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A Completely Screwed Up System
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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US citizen style...
Roadside squatting and shitting: Chinese Citizenism style.
ballsy, but they would have legalize drugs to make it work. doesn't matter anyway by 2020 it will be a latin america america.
I don't like the theft from taxpayers to illegal aliens or the theft period
Here is the actual report for anyone who cares to read it
http://www.cbo.gov/publication/43373
If you're poor now or if your house is about to get foreclosed on...you didn't do that...the Government helped you get there
Oh, well--if your house is being foreclosed on, you're a FAILURE, and you should suffer...Love, Ayn Rand
Just go back and re-read "Atlas Shrugged" another three times and you will "get it"...
Your grandfather was an illegal alien???
Bruce, your soft spot is between your ears. Typical lib, you feeeeel, but you can't think.
Get rid of the welfare system and the minimum wage. Then to become a citizen just ensure the person can sign a sheet of paper so he/she can pay taxes. Wages will fall to where they should be and nobody will receive benefits they aren't paying for. Everybody will have a job because it will be so cheap to employ people.
"Everybody will have a job because it will be so cheap to employ people."
So the closer we return to slavery, the better the employment numbers will look?
No. When extraneous costs which constitute a tax on working are are eliminated then more people will find work. For example, the middle aged women I know who work a few hours per week helping elderly neighbors could come out from under the table. There is plenty of work to do but not everyone can afford to pay for a social safety net when all they need is a few hours of child or elder care each week.
Infinite growth, here we go. The capacity to employ is independent of the environment.
Ask the US citizens of A, they stole entire continent and are guzzling so little of world resources...
fucking ban this prick already tylers. inane ramblings that never reach a point. i get dumber every time i read one of your posts. atleast the trolls make me giggle once in awhile
And most will not be able to afford the cost of living of working in America (as many can't now) since our public transportation is lousy (a reliable insured car and gas costs more than $ 4000 per year), our healthcare system for the poorly paid is worse and our education system is a disaster unless you have a lot of money.
The cost of living will fall as most wil not be able to afford the higher prices.
There will be a great outrush of illegals as they scamper southwards, back to the maize farms and familial support structures.
Small maize farms and familial support structures will once more become important in the US.
Divorce rates will fall as people relize it's cheaper to "work it out" than it is to divide assets into economically useless portions.
Teen chastity will rise as young people realize unwanted pregancy and/or children and/or marriage to lazy, unfit partners equals a life sentence of impoverishment.
No safety net means that moral character once more has economic value. Church attendance and the exercise of faith generally will increase.
Politics will become a teeny bit more honest as the slush/bribes will have been removed.
Public transportation will be encouraged as entrepeneurs take advantage of the masses of people who need to get around cheaply.
Employment will increase as businesses move back to the US to take advantage of the cheap labor force.
poverty will once more be a grinding, hellish experience, so uncomfortable that it will drive millions to educate themselves and use their creative potewntial to do better for themselves and their children. Now it is a cushy couch potato life, full of bread and idleness.
Suffering is necessary for the advancement of the soul. Get rid of welfare and minimum wage.
That simply isn't possible in a free market. When most are poor then they will interact with each other to provide goods and services which each can afford. Of course the government likes to stop the poor from working supposedly for their own good but then government is the problem as usual.
If you're depending on the system to educate you then you're only going to learn how to serve the system.
Yeah, you know, that is the kind of skewed perspective you get when you are so apt at stealing environments.
Magically, the poor will find the resources required to support their working.
Just remove taxation and pufff, resources are created.
So convincing when you look at the US balance sheet in terms of resources. The US imports nothing, it is simple, they could make it on Eastern Island...
who really owns texas
The Bush family and friends and their Bin Laden allies in Saudi Arabia.
For the last 30 years, the ruling DemonRAT/RepubliCON Party has implemented an unofficial (unlawful) open borders/non-enforcement/amnesty policy, as part of their surrender of sovereignty, directed by the Council on Foreign Relations.
Whether Reaglinton, Bushbama or Obamney, the Untied States gubmint consistently refuses to faithfully execute its responsibility under Article 4, Section 4 of the Constitution to "protect each of (the states) against invasion," intentionally allowing 20 million anonymous foreigners to invade and colonize the states. Now "act surprised" that the feds are encouraging them with our tax FeRNs to multiply like cockroaches. Yes, the same absence of the rule of law as with our home-grown financial terrorists, who walk freely among us after robbing billions in segregated customer accounts while the toothless lapdawg alphabet agencies look the other way like a referee on TV wrestling.
Meanwhile, for our own thafety, the Untied States gubmint: (1) gropes citizens' wives and irradiates their kids traveling within or between states, (2) bullies and bribes the states into gathering personal & biometric data and digital photos on all its citizen-drivers, accumulated in a massive federal database under the Real ID Act of 2005 and (3) orders 450 million rounds of .40 cal. jacketed hollow points and 170 million rounds of .223 (M-16) ammo.
Instead of loading for bear, better load for elephant, which will work fine on jackasses too.
Correction, the system has been dysfunctional since the IRS was formed.
The "system" as it were is dysfunctional...been true since Clinton. The only thing the hateful pols are waiting for is an actual "structural failure." to date the "mere" bankruptcy of "a bunch of counties in California" still isn't enuf. Still believe to paraphrase the Clintons "it will take a State. It will an Army." not that anyone including me wants this to happen of course. "all the wrong people win again" under that condition as well. "all eyes on healthcare" which is the TOTAL corruption of the political class versus the American people. If these clowns can't follow John Robert's lead and cross the aisle WHICH IS YOUR PHUCKING JOB YOU PHUCKS...then I don't give solvency becoming insolvency much time at all.
Dude, if youir handle is your situation, then you know that this goes back to the aftermath of the American Revolution, to the ... to the Goths, ... to the first individuals, ...
Playaz' go play.
- Ned
{And yes sirz and madamze, it truly sucks for the kidz to have to put up with the non-support and stuff. unfortunately, 't'were ever so.}
immigrants , especially illegal immigrants should be encouraged. this is what made america great.
the reason immigrants are a 'problem' is because 30 years ago, we decided to export our jobs to china and outsource american manufacturing.
people , liberals, were so up in arms about workers right in the united states they forgot that the main problem was keeping jobs in america, whether illegal jobs, high paying jobs, or not.
instead, you have people blaiming 'immigrants' for our problems, when it is actually the outsourcers and trade lobbys. it's been a miracle that the u.s. has been a desireable refuge for immigrants for the past 30 years. this is changing as america becomes less attractive economically and as the government becomes more facist.
you caanot argue for less government all the time and then argue that the govenrment should get on every immigrants ass. the dirty little secret is that a certain degree of illegal immigration is acceptable and healthy and reflects the desireable quality of america as a destination for people who want to work hard and build and not rely on welfare.
if you want to bitch on corruption. 4 billion of tax rebates is the wrong target for bitching. bitch on food stamps, bitch on social security disability, bitch on medicare part D and the bevy of drugs that our government pays for old people to consume.
i disagree with you bruce on this one. your father came here. things are no different now. i only hope that if other parts of the world become hyper oppressive to their minorities, that once again the united states remains an attractive and open society for them to escape to. How do you think the U.S. will survive if it closes its doors. closed societies are dying socieities.
bruce , i'd like to hear from you on this. really, how are you greatful regarding your father and the freedom this country afforded him by not prosecuting the 'law' so that you could have grown up unmolested by the state, ins, and other institiutions.
how can you be such a statist here? i mean, as an anti-statist , surely you should be against labor laws and other laws that prevent OUR nations citizens from doign work in OUR nation. do you not see labor and immigration laws as part and parcel fo the plan to ship jobs abroad , or at least, the reason the trade interests were so succesful at deploying wage arbitrage?
surely socialist isolationist countries can only survive with mercantilist policies correct? and japan doesnt seem to be doing so well after decades of socialist isolationism.
a certain measure of protectionism accomodates open borders to welcome illegal immigrants and legal immigrants to do cheap labor. once you open up your ports to chinese slave labor made products ---where does this balance go???
How? Simple. He is a US citizen.
In US citizenism, the last in closes the door is an essential element.
What is good for oneself has to be shut down to the others.
See how it works with weapons: US citizens acquired weaponry and just after that, declared that weaponry too dangerous for the others to own and develop.
Same systemics here, US citizenism at work.
How about this
The bottom-rung pay 'tax' to the TBTF (indirectly) via the inflation (which isn't really happening) that was created by the private FED, that the TBTF owns.
Twisted, I know, but there it is, 'negative taxation'.
Fret not, that cow is getting milked.
Who cares if the Govt sees it first as a revenue stream, as the private FED/TBTF just prints the difference anyway (thus increasing the inflation ... that isn't happening).
As long as it's being effectively stolen, so that people don't have any cream left to live on, so do it on pay-day lenders and TBTF's credit cards? ... where upon that are milked again.
They are being 'taxed' ...
When did the IRS spring into life again? ... and who brought that about again?
I have a small biz, I am confortable financially.
F@ck it. I am not going to kill myself to give my neighbor $5000 got her 8 kids. I am done, I will work hard enough to continue my current life style, aside from that screw it. Free Food, Cell phones, and housing for people that don't work.......
Someone else can work 60-70 hours a week to pay for Sesami Street in Pakistan and Solindra!
Screw you to the welfare state
Going Galt!
Going GALT? You and a lot of the rest of us. It's the only way to hasten the end of this tyranny.
What "tyranny"? When are you morons going to understand that the perfect Randian utopia is ALREADY HERE! If you're not succeeding, you're FAILING--get it? The system's not broken--it's working to perfection! The joke's on YOU, "Atlas Shrugged" fans--the joke's on you...
"I have a small biz, I am confortable financially."
god, i hope it's not a carwash.....
LOL...
Indeed, there are a lot of small businesses that wouldn't amount to shit if not for Uncle Scam putting extra money in the pockets of its customers.
Lets face it there are billions of people on this planer....A lot of them would like to come here......If we let them all in, the things that make America, America will no longer exist...Currently legal immigration to the US is approx 1 million people a year. Illegal immigration adds anywhere from another .5 to 1 million a year....That means more use of our crowded schools, more and longer waits in hospital emergenct rooms, more cars on our streets, more students in each classroom. That means more more people competing for low wage jobs when millions of Americans already cannot find a job. Our infrastructure is crumbling under current loads and millions of more people will only make that situation worse, not better. Millions of new people over the next decade, mean less open space, more energy consumption, more pollution....
I am all for immigration, but it has to be intelligent and well controlled. For decades to immigrate here, you had to have someone that would guarantee that you had a job and a means to make a living without relying on governmental services. That ended awhile back. New immigrants arrive here daily with their welfare cards in hand. The current system is insanity on steroids.
This country is broke, adding more people ain't gonna make it better for anyone except the politicians courting their votes.....
End the welfare/warfare state and the free market will regulate the amount of immigrant workers through simple supply and demand.
Human migration is dictated by flows of resources.
Free markets wont end the US as a consumption sink.
People will always look to move to the US to consume the resources they cant consume at home because those resources have to be exported to the US to be consumed.
Zoom zoom zoom!
Get those wheels smoking!
Kick out ALL illegal immigrants (yes all 11.2m of them). Raise the minimum wage to $10 hr then move your business to Baja. Simple
Yeah, it's all those brown people! They're the problem! Yeah!
Smoke 'em and everything will be good again!
The line forms here for government goon squads, and the top 10% get black Kevlar jammies with SWAT written on them!
1984, 1934, who can tell?
the majority of illegals in this country are Visa overstays....
You don't know what to do? Enforce the law as written, rather than taking into account how "good" the people who have run afoul of it maye be otherwise. Problem solved.
The enforcers seem to have their own problems
http://www.whistleblowers.org/index.php?option=com_content&task=view&id=...
http://topprioritymovie.com/
http://www.infowars.com/the-terror-within-former-dhs-officer-julia-davis...
all one needs to do is examine the natural resources that mexico brings to the table. they are outstanding and can easily support their population if used wisely. this entire issue is a political one; political corruption on both sides of the border.
-007
Just shows what a "democracy" will get ya. The U S isn't supposed to be a democracy but it has acted like one for long enough that the resulting Frankenstein monster of a country sure looks and acts like one. I reckon it all went wrong when "all men were created equal" meant that a man was defined as a white, land-owning, male. Hasn't it been all down hill from there? (Hey, it's a slow weekend and ZH needs the hits. I feel obliged to throw out some red meat.)
"Forgiveness is of high value, yet it costs nothing." -Unknown
Luke 18:9-14
The U.S. could regain the high ground in short order if only WE would look to Christ, and respect those who don't but are still "of God." Just saying...
One of my favorite bumper stickers of all time said "Jesus is coming and boy, is he pissed"
Another one is:
Don't argue with your wife,
DICKER!
Blather on.
Cloward-Piven strategy says it all
http://www.americanthinker.com/2009/02/the_clowardpiven_strategy_of_e.html
thank you both