Increasing Illegal Immigration = Fiscal Responsibility

Immigrants are great for the federal balance sheet. Why? They don't file for tax returns but have taxes withheld.

Illegal immigrants are paying taxes to Uncle Sam, experts agree. Just how much they pay is hard to determine because the federal government doesn't fully tally it.

But the latest figures available indicate it will amount to billions of dollars in federal income, Social Security and Medicare taxes this year.

One rough estimate puts the amount of Social Security taxes alone at around $9 billion per year.

Paycheck withholding collects much of the federal tax from illegal workers, just as it does for legal workers.

The Internal Revenue Service doesn't track a worker's immigration status, yet many illegal immigrants fearful of deportation won't risk the government attention that will come from filing a return, even if they might qualify for a refund. Economist William Ford of Middle Tennessee State University says there are no firm figures on how many such taxpayers there are.

"The real question is how many of them pay more than they owe. There are undoubtedly hundreds of thousands of people in that situation," Ford said.

Dave Barry on Taxes

Via Andrew Sullivan, some gallows humor:

Taxpayers: It's almost April 15, and you know what that means. It means the Miami Dolphins already have been mathematically eliminated from the playoffs.

But it's also time to file your federal tax return. Yes, this is a pesky chore, but remember that paying taxes is not a ''one-way street.'' When you send your money to the government, the government, in return, provides you with vital services, such as not putting you in prison. The government also uses your money to pay for programs that benefit all Americans, such as the Catfish Genome Project.

CGP is real, as are plenty of other crazy/preposterous examples of government spending listed in Barry's article.

Happy Tax Day!

To celebrate, let's recall the Jane Galt Tax Plan:

1) Get rid of all our poverty programs, except those aimed at the disabled, and temporary unemployment assistance, and institute the negative income tax. That is to say, the system should be continuously progressive, from a steep negative rate of up to 100% on very low earners, gradually declining until it zeroes out around $28,000 a year, and then rising gradually until it maxes out around 35% on the top brackets.

2) Eliminate FICA and pay for Social Security and Medicare out of general revenue. It's time to stop pretending it's a pension system, when there are no assets in the "trust fund"

3) Eliminate the corporate income tax

4) Eliminate the special treatment for capital gains. All income should be taxed at the same level, regardless of its source.

5) Eliminate all deductions. Period, end of statement. No mortgate, student, child, etc. All causes are equally worthy in the eyes of the person who possesses the deduction; it is a waste of our time as a nation to sit around arguing about who deserves what.

6) Just say no to the Value Added Tax. In theory, it's a good tax. In practice, because it is extremely hard to tell what proportion of the price of anything represents the tax, it removes the good and natural pressure upon tax rates.

7) Get rid of the estate tax, and tax the capital gains on whatever is sold.

Explication if you click through. Needless to say, I don't think I'm in disagreement with any of the seven proposals. And there is no way in hell that any of them will be enacted, except (possibly) #7, which is the least damaging of any simply because of its small scale. In time, #2 might become necessary or at least we might transition to that point de facto. #4 is common-sensible enough that some bold legislator or president might propose it as part of a larger tax plan and sneak it through, but it would never pass on its own.

Elsewhere, we learn that in order for a flat tax to be revenue-neutral, it would have to be ~ 32% for all income above $35k (all income under $35k would be untaxed as a standard deduction).