policy which would make fiscal costs public and keep the corporate profits private.
The “Gang of Eight” immigration bill could lead to much higher taxes for both individuals and businesses within the foreseeable future. The reality is, in order to attract millions of additional voters who are also dependents of numerous government welfare programs, the GOP will sooner or later have to change its position on "low taxes, small government." The GOP will no longer be the same. Thus, this immigration bill could seriously harm American corporations' business interests in the long run.
Possible Conflict With Baby Boomer Retirees
Americans should be aware that there could be a financial conflict between currently unlawful immigrants and American Baby Boomer retirees 10 years from now. 2023 is likely the peak year for Baby Boomer retirement. Many of these retirees will have to depend on retirement income from Social Security.
According to this Senate bill, millions of low-income illegal immigrants will obtain their green cards within 10 years, and therefore become eligible for an enormous amount of government welfare benefits. 2013 tax law requires American workers to pay 7.65% of their income as a combined tax rate for both Social Security and Medicare. However, low-income workers pay significantly less in taxes than they receive in benefits overall.
As the Baby Boomers retire, Social Security and medical costs will go up. At the same time, an exploding population of green-card-carrying immigrants would become eligible for welfare benefits in 2023. Hence, there is likely going to be major conflict between these two populations. Both retirement and welfare systems may start to default if politicians stretch younger taxpayers' ability to pay and support both of these enormous programs at the same time.
Those in the Baby Boomer generation have devoted their entire lives to make the U.S. a great nation, so they truly deserve to have their retirement lives stable and worry-free.
Debt and Taxes Discourage Skilled Immigrants
The U. S. already has $16.7 trillion in national debt. On average, this amounts to about $53,000 in debt per American, including babies and retirees, which is approximately the annual median income per household. Americans will be struggling to pay back all this debt for a very long time. However, politicians are not afraid to add trillions more in debt for younger Americans to pay.
Compared to low-income, low-skilled immigrants who pay little or no taxes, highly skilled immigrants, who are mostly middle- or upper-middle-class workers, would have to pay a considerably larger portion of the taxes in order to support numerous welfare programs sponsored by the government. Highly skilled immigrants, who are engineers, scientists, and doctors, may never rush to the streets or City Hall to protest, but there is certainly a limit regarding how much they are able to contribute.
Many immigrants have deep scars from socialism. They know how their home countries turned into one-party communist countries many years ago. They also learned, as a part of Asian history, how elite people were humiliated and tortured, little by little, begging for their rights, dignity, and properties. Unfortunately, America is not immune from turning into a socialist country if it imports large numbers of low-income immigrants to change its political landscape.
There will be little or no way for highly skilled immigrants or wealthy Americans to prevent future tax hikes or social injustice against them, when they are increasingly outnumbered by others. It may eventually become a better choice for them to leave this country. The U.S. then will be on a pathway to socialism.
If this amnesty bill passes Congress and becomes the law, the U.S. may be at risk to lose a portion of its wealthy and upper-middle-class people, due to sharp tax increases and an unbalanced social structure. These people will take a good amount of talent, wealth, and jobs with them.
Americans can no longer afford any more sweet talk. When problems start to emerge, it usually only takes a minimum of effort to fix them. Hopefully, Americans and immigrants together may be able to prevent the worst scenario from happening.