As I have explained at great length before, there are two types of amnesty for violations of the law: complete amnesty, meaning no penalties whatsoever, and partial amnesty, by which people are absolved from consequences for lawbreaking for some penalty less than the full force of the law. It’s been obvious for some time that the current immigration bill would provide a partial amnesty for people currently in the U.S. illegally. For people who oppose any type of amnesty, that’s reason enough to oppose the bill. For people like me, who are willing to support a ‘legalization’ process under the right circumstances, the question is the details. But one thing should be absolutely non-negotiable: anybody who wants to stay in the U.S. legally has to pay their taxes.
The bill currently under discussion appears to fail that test. The immigration bill would bestow a massive tax amnesty on illegal immigrants. The supporters of this bill think that you, as an American citizen, should pay taxes – but illegal immigrants can become legal residents without paying their own share. This is scandalous. The bill should be rejected for that reason alone, and its supporters should be made to explain why they didn’t want illegal immigrants to pay the taxes they already owe.
I’m working here off of National Review’s PDF copy of the bill, as well as N.Z. Bear’s annotated copy. If I read this bill correctly, the sections establishing the “Z visa” that gives lawful status to people currently illegally in the U.S. are Sections 601-02 and 609, at pp. 260-85 and 294-95 of the draft bill.
What do you have to show to get a Z visa?
Well, Section 601(e)(4) requires that the applicant be employed when making the application, and Section 601(m)(1)(B) requires continuation of fulltime employment. Section 601(i)(2)(A) permits documentation of presence and employment status by records of the IRS, the Social Security Administration “or any other Federal, State, or local government agency.” Section 601(i)(2)(C) allows applicants who can’t satisfy this to use alternate proof via any two of bank records, business records, employer records, labor union or day center records, remittance records, or affidavits by nonrelatives.
What do you have to pay to get the Z visa?
Section 601(e)(6) (the draft has no Section 601(e)(5)?) provides for payment of an application fee of up to $1,500 (Section 601(e)(6)(A)), a $1,000 penalty (Section 601(e)(6)(B)(i)), a “State impact assistance fee” of $500 (Section 601(e)(6)(C)), as well as $500 a head fees for derivative applicants (Section 601(e)(6)(B)(ii)).
What do you have to pay to go from a Z visa to lawful permanent residence?
Section 602(a)(1)(C)(v) requires payment of a $4,000 penalty at the time of an application for lawful permanent residence.
Section 602(a)(8) states that an applicant for lawful permanent residence must satisfy “any applicable Federal tax liability accrued during the period of Z status.”
Tax Amnesty
Unless I am missing something or reading this wrong, this means that:
(A) People currently in the U.S. illegally can obtain Z visas without satisfying their liability for any taxes – federal, state, local, Social Security, FICA – they did not pay previously.
(B) Continuance of Z status does not depend on paying taxes.
(C) Lawful permanent residence can be obtained without satisfying liability for unpaid taxes prior to obtaining the Z visa.
(D) Lawful permanent residence can be obtained without satisfying liability for unpaid state or local taxes.
The Bush Administration apparently removed a provision requiring payment of back taxes that even Ted Kennedy had approved. Newt Gingrich has been pressing this as a reason to sink the bill. Robert Rector of the Heritage Foundation explains that the failure to collect taxes won’t be mirrored when it comes time to pay benefits:
“They never contribute more than they take out and at retirement they become very costly,” Rector said in Capitol Hill press conference on Monday with Sessions, Sen. Jim Bunning (R.-Ky.) and Rep. Bill Bilbray (R.-Calif.).
“Every person that gets the Z visa, and that would be about 12 million people, 9 million of which are adults – is immediately eligible for Social Security. They start to contribute to that system. They start to earn eligibility for Medicare. The White House has claimed they don’t get welfare benefits. That is absolutely untrue. For the first 10 years or so they are in the country, the adults would not get welfare benefits, but the children would. They are going to be here for fifty years. For the first 10 years they don’t get means tested welfare, but for the next forty they are going to be eligible for every single type of means tested welfare.”
Apparently the Bush Administration feels that collecting back taxes will be too hard to calculate:
White House spokesman Scott Stanzel, asked in a telephone interview yesterday to clarify Chertoff’s remark, said it referred only to future taxes.
“It is important that the reformed immigration system is workable and cost efficient,” Stanzel said. “Determining the past tax liability would have been very difficult and costly and extremely time consuming.”
Stanzel stressed that immigrants would be required to pay a fine of up to $5,000 if they want to apply for a green card to become a legal resident, although that fine is not for failure to pay taxes.
Laura Capps, a spokeswoman for Kennedy, said a provision for requiring back taxes was in Kennedy’s original bill and that Chertoff called for it to be removed. “Chertoff thought it would be too challenging to accurately determine the amount of an applicant’s back taxes,” she said.
Administration officials said many illegal immigrants do not get paychecks that can be audited, making it difficult to determine tax liability.
Of course, the bill is very flexible on how you go about proving that applicants have been, and continue to be, employed and resident in the U.S. for a certain period of time. This being a voluntary statutory solution rather than a compulsory court proceeding, there’s no reason why a similar process and formula couldn’t be adopted for computing an estimated tax liability. As I have noted before, requiring full payment of all back taxes reduces the incentive to exaggerate how long you have been here, since a longer term of residence means more tax liability. A similar amnesty program could be put in place to encourage the employers of illegals to report and pay their back withholding/payroll taxes using the same formulas.
We can have a fair debate about whether it’s proper to let people who entered illegally stay here. But if the idea is to legalize people who are supposed to be hardworking, taxpaying Americans, there’s no justification whatsoever for not making them pay their taxes like the rest of us.