POLITICS

Yes, Heritage study does account for increased revenues from immigrants who get amnesty

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Politics,Beltway Confidential,Conn Carroll,Immigration,Heritage Foundation

Considering the pro-amnesty positions of their ownerships, it is not surprising that liberal outlets like the Washington Post and BuzzFeed quickly denounced the Heritage Foundation’s new study showing that the amnesty portion of the Schumer-Rubio immigration bill would cost American taxpayers $6.3 trillion over the next 50 years. But they could have at least read the report before they criticized it. Here is BuzzFeed:

It does not take into account any costs or savings associated with the legislation’s broader reforms to the immigration system and border security — or the economic or tax benefits advocates for the bill hope will come with legalizing a vast gray economy.

And here is the Washington Post:

By ignoring the effects of legalization on the overall economy, Heritage failed to take into account the effects on federal revenue as workers emerge from the shadows to start businesses, travel without fear of arrest and deportation, earn higher wages and contribute to job creation.

Now, here is actual text from the Heritage report:

Most analysts assume that roughly half of unlawful immigrants work “off the books” and therefore do not pay income or FICA taxes. During the interim phase, these “off the books” workers would have a strong incentive to move to “on the books” employment. In addition, their wages would likely go up as they sought jobs in a more open environment. As a result, during the interim period, tax payments would rise and the average fiscal deficit among former unlawful immigrant households would fall.

So, contra BuzzFeed and WaPo, the Heritage study absolutely takes into account increased revenues from the economic benefits of amnesty. But, unlike the CBO, they then also look beyond the 10-year budget window:

After 13 years, unlawful immigrants would become eligible for means-tested welfare and Obamacare. At that point or shortly thereafter, former unlawful immigrant households would likely begin to receive government benefits at the same rate as lawful immigrant households of the same education level. As a result, government spending and fiscal deficits would increase dramatically.

Over a lifetime, the former unlawful immigrants together would receive $9.4 trillion in government benefits and services and pay $3.1 trillion in taxes. They would generate a lifetime fiscal deficit (total benefits minus total taxes) of $6.3 trillion. (All figures are in constant 2010 dollars.) This should be considered a minimum estimate. It probably understates real future costs because it undercounts the number of unlawful immigrants and dependents who will actually receive amnesty and underestimates significantly the future growth in welfare and medical benefits.

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