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A Completely Screwed Up System

Bruce Krasting's picture





 

The following chart from the Congressional Budget Office (CBO) shows who pays federal income taxes in America.

It should come as no surprise that individuals with the highest incomes pay the most in taxes. The top 20% pay 94% of all income taxes according to the CBO. It should also be no surprise that the bottom two rungs (40%) of the income groups pay very little taxes. But it was surprising to me that the bottom 40% actually pay a negative income tax.

 

How does one pay negative taxes? Tax transfers to low income groups exceed their tax liabilities. Two examples of these transfers are the EITC (Earned Income Tax Credit) and ACTC (Additional Child Tax Credit). The following chart from the Congressional Research Service (CRS) describes the effective negative tax rate phenomenon.

 

For those earning up to $26,000, there are no income taxes levied, but those individuals pay FICA (Social Security taxes). The value of the tax credits available to those individuals is greater than their SS taxes. Therefore, the group, ends up with a negative tax rate.

I favor this type of income redistribution. I think high-income groups should end up supporting lower income groups. I have no problem with negative effective tax rates for individuals and households that are at, or below, the poverty line.

 

But….

 

The CRS reported:

 

 

individuals who were not authorized to work in the United States received $4.2 billion by claiming the refundable portion of the child tax credit—the additional child tax credit (ACTC).

 

“How is this possible?” How could illegal workers end up receiving federal tax credits? The IRS is encouraging the process.

 

The IRS issues two kinds of tax identification numbers. A traditional SS# is available for all legal residents. Illegal residents can obtain an ITIN (Individual Tax Identification Number). The use of ITIN has exploded 10-fold over the past decade. In 2010 3.2m people used these numbers to file tax returns and obtain refunds.

 

 

The use of ITINs is just one component of the problem. The Social Security Actuary estimated that 75% of illegal workers are using a fraudulently obtained SS# to get work. The IRS/SS knowingly collects this tainted money.

 

Combining the ITIN data with the 75% estimate by SSA leads to an estimate of 12m taxpayers contributing (and getting refunds) who shouldn’t be in the system at all. (Note: the Census Bureau put the number of unauthorized aliens at 11.2m in 2010.)

 

What happens when a cash incentive to have children is made available to people who live in the country? They have babies, of course. From the CRS:

 

Do existing laws permit illegal workers to get tax rebates and benefits?

For refundable tax credits like the EITC and ACTA, the answer is a very clear “No!” But that hasn’t stopped the IRS from allowing this to happen.

 

However, it is completely legal for an illegal worker to obtain Social Security benefits. Illegal workers who have contributed to SS (FICA taxes) for a minimum of 10 years are illegible to receive retirement benefits on the same schedule and terms as an individual who works legally. (Note: I was shocked when I first learned this, but it is true {Link}).

 

How many undocumented workers are there that might be eligible to get Social Security benefits? Pew answers that:

35% of unauthorized adults have resided in the United States for 15 years or more and that 28% have resided for 10 to 14 years. The report also found that the proportion of unauthorized aliens who have been in the country at least 15 years has more than doubled since 2000.

 

Based on the Pew numbers, 62% of the 12m unauthorized aliens will be eligible to receive benefits in their lifetimes. These workers have contributed to SS, so the law says they can get monthly checks. But the reality is that a significant percentage in this group is paying negative effective tax rates after taking into consideration the refundable tax credits described above. In the end, the lower 30% of income groups (including undocumented workers) end up “paying” for SS out of one pocket, while getting a similar sized refund check in the other pocket.

 

 

What are my points/objectives in writing about this?

 

- Our immigration laws (and how they are applied) are completely idiotic.

 

- The IRS is facilitating the problem by allowing refunds to be paid to those filing with illegal SS#s (or legally obtained, but fraudulently used ITINs).

 

- Stirring the pot on the issue of illegal workers and their rights to receive Social Security benefits. It is now more than two years since the Chief Actuary of the SSN, Stephen Goss, spoke about this matter (Link). This is a political issue. The country deserves an update on how big this problem is before November. The candidates should be asked what they plan to do about it. Illegal workers have contributed as much as $240Bn to SS (10% of all assets).

 

- Stimulate a discussion on a very complex and emotive topic.

 

 

Notes:

In my heart I have a soft spot for illegal immigrants. My father came from Europe in 1939.

 

I know many illegal families. I like them. They are good parents. They are hard workers. They would be happy to pay taxes as regular citizens do. They want to own property, cars and have their children get an education.

 

But the numbers are too large, and the consequences too significant. In the end, this about the law.

 

So I don’t know what to do.

.

 


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Mon, 07/30/2012 - 11:08 | Link to Comment geno-econ
geno-econ's picture

 Was it Marx who sald "Each according to his ability to avoid taxes" ?

Mon, 07/30/2012 - 17:23 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"But the numbers are too large, and the consequences too significant."

@Bruce:  By "numbers are too large", you can't seriously be referring to the hilariously tiny scraps being thrown at the brown people, would you?  Fuck man, it's like the banksters tossing a quarter for tip, "Hey, thanks for building all those shitty houses so we could rape the plebs."  A few billion dollars, that's "too large" for you?  What's the weekly debt service, Bruce?  How much of that is due to transfer payments to illegal aliens?  How many billions do we spend on transfer payments to countries that give us absolutely nothing in return?  You don't have a soft spot for them.  Bullshit.  This whole thing where you're trying to assauge your guilt over the "career" you made for yourself, while simultaneously and surreptitiously justifying it ("LIBOR no big deal!"), it's getting old dude.  Wake the fuck up.

Mon, 07/30/2012 - 10:57 | Link to Comment ebworthen
ebworthen's picture

The tax code is engineered to be completely screwed up.

It is designed to reward cheaters and punish the responsible.

Sound familiar?

Mon, 07/30/2012 - 10:52 | Link to Comment dizzyfingers
dizzyfingers's picture
Insanely Rich Tax Cheats Hid Over $21 Trillion In Offshore Accounts Jul. 25, 2012, 4:53 PM
Tax Cheats Hid Over $21 Trillion In Offshore Accounts
Turns out the super rich are even richer than we thought. According to new research by economist James Henry, there was a conservatively estimated $21 to $32 trillion being held in private offshore tax havens in 2010.As if this wasn't already a large number, the $21 trillion is held by 100 million people, while $9.8 trillion is held by just 100,000 people.For those keeping score at home, that means on average these 100,000 people tucked away about $98 million in offshore accounts."Since most of the missing financial wealth belongs to a tiny elite, the impact is staggering," says Henry.
"For most countries, global financial inequality is not only
much greater than we suspected, but it has been growing much faster."Had this money been taxed as income, Henry estimates it could have brought in around $190 to $280 billion. That doesn't even include revenues from estate, capital gains or other types of taxes. With this much money being left on the table, it makes sense the government would want these tax cheats to pay up. One program seems to offer a solution. Recently the tax man has given tax cheats a limited time to fess up and pay taxes without any penalties, and so far the U.S. has collected over $5 billion of tax revenues it may never have gotten its hands on otherwise.
Mon, 07/30/2012 - 10:49 | Link to Comment crawldaddy
crawldaddy's picture

and the super rich still dont pay their fair share.

 

FACT top 400 americans have more money than the bottom 50% of americans.

 

Thats 400 with more money than 160,000,000 COMBINED

Mon, 07/30/2012 - 10:16 | Link to Comment larz
larz's picture

wow Vooter has it all figured out.... Vooter for prez - NOT

Mon, 07/30/2012 - 10:04 | Link to Comment dannynewmexico
dannynewmexico's picture

I live in New Mexico, and when I get to town and to a grocery store

it seems that I'm one of the only people to pay cash for my groceries

and everyone else is a non english speaker and has a food stamp

credit card........

 

 

what are those people going to do when the cards don't work anymore

 

 

survivingsurvivalism.com

Mon, 07/30/2012 - 10:00 | Link to Comment Vooter
Vooter's picture

ANYONE who considers themselves a disciple of Ayn Rand should not be complaining about ANYTHING that's happening in this country. Illegal aliens? Mass shootings? No jobs? Huge drug problems? Massive TV consumption combined with zero reading comprehension? Buy-or-die mentality? WELCOME TO THE JUNGLE, BABY. It's survival of the fittest. If you're not succeeding, you're FAILING. Seriously--why are you people bitching about anything? You fucking idiots--Ayn Rand's dystopian paradise exists RIGHT NOW!

Mon, 07/30/2012 - 10:51 | Link to Comment crawldaddy
crawldaddy's picture

yep, when they are being mugged or  their hous being broken iinto, they'll scream' why?",   why indeed.

Mon, 07/30/2012 - 09:40 | Link to Comment Old Poor Richard
Old Poor Richard's picture

I grant no tax burden sympathy towards those rich enough that they never have to say, "I can't buy this because I can't afford it."  The fourth quintile is being squeezed out of a second car or a boat or a DSLR.  The top quintile isn't squeezed by the big bad tax man out of any material goods, ever--only arbitrary digits on paper.  The supposedly "unfair" tax burden chaps their balls it but doesn't affect their lifestyle and standard of living in the slightest. 

Still, I'm not a class warfare-ist and I only begrudge their attempts at lowering their tax burden because it comes out of my pocket; they are waging class warfare against me.  Instead of buying politicians who then shift the tax burden off of the upper class and onto the middle class, these aristocrats should instruct their bought politicians to CUT GOVERNMENT SPENDING thus lowering the burden on everybody.  But that never happens. 

When the rich support any tax scheme short of complete elimination of the personal income tax as Ron Paul proposes (without substituting an even more regressive national sales tax or VAT!), they are engaging in class warfare and making enemies of the other 99%.

 

 

Mon, 07/30/2012 - 09:28 | Link to Comment petolo
petolo's picture

Guaranteed annual income, anyone? I know it stinks of socialism but by removing al of the paid pygmies who run the giant bureaucracy machine  and  account for much more$$$$$ than the"poor" .

Mon, 07/30/2012 - 09:03 | Link to Comment lindaamick
lindaamick's picture

1) BIG Transnational corporations are behind the illegal immigrant curtain.  It provides them with cheap labor in the US and slaves to abuse.  The US government is owned by these corporations so the small benefits to these people is provided by government subsidy to the bigcorps.

2) The owners of society LOVE nothing more for the labor class to be divided among themselves.  "Hate the immigrants".  "Hate for race issues".  "Hate for any kind of differences"  AND demonize the poor because they can not afford recourse.

3) Until the labor class in the US begins to view itself as a class with similar interests, the small elite group that runs things will contine their pursuit to own EVERY PENNY.

Stop feeding this process with this type of article.

Mon, 07/30/2012 - 08:46 | Link to Comment Vooter
Vooter's picture

So why not just LEGALIZE them? I'm not worried about an illegal alien taking my job, and if you are, then you've got a bigger problem than illegal aliens. Obviously, there are plenty of jobs out there that pay like shit and offer crappy conditions and no benefits, and if you Randians don't take them (and don't forget--they are the EPITOME of the system you love to champion), who will?

Mon, 07/30/2012 - 08:56 | Link to Comment ConfederateH
ConfederateH's picture

I favor this type of income redistribution. I think high-income groups should end up supporting lower income groups. I have no problem with negative effective tax rates for individuals and households that are at, or below, the poverty line.

Let me rephrase that for you Bruce, in truth english:

I favor this type of income redistribution. I think the government should steal at the point of a gun from high-income groups to support their lower income constituent groups. I have no problem putting people in jail who don't want  negative effective tax rates for individuals and households that I like that are at, or below, the poverty line.  I am a total progressive tool.

 

Mon, 07/30/2012 - 08:59 | Link to Comment d edwards
d edwards's picture

Or put another way "From each according to his ability, to each according to his need."-Karl Marx

Just fucking wonderful.

Mon, 07/30/2012 - 10:54 | Link to Comment TwoHoot
TwoHoot's picture

So the financial incentive is to have NO ability and HUGE need.

People aren't stupid. They understand this at an intuitive, instinct level and act accordingly.

 

Mon, 07/30/2012 - 08:15 | Link to Comment Shizzmoney
Shizzmoney's picture

We will all be paid like immigrants soon:

http://bilbo.economicoutlook.net/blog/?p=20443

The Australian government’s response was to the rising long-term unemployment was to introduce a privatised management scheme. They created a parasitic private sector fringe – the Job Network – in effect, a new industry, whose product was unemployment.

The conservatives who took office in 1996 were not the founders of the scheme however. The neo-liberal ideology had been infused in the so-called workers’ party – the Labor Party – which is also in government at present.

The creation of a competitive market for the provision of employment assistance began with the “Working Nation’ White Paper of 1994, which was a belated response to the massive 1991 recession – that was caused by failed government policy.

Under the Keating Labor Government, one third of the public assistance effort for the long-term unemployed was given to contractors in both private and not-for-profit agencies. This quasi-market was subject to oversight by an independent government regulator and agencies were paid on a ‘fee-for-success’ basis.

This was the basis for the “new industry” – profiting from unemployment.

Mon, 07/30/2012 - 07:46 | Link to Comment BeetleBailey
BeetleBailey's picture

FAIR TAX......

Anything else is just fucking with the numbers, and trickery.

Period.

Mon, 07/30/2012 - 06:46 | Link to Comment Disenchanted
Disenchanted's picture

 

 

The root(s) of our problems go back much further than many want to acknowledge...

 

Financial History:

http://www.yamaguchy.com/

http://www.yamaguchy.com/index2.html

 

and more current...

 

The network of global corporate control (19 Sept. 2011)

http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

 

Abstract

The structure of the control network of transnational corporations affects global market competition
and financial stability. So far, only small national samples were studied and there was
no appropriate methodology to assess control globally. We present the first investigation of the
architecture of the international ownership network, along with the computation of the control
held by each global player. We find that transnational corporations form a giant bow-tie structure
and that a large portion of control flows to a small tightly-knit core of financial institutions.
This core can be seen as an economic “super-entity” that raises new important issues both for
researchers and policy makers.

 

 

Check out section 8.3 in the .pdf, the top control holders...most of which are banks of some form or another.

 

How much of the percentage of taxes do these transnational corporations pay? After all the SCOTUS has decreed that they are people too...

Mon, 07/30/2012 - 06:15 | Link to Comment dizzyfingers
dizzyfingers's picture

"look at the highest quintile more closely..."

And take away those phony "charitable" (and family-tax-avoidance) foundations.

Mon, 07/30/2012 - 04:54 | Link to Comment lamont cranston
lamont cranston's picture

This happened, rather fittingly, on July 4, 2011.

I received a phone call from the police just after 8AM where my business is located 90 miles away from where I have lived since 1987. Two of my employees, of which I had 7, all with ITINs, had totaled a company truck during personal use. Each had signed a contract written in "Mexican" that that was cause for immediate discharge. That did it for me. Not a damn one would admit the ability to speak English. Want to find out if they do? Just call one lazy ass you have hired on a temp basis (yes, there are bozos) a cocksucker and see how fast their "comprende" is. 

I fired all seven on July 5 and have relied on contract labor since that day - with the stipulation of NO Green Card or ITINs to the subs. Yes, I am frazzled and now have to drive about 60K a year to manage sites. And am getting along just fine.

At age 58 and 32+ years of operating a business I found out we do NOT need illegals, period. Try it...you'll like it. 

Mon, 07/30/2012 - 03:34 | Link to Comment Haager
Haager's picture

Blame the government, blame Obamney and blame the rich - they are profiting from the situation.

Those immigrants accept bad jobs for a living, they do pick any chance to get some extra cash because the government allows them to do so. And seriously, they are kind of poor and they stay kind of poor with low chances on good education and so on. I mean, whats their family income, what are they spending, what do they save? It's the system that is to blame, fully.

Higher wages would help improve the income for all people wether immigrants or not, reducing tax-refunds and tax-cuts on income will soften the effect of higher wages. Taxes on non-reinvested capital gains need to be taxed more heavily (scream!).  

It is needed to look at the highest quintile more closely, because the upper 10 percent of that quintile doesn't really pay that much - it's the (upper)-middleclass that is paying. And strangely enough, these people act as if they were part of the upper 10 percent (the upper 1-2 percent of the total, earning more in a month than what the first and second quintile gets per yea) regarding tax-cuts or tax-increases.

 

Mon, 07/30/2012 - 03:00 | Link to Comment dogfish
dogfish's picture

I favor this type of income redistribution. I think high-income groups should end up supporting lower income groups. I have no problem with negative effective tax rates for individuals and households that are at, or below, the poverty line.

Right here is the problem.If your giving there will be lots of takers.

 

Mon, 07/30/2012 - 06:17 | Link to Comment cynicalskeptic
cynicalskeptic's picture

The 'high income' qunitile - from the 20% to the top 1/2 or more like top 1/10 of 1% are bearing the burden - the really wealthy and our corporate overlords are getting away with murder  

The issue is the PERCENTAGE of income that is paid in taxes.... The top 20% - ESPECIALLY those at near the top at the 1-2% level making $100-300,000 are paying a dsisproportionate  share.  If you make low 6 figures you're really getting screwed, losing 40%+ of your income to various taxes while the top 1/10 of 1% making MILLIONS and hundreds of Millions are paying -FAR FAR LESSS    Hedge fund gusys making hundreds of millions don't pay income tax at 343% they pay capital gains taxes -  at most 20%  and I GUARANTEE YOU THEY AVOID ALL THEY CAN EVEN ON THAT.

The 6 Walton heirs (Walmart) are worth more than 30% of the remaining US.....    WTF?  6 people - INHERITED WEALTH - are worth more than over a hundred million other Americans  - and I guarantee you that a good number of those Americans work less than 30 hours a week in Walmart (more and they'd be due benefits) while a good number of those collecting food stamps and Welfare shop at Walmart - making those 6 people even richer.  As for corporate taxes.... how many of the FOrtune 500 pay NOTHING in corporate taxes?   (don't ask how much they get in government funding via various routes - research grants, ax 'incentives' contracts, and more)

Welcome to the new Feudalism - where even if you're making 6 fiugures you're screwed cause you'd better be putting in 60-80 hours a week, never taking vacations and better be saving like mad because your ass is fired at 50 to be repolaced with a cheaper younger workhorse and you're never going to make that money again.  That's a good number of even the '1%' in the US.... their stay at that level is hard earned and only temporary.

 

The bottom 20% in the US have gotten far less from the US government than the wealthiest  saved in inheritances taxes under Bush

 

No wonder there's what - an estimated 32 TRILLION dollars stashed in offshore accounts for tax avoidance purposes???? 

http://www.latimes.com/business/money/la-fi-mo-tax-havens-20120723,0,656...

Mon, 07/30/2012 - 01:48 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...it's all evil. THE ONLY TAX SYSTEM THAT WILL EVER SUSTAIN FREEDOM AND INDEPENDENCE FOR THE INDIVIDUAL IS A COMMERCE TAX ONLY SYSTEM. Your first vote confirms your labor at the point of purchase. The fact that anyone would agree to steal from the next generation through debt and usury is a criminal act equal with throwing a child on a flaming alter as a short term claim of dominion. The U.S. does not have a commerce tax only system because it takes power away from the evil antichrist new world order mark of the beast bastards that have a date with their own judgment, which is death and the black hole. 

There is no cause to provide and ounce of labor for this current system. It is now a globalists wet dream and a complete breach of security. The entire U.S. Federal Government is a corrupt failure and anyone who votes in this two party system needs to go straight to hell. 

Judging the spirit of the American people at this point is easy. Americans as a whole have no soul, and no cause as a whole to be blessed by Heaven, to the contrary. 

All the spineless people, that come up from South of the border etc..., they take the pressure off the corrupt bastards and do nothing good for anyone. They are criminals, and anyone who supports them, including the so called religious morons that claim to be Christian, they only assure the poor and labor in general suffer on both sides of the border.

The fact is, the usual suspects, the nwo boys, are hell bent on their borderless global drive to complete the prophetic universal mark of the beast system of debt and tax that seals all individuals. These people are the enemy of man kind and all need to be put down, but, the people have proven to be weak lukewarm fools. This generation has no hope of regaining what people thought they fought, suffered and died for in the name of the U.S. Constitution and the Republic for which individual freedom and liberty was to stand for. That spirit does not exist on whole among the American people. 

The largest employer is the government and the largest private employer is Wal Mart, that sells crap made in communist China. America is the second child of China in that light, it has aborted it's self. 

Land of the Fiat fool is fallen ...is fallen.

Mon, 07/30/2012 - 01:18 | Link to Comment Dingleberry
Dingleberry's picture

If TPTB didn't want a shitload of illegals here.....we wouldn't have them. Obviously, they want them here. For a myriad of selfish political and financial reasons that solely benefit them. ANd at YOUR expense. 

Mon, 07/30/2012 - 06:22 | Link to Comment cynicalskeptic
cynicalskeptic's picture

It's all about cheap labor - if you can't ship the jobs overseas you bring in cheap labor......   that applies to illegals working meatpacking or construction or H1B's working writing software.....  meanwhile even A/P and A/R are being offshored by the big banks - following DP.....   nevermind all the factories and call centers....   ANY job that can be shipped to where cheaper labor is will be....     'free trade' is BS.    

welcome to the new Feudalism

 

some saw it coming -      http://www.youtube.com/watch?v=4PQrz8F0dBI

 

and no matter if it's a Dem or Repub... all serve their coprorate overlords.

Mon, 07/30/2012 - 10:29 | Link to Comment Cthonic
Cthonic's picture

Awesome clip for anyone who hasn't watched; especially unnerving in retrospect is to watch CFR shill Laura Tyson smugly selling globalism "We also know incidentally from a whole series of studies that foreign direct investment by American firms actually helps create jobs in America".  Starting to wonder what sort of institution the London School of Economics really is (she was dean of the Hass School of Business from 2002-2006, long after the true effects of WTO-creating GATT 1994 were well known).

Mon, 07/30/2012 - 01:13 | Link to Comment Erazo
Erazo's picture

All this for 4 billion, really? We wish all the us deficit were only 4 billion.

Mon, 07/30/2012 - 01:14 | Link to Comment Hiro Protagonist
Hiro Protagonist's picture

Do you see what everything you mentioned has in common.?.... Yep The state setting price for goods and services. Remove the state monopolies, remove the state subsidies and let everyone in who wants to participate sort of like they did 250 years ago. It will work, not perfectly but better than another system.

Mon, 07/30/2012 - 09:11 | Link to Comment Vooter
Vooter's picture

Yeah, but that would entail allowing brown people who speak a language other than English into the country, and we all know how well that would go over with the white, Christian, quarter-acre kings and queens of the American heartland...LOL...

Mon, 07/30/2012 - 00:24 | Link to Comment etresoi
etresoi's picture

I do not see a problem.  Each dollar paid to producing babies is a dollar the usgov can not spend bombing innocent people, throughout the world.

Mon, 07/30/2012 - 01:49 | Link to Comment Lonewar
Lonewar's picture

Ok, I dont post much, but I have to expand on this article a bit.

I am a Welfare Worker in Souther California, and what Bruce is talking about is just the tip of the Iceberg...

The following is how the system is set up.

Male Mexican gets wife pregnant, and then comes north across boarder to earn the money to have a coyote bring wife up. Male Mexican is desparate to earn the money FAST, so he will bid down the price of any job he thinks he can do (And with the machisimo bullshit, that is almost anything). He will usually get $10 to $12 dollars an hour for jobs that in the 1970's made $30 to $40 (Construction etc.) (This is part one of the harm they are causing, buy being here, they are driving up the supply of workers which is driving down wages, and benefits, which is both weakening the tax collection system, and is burdening the public safety net.)

Once wife (Girlfriend as they were never legally married) gets here, they both will apply for Medi-Cal (California Medicaid). They will state they have zero income, and so will have Emergency and Pregnancy related benefits given to them for free. (This is why the illegals are always in the emergency room, Emergencies are the ONLY thing (Along with Pregnancy) that Medi-Cal will pay for, so they goto the place that they think is the ONLY place that will offer them medical services for free (Emergency only benefits, so they think they must goto the emergency room, even for a stubbed toe)) (This hurts the safety net by providing these illegals with the most expensive medical care available, all on the public dime.)

Once baby is born, they will now apply for CalWORKs and CalFresh (California Transitional Assistance to Needed Families (TANF) and California Food Stamps). They will lie and state that either dad is NOT working, or that he has left the home. So now they are getting $300.00 in Cash Aid each month, $200.00 in Food Stamps, and medical care that costs them ZERO (Not even a co-pay or deductible) (So whenever their kid sneezes they take them to the doctor and hope the kid will get a prescription that the child doesnt need, so they can sell those drugs for a profit as well.) And all the while, dad is still working 50 to 60 hours per week at $10 to $12 dollars an hour. Oh, and while doing this, they dont need to put up with the CalWORKs work requirement rules (Must work or volunteer at least 35 hours per week in a two parent household, or 32 hours per week in a single parent household, as neither of the parents are "Work Eligible Individuals".

After 4 or 5 years they will usually have 3 to 4 babies, so its time to hop to a new state. (They do this as each child after the first does NOT increase their Cash Aid benefit (Unless they work the system properly)) so they can get an increase in their Cash Aid benefits

Come tax time, they do file taxes. They will claim whatever amount of money is needed to get them the maximum refund, and not a cent more or less. (It is NOT uncommon for me to see Undocumented Citizens getting refunds of ~$7,000.00 each and every year.) It doesnt matter the actual amount of money they make, they will ONLY claim the amount needed for the maximum refund. (And NO, you dont need to supply W2s, you can claim Self Employment...)

And while doing all of the above, they will also apply for Section 8 Housing, Low Income Subsidy Utilities, free cell phone, Women and Childrens food supplements (WIC), etc...

So, when all is said and done, they are living in a Rented 5 bedroom, 3 bath house, that runs $1800 per month and are paying ~$200.00 due to Section 8, ALL of their utilities together will run them about $100 per month due to the subsidy, they will get about $700 per month in Food Stamps, another ~$150 a month in specific food benefits due to WIC, once per year they will get a $7,000 bonus from the IRS, and they have better medical coverage than you do Bruce, and they get that for FREE (You said about ~8 months ago you pay about $40,000 per year for your policy, and I bet you have to pay something when you goto the doctor, and there are pre-existing exclusions that it wont cover, whereas with Medi-Cal, they dont pay anything, and it will cover damn near everything except for optional or cosmetic stuff (And it will sometimes pay for that too))

So all together they are getting about $19,200 in rental subsidies ($1800 minus $200 is $1600 times 12 months) plus $7,200 in Utility Subsidies (~$700 per month for utilities minus the $100 they pay (As a single guy living alone in California, my utilities are about $500 per month, and I dont have cable...)) plus $8,400 in Food Stamps, plus $1,800 in WIC, plus ~$2,000 in various and sundry other "Poor" benefits, plus $7,000 in IRS Bonus, plus ~$40,000 in Medical Insurance, plus $36,400 in unreported Wages (60 hours per week at $10 per hour (Yes they get Overtime at time and a half) for $700 per week in earnings, times 52 weeks). So any illegal family that comes here and works the system properly has an income equivalent to ~$122,000 per year, and people wonder why we have so many of them, and why the system is collapsing... Or how the illegals can afford to buy houses and boats and escalades, etc...

Oh and dont get me started on how an illegal (in a family of 4) making $15.00 per hour can LEGALLY get Food Stamps, while an American Citizen working right next to them (With the same family of 4) is Over Income and doesnt get shit. (The illegal's income is prorated by the number of illegal persons in the household, so if both mom and dad are illegal then we only use HALF the income in the calculation)

GRRRR, ok, done ranting for a while =(

Tue, 07/31/2012 - 09:44 | Link to Comment rwe2late
rwe2late's picture

The US relationship has not benefited Mexico since the pro-slavery Texas immigrants seceded.

“I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism. …

I helped make Mexico, especially Tampico, safe for American oil interests in 1914...”

- Major General Smedley Butler USMC

Nowadays, NAFTA ruined many, many Mexican farmers and forced them to become migrant laborers.

Prohibition II in the US has worked to corrupt both Mexico and the US, and of course the border smuggling area. The world’s biggest prison industry also works systematically to generate criminal gangs, hard-to-employ felons and break up families.

What might have been a workable temporary fix aimed primarily to protect the health and welfare of children living in the US, has become overwhelmed by the steep rise in unemployment and homelessness coupled with the flood of immigrants.

The trillion$ spent on needless wars and bankster handouts short-changed the domestic physical and social infrastructure. The problems of outsourcing, debilitating foods and ZIRP interest rates have been foisted upon the local governments. All the state and municipal annual budget deficits total only a few months of Pentagon spending.

Screwed up as the welfare system may be, it is NOT the source of the problem, nor is the cause of US malaise.

Mon, 07/30/2012 - 09:14 | Link to Comment Vooter
Vooter's picture

So LEGALIZE them...

Mon, 07/30/2012 - 08:57 | Link to Comment King_of_simpletons
King_of_simpletons's picture

Come tax time, they do file taxes. They will claim whatever amount of money is needed to get them the maximum refund, and not a cent more or less. (It is NOT uncommon for me to see Undocumented Citizens getting refunds of ~$7,000.00 each and every year.) It doesnt matter the actual amount of money they make, they will ONLY claim the amount needed for the maximum refund. (And NO, you dont need to supply W2s, you can claim Self Employment...)

 

 

They can only get refund on taxes that they paid no ? 

If they do not have w2 or pre-pay self employment taxes what refund do they get. This does not make sense.

Mon, 07/30/2012 - 18:20 | Link to Comment Lonewar
Lonewar's picture

King_of_simpletons,

No, the Earned Income Tax Credit (EITC) is a REFUNDABLE Tax credit, which means that even if their tax liability is reduced to $0, if there is some EITC Credit remaining, the federal government will cut them a check for that amount.

So, say an Illegal (Dad, Mom (Both Illegal) and 4 Kids (All the kids are born here)) claims $12,800 in Self Employment Income, they would then use their Personal Exemptions, Child Exemptions, and potentially Itemized Deductions (if they own a home) to reduce their tax liability as far as possible. With that done, they then get the EITC Credit and Additional Child Tax Credit of $6,751.00 which is offset by the $1,571 in Self Employment Taxes they would have to pay for a Net IRS Bonus of $5,180.00.

And they will do this whether or not they actually earned any money that year. If they get a W2 for any earnings, their IRS Bonus will just increase. And even if their W2s are up to roughly $28,000 they will still get $6,751 as a Bonus... and it could be more if they actually had any income withheld from their Taxes.

Mon, 07/30/2012 - 10:34 | Link to Comment SilverCoinLover
SilverCoinLover's picture

Agreed, this doesn't make sense. If they are filing taxes and claiming self-employment, wouldn't they have to pay double (about 15%) FICA taxes on whatever income they claim, being both the employee & employer share? This would have to cut down their refund somewhat.

Mon, 07/30/2012 - 17:13 | Link to Comment Lonewar
Lonewar's picture

Yes, they are paying the full 15% Self Employment portion; however, that is ONLY paid on the amount claimed. They work for cash for the year, and pay NO taxes there, (Usually making about ~$32,000 per year) and at tax time, they will claim Self Employment of ~$25,000 (Or whatever the max is for the number of kids they have for EITC) and allow the Non-Refundable tax credits (ATCA, etc) reduce that Income, which reduces the Liability, then they use their EITC refund to pay whatever Self Employment Taxes they need to and get a refund.

Unlike most self employed persons, they dont file quarterly tax returns or pay quarterly amounts, and if they do get a job with an actual employer, they will claim exempt on their W4 so that no taxes are taken out, (Other than SSA and Medicare) and they see this as a good thing as they will only have half of the deduction from their Tax Bonus as the would normally have.

And while a different poster was right in that Food Stamps and Cash Aid are a drop in the bucket compared to the Military, those two programs hurt the STATES most. (States usually have to pony up 50% of the budgets for Cash Aid to get the Federal Matching funds, and that is usually the biggest item in most States budgets.) While at the Federal Level, I do believe that Medicaid and Medicare are about equal to the Non-War portion of the Military budget, and the unfunded portions of them blow away whatever budget the military cares to envision...

Mon, 07/30/2012 - 07:52 | Link to Comment Bruce Krasting
Bruce Krasting's picture

Tks for this.

bk

Mon, 07/30/2012 - 02:30 | Link to Comment etresoi
etresoi's picture

This is better than I thought, thanks for the detail.

Each 100k spent is one lest bomb dropped on innocents

Tue, 07/31/2012 - 21:41 | Link to Comment FeralSerf
FeralSerf's picture

The bombs are and will continue to be paid for with printed money if necessary.  There's an unlimited supply of it available to the right people.

Mon, 07/30/2012 - 01:06 | Link to Comment FeralSerf
FeralSerf's picture

And those babies grow up to be new slaves for our masters.  Win-win!

Why is it so hard to understand that the flock owner wants his sheep to breed and make more sheep?  Why is is so hard to understand that the flock owner doesn't mind if a few unbranded sheep from a neighbor's flock happens to join his flock?  The flock owner shears the foreign sheep and makes mutton stew from them just like the local sheep.  They don't taste much different.

Mon, 07/30/2012 - 00:07 | Link to Comment dolph9
dolph9's picture

Bottom line:

In America, the middle and upper middle class serfs pay the taxes.  They pay these taxes to support the underclass serfs so they can have subsidized rent, food, and schooling.

The elite figure out how to avoid paying taxes, or they have so much money that taxes are inconsequential to them.  Like having 10 million in capital gains and having to pay a 15% tax.  Yes that's alot of tax money, but, big whoop, how did it affect you.

Sun, 07/29/2012 - 22:37 | Link to Comment Fecklesslackey
Fecklesslackey's picture

It is so totally obvious ... Tax the Rich, after all they only pay 94% now

Mon, 07/30/2012 - 00:50 | Link to Comment FeralSerf
FeralSerf's picture

They own all the livestock (We have met the livestock and they are us), so those thieving mofos can pay 100% (or more).  Does a pig farmer make his pigs pay part of his taxes?   I don't think so.

Sun, 07/29/2012 - 22:25 | Link to Comment FleaMarketPete
FleaMarketPete's picture

Simple answer:  America should annex Mexico.  The La Raza mongoloids are obviously incapable of managing themselves so we should declare them a protectorate and clean house.  We could maximize their resources in exchange for citizenship and seal off the boarder with Guatemala, which is much more manageable. It's a win/win and both sides would be better off.

Mon, 07/30/2012 - 01:49 | Link to Comment Cast Iron Skillet
Cast Iron Skillet's picture

you really think the Mexicans yould be better off under U.S. American rule?

Mon, 07/30/2012 - 01:11 | Link to Comment FeralSerf
FeralSerf's picture

America already annexed half of Mexico in 1848.  Why didn't they annex all of it then?  Santa Ana could have been "convinced" to give up all of it then just like he was "convinced" to give up half.

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