Illegal Immigration and the Fair Tax

Marcus Everett

With all the debate going on about what to do about illegals who have invaded this country by the millions, no one seems to have addressed the connection between the illegal worker problem and our tax laws. Whereas most Americans agree that something drastic must be done to secure our borders from terrorist threats, there is considerable disagreement about how to solve the problem of illegals who are here only to find gainful employment. This debate is further fueled by the claim that these illegals are necessary to do jobs that Americans are unwilling to do, and therefore are necessary to the economic health of the U.S.

What seems missing in the ongoing discussions of all this is the role our tax system plays in the matter. The current U.S. tax system is centered primarily around the income tax, which is a significant factor in making the U.S. citizen or even the legal immigrant at a distinct disadvantage to the undocumented illegal worker. I haven't seen an analysis as to how much more a documented legal employee costs a company than an undocumented cash worker, but I would guess it is at least double. Not only does the employee have to get a higher wage to cover his income tax, but the employer is hit with payroll taxes, health benefits costs, union labor costs and the administrative costs of compliance with all of these. This burden prices the American worker out of the picture, whether or not he is willing to do the more menial jobs.

Any careful analysis of the problem points to the income tax as the major culprit. Compliance requires draconian measures by the tyrrannical IRS, and as has been pointed out just recently, there is still a hugh hole in the bucket. Add to this the fact that the income tax does put the U.S. worker at a decided disadvantage to not only the illegal immigrant, but to most of the foreign workers in third world countries, and one can see why outsourcing and moving company production facilities offshore is so rampant. American worker productivity may still be better than most foreign competitors, but in the global market that advantage is offset by the tax burden.

The obvious answer to all this is a consumption tax in lieu of the income tax. NOT a flat tax, nor a combination of income and consumption taxes, but a complete rejection of the income tax as an acceptable mechanism for funding government. And, as the title of this tirade implies, there is a movement gathering momentum to do just that. Google 'Fair Tax' and do your homework. And in the process, consider how much the illegal immigrant worker problem would be improved if the American worker could compete with them on a more equal footing.

Copyright (c) 2006 Marcus Everett
P. O. Box 33
Looneyville, WV 25259

marcus.everett@citlink.net