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Tax Law Professor Shows Research Proving that the Undocumented Don’t Exploit U.S. Economy


Since the enactment of the Revenue Act of 1913, the federal government has subjected non-U.S. citizens residing in the United States (with or without documents) to income tax in the same manner as U.S. citizens.

Low-income undocumented immigrants pay little or no federal income tax because of the offset against gross income of the standard deduction and personal and dependency exemptions. Their dangerous and underground existence, however, has led some undocumented immigrants to file as married filing separately taxpayers and to pay more federal income tax than they would if they were able to enter this country with their families intact. In addition to federal income tax, unauthorized workers pay Social Security taxes on every dollar of reported wages at 7.65%. Therefore, these poverty-level workers are paying federal income and payroll taxes at a minimum rate of 7.65%.

The above paragraphs were taken from a paper that first debuted in the spring of 2006 titled “Taxing Undocumented Immigrants: Separate, Unequal and Without Representation.”

Researched and written by Professor Francine Lipman, whose background entails everything from being a Certified Public Accountant, practicing law, serving as the Graduate Editor of the Tax Law Review, writing countless articles on tax and accounting topics for legal and accounting periodicals to teaching a variety of tax courses at the Chapman University School of Law.

In other words, Dr. Lipman has made it her life-long work to deal with cold, hard numbers. She is not one to be swayed by political rhetoric or public hysteria.

Professor Francine Lipman

And that is why this paper deserves to be recognized within the context of the ongoing illegal immigration debate.

Dr. Lipman says that the “widespread belief that illegal aliens cost more in government services than they contribute to the economy is undeniably false.”

It is an argument that has been made all along, but rejected because those making the argument (me included) don’t have Dr. Lipman’s credentials.

In her paper, Dr. Lipman systematically outlines why these overly publicized points of misinformation can’t be true.

Her logic, and mathematics, in proving the opposite of what is used as the #1 argument to rid this country of undocumented immigrants have to make us all wonder if those who are propagating this campaign of misleading information are just poorly informed and don’t have a head for numbers, or are purposely trying to turn the tide of public opinion against the undocumented.

Professor Lipman tells Latina Lista that if people think this current paper stirs emotions, her next one which will show that a history of institutionalized racism exists within immigration policy and the welfare system will reverberate even farther.

We hope that is the case – it’s not whether people agree or disagree but that they’re listening and caring enough to discover the truth for themselves.

Fundamental economic theory for immigration policy prescribes free movement of workers across borders to achieve free trade in the labor market. Migration of labor without restrictions across national borders could more than double worldwide real income. Unrestricted immigration could “increase production, create wealth and help reduce poverty.” Immigration restrictions impose costs by driving up the cost of labor, which in turn drives up the cost of goods and services to consumers,” destroying wealth and causing economic distortions throughout the world.

If the United States, as a market power, desired to maximize the economic welfare of its non-immigrants, it would eliminate all immigration quotas and “labor certification requirements” and impose appropriate tariffs on immigrants…

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