Undocumented Workers, Meet the IRS

November 20, 2014. In Politico, a story about the economic and fiscal impacts of President Obama’s executive action on immigration:

Obama’s new immigration order, which will shield about 5 million undocumented workers from deportation, will have tax implications that are sure to irk Republicans who are already calling foul on his bid to bypass Congress to ease immigration laws.

That’s because most of that group of 5 million will be adults with U.S.-born children, meaning they’ll theoretically be able to claim up to $1,000 per child for child tax credit, or several thousand dollars as part of another tax credit for the working poor, experts said.

But the 5 million will also pay a modest amount of new taxes to Uncle Sam that experts said will more than make up for the credits the government pays to them — potentially even creating a small plus-up for the Treasury.

“You would see a gain in earnings, in tax compliance, and some gain in the claim of tax credits — and the net of all that would almost surely be positive,” said David Kallick, a senior fellow at the immigration research initiative at the Fiscal Policy Institute.

 

(A small correction: Kallick’s title is actually senior fellow and director of the Fiscal Policy Institute’s Immigration Research Initiative.)

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