Rep. Smith Responds To President Obama's La Raza Speech With Immigration Falsehoods

July 25, 2011 4:49 pm ET

Before President Obama gave his speech to the National Council of La Raza's annual conference, House Judiciary Conference Chairman Lamar Smith (R-TX) had already penned his response. Going off of "media reports" that the president would discuss comprehensive immigration reform, Smith sent out a press release equating comprehensive immigration reform with "amnesty" and repeating false talking points about the costs of immigration. Despite Smith's claims, undocumented immigrants both pay taxes and take relatively less from the system than they pay into it. In addition, Smith's assertions that legalization would increase the debt and take away American jobs are patently false.

Claim: Undocumented Immigrants Pay Little In Taxes And Drain Taxpayer Revenue

Rep. Smith Claimed Undocumented Immigrants "Pay Little, If Any, In Income Taxes And Drain Taxpayer Dollars." According to a press release on the House Judiciary Committee website, Smith stated:

With the national debt at $14.5 trillion, it's unbelievable that President Obama continues to call for amnesty legislation. Illegal immigrants have contributed to our debt crisis-they pay little, if any, in income taxes and drain taxpayer dollars. [Judiciary.House.gov, 7/25/11]

Fact: Undocumented Immigrants Contribute More To The System Than They Take Out Of It

Cato Institute: Low-Skilled, Hispanic Immigrants Contribute More To The Economy Than They Cost The Government. According to a report by David Griswold of the libertarian Cato Institute: "Several state-level studies have found that the increased economic activity created by lower-skilled, mostly Hispanic immigrants far exceeds the costs to state and local governments. A 2006 study by the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill found that the rapidly growing population of Hispanics in the state, many of them undocumented immigrants, had indeed imposed a net cost on the state government of $61 million, but the study also found that those same residents had increased the state's economy by $9 billion." [Cato Institute, The Fiscal Impact of Immigration Reform: The Real Story, 5/21/07]

Studies Claiming "Immigrants Are A Net 'Cost'" Paint An Incomplete Picture. According to Walter Ewing, senior researcher at the Immigration Policy Center, via Americans for Immigration Reform: "[M]ost of the studies that claim to demonstrate that immigrants are a net 'cost' to the economy usually rely on one-year 'snapshots' of the immigrant population that fail to account for the incomes and tax contributions of immigrants over time. Most such studies count the education and care of the U.S.-born children of immigrants as 'costs' incurred by immigrant households, even though these same children are classified as 'natives' when they are taxpaying adults. And few of these studies consider economic contributions such as consumer purchasing power and the formation of businesses, which create new jobs and generate additional tax revenue." [Sacramento Bee, 6/28/09, via Americans for Immigration Reform]

Comprehensive Immigration Reform That Includes A Legalization Program Would Add $1.5 Trillion To U.S. GDP Over Ten Years. According to the Immigration Policy Center: "A new report, 'Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform,' by Dr. Raul Hinojosa-Ojeda, finds that comprehensive immigration reform that includes a legalization program for unauthorized immigrants and enables a future flow of legal workers would result in a large economic benefit — a cumulative $1.5 trillion in added U.S. gross domestic product over 10 years. In stark contrast, a deportation-only policy would result in a loss of $2.6 trillion in GDP over 10 years." [Immigration Policy Center, 1/11/10, italics original]

Fact: Undocumented Immigrants Raise Government Revenue By Paying Taxes On The Local, State, And Federal Levels

Households Headed By Undocumented Immigrants Paid $11.2 Billion In Local And State Taxes In 2010. According to the Immigration Policy Center: "The Institute for Taxation and Economic Policy (ITEP) has estimated the state and local taxes paid in 2010 by households that are headed by unauthorized immigrants. These households may include members who are U.S. citizens or legal immigrants. Collectively, these households paid $11.2 billion in state and local taxes.  That included $1.2 billion in personal income taxes, $1.6 billion in property taxes, and $8.4 billion in sales taxes.  The states receiving the most tax revenue from households headed by unauthorized immigrants were California ($2.7 billion), Texas ($1.6 billion), Florida ($806.8 million), New York ($662.4 million), and Illinois ($499.2 million)." [Immigration Policy Center, 4/18/11, internal citation removed]

In 2007, 75 Percent Of Undocumented Immigrants Had Taxes Withheld From Paychecks Or Filed Tax Returns. According to a 2007 report from the Congressional Budget Office: "As part of a larger study on migration, the Center for Comparative Immigration Studies at the University of California at San Diego conducted a survey of unauthorized immigrants and found that, in 2006, 75 percent had taxes withheld from their paychecks, filed tax returns, or both." [Congressional Budget Office, The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments, December 2007]

CLAIM: Legalization Would Increase The Debt And Take Away Jobs From American Citizens

Rep. Smith Claimed That "Amnesty Would Further Bury Us In Debt" And "Prevent Many Americans From Getting Jobs." According to a press release on the House Judiciary Committee website:

Amnesty would only further bury us in debt. If millions of illegal immigrants are legalized, they will be eligible for a wide array of taxpayer-funded benefits, such as health care and education. They will also further deplete our entitlement programs, which are already on the verge of insolvency. Amnesty would also prevent many Americans from getting jobs since millions of illegal immigrants will become eligible to work legally in the United States. [Judiciary.House.gov, 7/25/11]

FACT: Legalizing Undocumented Immigrants Would Help The Economy And Increase Revenue

2009 Cato Study: Legalization Would Benefit The American Economy. According to a 2009 study conducted by the Cato Institute: "[L]egalization of low-skilled immigrant workers would yield significant income gains for American workers and households. Legalization would eliminate smugglers' fees and other costs faced by illegal immigrants. It would also allow immigrants to have higher productivity and create more openings for Americans in higher skilled occupations. The positive impact for U.S. households of legalization under an optimal visa tax would be 1.27 percent of GDP or $180 billion." [Cato Institute, 8/13/09, emphasis added]

Fitzgerald: Legalization Would Create A Larger Tax Base And Would "Yield A Slight Net Fiscal Benefit And Slightly Higher Economic Growth." According to David Scott Fitzgerald of the Center for Comparative Immigration Studies via the Council on Foreign Relations:

How would a mass legalization program affect the U.S. economy? Legalized immigrants would be more likely to enter the formal economy, earn higher wages, and pay federal income tax and payroll taxes. On the other hand, newly legalized immigrants would become eligible for social welfare programs like unemployment insurance, Social Security, and Medicare. The larger tax base achieved by bringing this population into the formal economy and consequently increasing the economic mobility of both immigrants and their U.S.-born children would yield a slight net fiscal benefit and slightly higher economic growth. [Council on Foreign Relations, 3/8/10, emphasis added]

FACT: Immigrants Do Not Displace American Workers

Immigration Policy Center: "Employment Is Not A Zero-Sum Game." According to the Immigration Policy Center: "Employment is not a zero-sum game in which workers compete for some set number of jobs.  Policies which lift the wages of workers, regardless of where they were born, benefit the entire U.S. economy.  Workers who earn higher wages also buy more goods and services from U.S. businesses, and pay more in taxes to federal and state governments, both of which create jobs.  Conversely, attempting to remove unauthorized workers from the United States would not only be an expensive and socially destructive undertaking, but would also shrink the consumer base of the U.S. economy and reduce the total number of available jobs.  In other words, comprehensive immigration reform would sustain new jobs at a time when the economy desperately needs them." [Immigration Policy Center, 2/24/10]

Princeton Economist: "Best Evidence Does Not Support The View" That Immigrants Have Hurt Americans' Opportunities. In an April 4, 2006, memo, Alan B. Krueger, an economist at Princeton University, wrote: "The best available evidence does not support the view that large waves of immigrants in the past have had a detrimental effect on the labor market opportunities of natives, including the less skilled and minorities. [...] Those studies that predict the largest adverse impacts of immigration on natives' wages assume that as new workers are added to the U.S. labor market, the size of the capital stock remains unchanged. More realistically, as workers come to the U.S., the capital stock is likely to expand, particularly in the industries where immigrants are most likely to be employed. An increase in investment would mitigate the effects of increased immigration on workers as a whole. Existing theoretical simulations that take investment into consideration show very small effects of immigration on low skilled natives and on average a small positive effect for U.S. residents as a whole." [Center for American Progress, 4/4/06, italics original]

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