Check out the latest immigration news.
By Max Ehrenfreund, The Washington Post
Sen. Charles Grassley (R-Iowa) will propose legislation barring undocumented immigrants from getting tax breaks designed to encourage the poor to work. For Grassley and other Republicans, the breaks are “amnesty bonuses” that undocumented immigrants would be able to receive under the controversial policy President Obama announced last year.
The break in question is a payment that low-wage workers receive from the government when they file their tax returns. The more they’ve earned, up to a point, the larger the payment, which gives them another reason to work longer hours or to find a job if they’re not working already. It’s called the earned income tax credit, and the conservative economistMilton Friedman was one of its early proponents.
No less a conservative than Grassley himself gave an eloquent defense of the credit on the floor of the Senate in 2001. The message of the credit to poor families is that “work pays,” he said, discussing a bill that expanded the benefit.
“It is important to bear in mind the billions of dollars that have been provided in this bill to encourage struggling families to enter the workforce or expand the number of hours they work,” Grassley said. “Too often, we get focused on the welfare-specific provisions and completely forget or ignore the major efforts to encourage work that are contained in the Tax Code.”
Some of these arguments in favor of the earned income tax credit seem especially applicable to undocumented immigrants.
Obama’s plan would offer undocumented immigrants a three-year reprieve from deportation, along with a Social Security number. They’d become eligible for the earned income tax credit, which would increase their incomes and encourage them to work. They would be contributing more to the economy where they live and work, and they’d be wealthier and less reliant on public services.
That would be good news for the states that won an injunction against Obama’s policy. They have complained that undocumented immigrants are a burden on state budgets. Emergency rooms, for example, generallymust treat patients who are here illegally, even if they can’t pay. That would be less of a problem if fewer of these immigrants were impoverished. Meanwhile, the states will collect more in taxes if an expansion of the credit stimulates their economies.
Put another way, the earned income tax credit would function as a transfer of federal dollars to the regions where undocumented immigrants live — which is exactly what Texas Gov. Greg Abbott hasasked for as a reimbursement for the costs they impose on his state.
The credit would be extended retroactively for three years, the administration has said. A retroactive extension to past years can’t change the decisions immigrants have already made about whether and how much to work, so it would have little effect on the economy.
That said, Grassley’s allies make the opposite mistake when they suggest that the tax credit would also give future immigrants a reason to enter the country without papers.
“This is basic economics: if you want more of something, you subsidize it,” said Sen. Ben Sasse (R-Neb.) in a statement. “By subsidizing illegal entry with four years’ worth of new tax credits, the IRS would promote lawlessness.”
Since the benefits would only be available to those undocumented immigrants with children legally in the country born before Obama announced the policy, there is no subsidy for new entrants.
The controversy over the “amnesty bonus” illustrates the difficulty of the Republican position on immigration. Republicans have long sought to identify themselves as the party of growth, and comprehensive immigration reform would likely improve economic growth, as Rep. John A. Boehner (R-Ohio), the speaker of the House, said last year. In a smaller way, so would extending the earned income tax credit to undocumented immigrants. Yet there’s no way to achieve those economic gains without helping immigrants in way that many conservatives would view as amnesty. As a result, the Republican Party has been unable to agree on a solution to the problem of illegal immigration.