June 09, 2010

The Price That We Pay: Undocumented Immigrants and Taxation

Rita, a 47-year-old Hispanic woman, may in fact be the blueprint for a growing number of Mexican-American immigrant lifestyles: Rita is an undocumented immigrant, and a taxpayer.

According to her 2009 tax return, the divorced mother of three, who asked that her last name not be used for fear of prosecution, made $18,295.68 of which $1,170.41 was withheld for Social Security tax and $273.73 for Medicare - benefits that Rita is unlikely to ever see.

A poll conducted in 2006 by ABC News and The Washington Post found that a third of all Americans said their biggest objection to undocumented immigrants is their use of "more public services than they pay for in taxes." Many of these same people oppose comprehensive immigration reform for this reason, and among conservative pundits such as Bill O'Reilly the notion that undocumented immigrants pay tax at all has been derided as "crap."

But reports by the Congressional Budget Office and the Social Security Administration confirm that undocumented immigrants in fact pay many different types of taxes, including sales tax, property tax, Social Security tax and income tax.

Francine Lipman, a professor of tax law at Chapman University, says the disinformation about the tax contributions of undocumented immigrants can be attributed to both "confusion about the system generally and . . . that we have a history of scapegoating people when times are tough, and maybe also when times are good."

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