Do Illegal Immigrants Pay Taxes ???

HT~ Roy Germano, Ph.D.

YES !!! They generally pay taxes the same way you and I pay them, but without access to most of the benefits that normally come with being a taxpayer.

How they pay
Income Tax: Every time you receive a paycheck, you probably notice that something is missing. That’s because your employer automatically withholds federal, state, and local income taxes and Social Security and Medicare taxes. Immigrants also have money automatically deducted directly from their paychecks —even those who are here illegally. But how? Well, the Social Security Administration estimates that 75% of undocumented immigrants are actually on formal payrolls and are paid by check just like anyone else. They get on the payroll by using fake social security numbers or social security numbers of the deceased, which are easily available from counterfeiters for a couple hundred dollars.
Sales Tax: Every time you buy something, you pay sales tax. That money goes to state and local governments. Staying at a hotel or renting a car, you pay state and local taxes. If you fill up your gas tank, you automatically pay state and federal gasoline taxes. If you buy liquor or cigarettes, you automatically pay various local, state, and federal excise taxes. Immigrants —legal and illegal —all buy things, and thus pay these taxes as part of their purchase.
Property Tax: Local governments also collect property taxes, which are a percentage of the value of one’s home and fund services like schools, certain medical services, and police and fire stations. Immigrants —legal and illegal —pay these taxes directly if they own a home, or indirectly if they rent.

Possible instances of overpayment
Illegal immigrants pay into Social Security via automatic payroll deductions, but they can never claim Social Security benefits because they are here illegally and because their Social Security numbers are fake. It’s estimated that undocumented immigrants pay about $7 billion per year in Social Security taxes that they will never be able to reclaim.
Most Americans get tax refunds at the end of the year. Illegal immigrants don’t get refunds unless they file, which many don’t do because they fear deportation. When a refund is owed but not paid out, this is free money for the government. And according to the nonpartisan Tax Policy Center, about half of Americans are ultimately exempt from paying income tax due to low income levels and as a result of deductions and credits. Many low-income taxpayers pay marginal amounts if they do have to pay. As a result of their low income levels, most illegal immigrants would naturally fall into either of these categories. But because many do not file out of fear of being deported, they are never refunded money that was automatically withheld from their paychecks.

Possible instances of underpayment
Undocumented immigrants —and immigrants in general —are more likely than the average citizen to work in the informal or cash economy because these types of jobs are often the least desirable, most unstable and inconsistent, and lowest paid. Informal and cash jobs create big incentives not to claim cash income —undocumented immigrants and citizens alike find these incentives compelling. Most waiters and bartenders, for example, don’t claim and pay taxes on cash tips (or if they do, it’s usually just a small percentage). The high school student down the street usually doesn’t pay taxes on money earned from mowing your lawn or shoveling your driveway. Legally speaking, they’re supposed to claim this income. But something important to keep in mind: incomes of workers in the informal economy are generally so low that most would ultimately be exempt from paying income taxes or have extremely low tax liability even if they did file and claim cash income.

Eligibility & ineligibility for public services
As taxpayers, most of us are eligible for an array of social safety nets like food stamps and unemployment insurance. The 1996 Personal Responsibility and Work Opportunity Act barred illegal immigrants from receiving any welfare benefits except in medical emergencies. It also barred legal immigrants from eligibility for welfare benefits during their first 5 years in the country. So, no, illegal immigrants do not exploit welfare services quite simply because they are not eligible to exploit them.
In Plyler v. Doe (1982), the Supreme Court ruled it unconstitutional to deny undocumented immigrants K-12 public education. Denying education would not only be crippling to the immigrants themselves, but would have broader social impacts. But regardless, by directly or indirectly paying property taxes, undocumented immigrants pay into public education. In general, immigrants benefit from police service, firefighters, national defense, parks, and other public goods. But again, the taxes they pay contribute to paying for these services.
American-born children of undocumented immigrants are eligible for welfare benefits like Medicaid. But it’s important to remember that the recipients of these benefits are children that the 14th Amendment has deemed full citizens of United States.

Are illegal immigrants a net drain on the system?
Although certain news programs and partisan research institutes would like you to believe otherwise, there is no simple answer to this question. At the federal level, it appears that undocumented immigrants pay in slightly more than they take out. Figures vary greatly at the state and local levels. Areas with higher concentrations of undocumented immigrants, for example, spend more educating and providing emergency healthcare to undocumented immigrants than areas with lower concentrations. But this is not because undocumented immigrants are out to evade taxes and milk the system —as we learned above, most pay sales, property, and income taxes automatically and are ineligible for the vast majority of social services. Rather, the reason undocumented immigrants may take out more than they contribute has mostly to do with their status as low wage earners. Even if they use the same amount of public services as wealthier households, low-income households (be they made up of citizens or immigrants) are generally a net drain on public finances because our regressive system requires them to pay less income tax and by virtue of having less purchasing power, they pay less sales and property tax.