Posted on 01/03/2005 9:51:55 AM PST by nanak
Barron's has an important lead article out today on "the underground economy" (password required).
According to Robert Justich, a senior managing director at Bear Stearns Asset Management in New York, current estimates of the illegal alien population (most news articles cite the old 8 to 13 million figure) are too low. He puts the figure at 18 million to 20 million.
The article's author, Jim McTague, notes some devastating consequences of the failure to enforce our immigration laws--and he does so with a bluntness that is unusual for the usually open-borders-friendly business press:
[T]he underground economy is undermining the effectiveness of the Internal Revenue Service, which is highly dependent on employees' withholding taxes. If the IRS could collect all the taxes it says that it is owed from the underground economy in a given year, then the current budget deficit would disappear overnight. And if the IRS could collect these taxes every year, then the nation would have surpluses as far as the eye can see. The IRS has estimated that its tax gap -- the estimated amount of taxes owed minus the amount collected -- is around $311 billion in any given year. The agency will produce a new estimate in 2005, and it could be as high as $400 billion, says former IRS Commissioner Donald Alexander.
McTague addresses pollyannas who note that our underground economy is smaller than other high-tax European countries:
To be sure, the U.S. underground economy, as a percentage of GDP, is smaller than those of some other countries. In a 2000 paper in a publication of the Independent Institute, a nonprofit research organization, Schneider found that Greece, as of 1998, had the largest underground economy, at 29% of its GDP, followed by Italy at 27.8% and Spain at 23.4%. Countries with high tax burdens and high social security costs lead the list.
But the sheer growth of the underground economy in the U.S. is cause for concern. If Justich's estimate of illegal immigrant workers is correct, the underground economy may now be growing at a markedly faster rate than the legitimate economy. Justich, working with Bear Stearns colleague Betty Ng, an emerging- markets economist, says he's found evidence of a larger illegal immigrant population by analyzing data on construction and on remittances sent from the U.S. to Mexico and other countries. He also had conversations with over 100 immigrants from Mexico, Brazil, the Dominican Republic, Guinea, China and Tibet. And he interviewed local business owners, real-estate sales people and police...
McTague also considers the impact Justich's research may have in Washington:
A larger number of illegal immigrants also would have a profound impact on coming discussions on immigration reform. President Bush proposes temporary amnesty for illegal aliens already in the country, allowing them to obtain permits to work legally for three years and stay longer if their jobs otherwise can't be filled by native-born workers. But if there are, in fact, 20 million illegal aliens, the Bush proposal could engender a situation not unlike the German unification of the 1990s, which triggered huge demand for social services in East Germany. Unanticipated costs here could be enormous.
The article should be must-reading for every member of Congress as President Bush prepares to foist his amnesty plan on America.
Start with a bttt, now to read
I suppose looking at historical tax rates vs. various measures (consumption, GDP, etc.) should be able to give you a good indicator of just how much is the IRS shortfall.
Looks like SAN DIEGO PADRES stadium is a HOME GROUND for MEXICAN TEAM.
Let's see, if we substiture 'exacerbate the' for 'engender a' we get a truer statement of the current situation, for it's already happening.
That's a keeper.
MARRY ME MICHELLE!!!
bttt
As much as I hate to get lawyers involved in anything, if our state/federal prosecutors and LEOs refuse to enforce existing laws, well then let 'er rip, sue the crooked employers for civil damages, class action or whatever.
More on this subject:
*******
DOBBS: An unbelievable story tonight out of Mexico, where officials have published a guide, a guide filled with tips for Mexican citizens to help illegal aliens safely cross the border into this country. Although the book warns against illegally crossing that border, it lays out step by step instructions on how to do just that. Casey Wian reports from Los Angeles.
CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexicans trying to sneak into the United States now have more help, from their own government. Mexico's Foreign Ministry is distributing a 24-page booklet titled "The Guide for the Mexican Migrant." It contains safety information about how to survive desert or river crossings, such as adding salt tablets to water to prevent dehydration, and warning not to cross during intense heat.
While the booklet does say obtaining a visa is the best way to enter another country, it then provides a step by step guide to crossing without one. From advice about dealing with coyotes or smugglers to tips such as following power lines or train tracks when lost. It's all there.
MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: Clearly, part of it is to protect the lives of people who are going to cross anyway. It's also intended to facilitate illegal immigration, to make it more normal, more routine and less risky, so that it continues.
WIAN: Much of the guide focuses on what illegal aliens should do if caught by the border patrol. It tells them not to throw rocks at border patrol agents, saying that would be considered provocation. It points out the rights illegal aliens enjoy in this country, and offers tips on how to avoid detection once they've made it across.
The Mexican embassy says the booklet is an effort to save lives, and denies that it encourages illegal immigration. The booklet is being distributed as a free insert in a popular Spanish-language cowboy comic book and over the Internet. Mexico has published more than a million copies of the guide.
WIAN: Today, a White House spokesman said he was unaware of the border crossing guide, but would look into it. One immigration control advocate, somewhat tongue-in-cheek, says he's surprised the Bush administration is not listed as a co-publisher, since it's done so much to encourage illegal immigration --snip----
http://transcripts.cnn.com/TRANSCRIPTS/0501/03/ldt.01.html
Aired Jan 03, 2005
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