Illegal Immigration and Social Security

illegal immigration and social security

This week, Devin and John talk about one of the big myths about Social Security. Devin sees these comments all the time, that illegal immigrants are going to cause the collapse of the Social Security system. That’s just not true, and Devin and John explain why.

Most immigrants are working in this country, and if they are working in a W-2 type job, they are contributing to the Social Security system through their payroll taxes. And if they are working illegally, they will never receive any benefit from those taxes that they’ve paid. Their contributions to the Social Security system are bolstering the system, not taking from it.

The Social Security trustees report on the state of Social Security each year. In that report, more immigration is a benefit to the system. The IRS estimates that illegal immigrants pay 9 billion dollars per year in payroll taxes, and the Social Security Administration reports that in 2015, illegal immigrants contributed 13 billion dollars into the system. None of these illegal immigrants can collect benefits down the road.

And many of these immigrants actually file tax returns, in an attempt to improve their eventual bid for permanent residency or citizenship.

Individuals who are not eligible for a Social Security number often work under Individual Taxpayer Identification Numbers (ITIN). The IRS reported that, in 2015, individuals filing under an ITiN, paid $23.6 billion dollars in income taxes. The Institute of Taxation and Economic Policy believes that about half of undocumented workers are filing a tax return, and that approximately 80% of those ITIN filings are undocumented workers.

When you add together $13 billion in payroll taxes plus $23.5 billion in income taxes, that is a lot of money being contributed into the Social Security system by people who won’t get benefits from them.

John explains that for Medicaid, or Supplemental Security Income (SSI), you generally have to be a lawful, permanent resident of the country for five years. (There are a few exceptions to this rule.)

It is hard to wade into these waters without seeming political. None of this is intended to have anything to do with politics.

Resources mentioned in this episode:

https://www.ssa.gov/OACT/TR/2018/2018_Long-Range_Demographic_Assumptions.pdf

https://greenbook-waysandmeans.house.gov/sites/greenbook.waysandmeans.house.gov/files/RL32004%20-%20Social%20Security%20Benefits%20for%20Noncitizens%20(C).pdf

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