A fed sales tax would certainly catch up all who operate in the underground economy, but I don't see how this will effect illegals.
You've got to realize that a sales tax and income tax are extremely similar.
A sales tax is a percentage of GDP paid by the buyer. An income tax is a percentage of GDP paid by the seller. Have you heard of sales tax proponents talk about "embedded income taxes" in the price of goods? That is because it doesn't really matter whether the law says the buyer or seller should pay the tax, in the final analysis both a sales tax and an income tax are based on a percentage of economic activity.
A flatter tax system will boost real workers wages and simulatanieous reduce costs for businesses. This will stimulate more demand but wont increase inflation as the newer fatter tax freed paychecks will be buying these goods.
This could attract even more illegal workers as the economy will be needing more workers yet that lower tax rate could encourage both more automation and high wages for legal residents.
Bottom line is BETTER LAW ENFORCEMENT will reduce illegal immigration
Here's something else--tax reform has increased illegal immigration....taxes are practically non-existent for entry-level wages. That's thanks to the "tax the rich" rhetoric which led to having to prove one's self a compassionate conservative by almost eliminating taxes on low earners.
This gives the illegal workers a raise! They still work "on the books" in most positions, with fake ss#'s, which means that they get a lower withholding.
The "rich" still pay taxes for the schooling, prisons, and healthcare.
I am pro-tax in at least one regard. TAX ALL "ENVIOS DINERO" TRANSACTIONS OF CASH FROM THE US TO MEXICO. Tax it heavily. If illegals want to send their earnings to Mexico, let them send cash in an envelope and get it stolen, or let them pay 15% to send it electronically.
No brainer. We're losing the money, there's no downside on this tax. It'd amount to billions, and might help finance a prison or two.
Illegals would not be able to apply for these rebates ... unless of course they bought the appropriate illegal ID cards.
Presumably illegals would not be eligible for this refund which would increase the tax burden on them. That suits me fine! I doubt it would stop the flow but it would offset some of the harm they do to taxpayers. I doubt most of them make/spend enough money so that they would cease to be a burden for taxpayers. For example, each of their kids in public school costs taxpayers about $8000 per year and it would take a lot of sales tax to cover that let alone their more typical 3 to 5 kids.
You wanna stop the flood of illegals? Go after the SOB employers who hire them. Enforce the law. It is ILLEGAL to hire an illegal alien. Dry up the demand for them and they will go back home. The flat tax is a whole seperate issue.
Under our present system the cost of illegal immigration is created chiefly buy the children of the illegal immigrants.
The abuse of illegal immigration can remedied by our present immigration regulations should the federal government choose to enforce them.
Illegals don’t come to the US to avoid taxes. They come to get jobs here because there are none at home in Mexico.
Such a tax may increase tax collections on Mexican illegals but it would do nothing to stem the tide of illegal immigration because it would not in anyway relieve the economic pressure that drives them from their native land.
President Fox needs to increase his efforts to drive corruption from the Mexican government and increase capitalist reforms of the Mexican economy to relieve the disparity of opportunity North and South of the border.
Will a Flat Federal Sales Tax Stop the Flood of Illegals?
no
No
The FairTax, the national sales tax introduced in Congress by John Linder that would replace all federal income, payroll and estate taxes, would send a rebate to all persons with Social Security numbers to compensate for the sales tax paid for necessary purchases at the poverty level. Since illegal aliens won't have a Social Security number, they would be paying the national sales tax but would not receive the rebate (same with tourists). That would indeed be a disinsentive for illegal aliens to come to the U.S. to work, but given the low salaries paid in Mexico emigration to the U.S. would still be in high demand, but at least they'd be paying more than their fair share of sales taxes.
A national sales tax would have no effect on illegal immigration. It may cut into the amount they send home but will not stop them from coming here. As long as they can make as much or more in one month in the U.S.A. compared to 3-4 months in Mexico or wherever they came from they will still come here. The only ways to stop illegals who are coming here for work is to go after those that employ them. Illegals here for reasons other than work are a whole different story that can't be addressed without closing the borders.AWB
Ping!
Wouldn't work. Taxes will not do it. What would work is draconian but would definitely work.
1. Stop the wiring home of money from the USA to Mexico.
2. Prohibit children of illegals from getting a free education.
3. Stop giving babies of illegals citizenship.
4. Establish citizenship and residency requirements for receipt of all federal benefits such as social security, Medicare and Medicaid, neonatal care, etc.
5. Pass federal legislation requiring all state and local peace officers, plus other state and local goverment officials, requiring them to inquire of legal status when they encounter someone; also provide the funding to detain and incarcerate those illegals detected this way.
6. Pass federal legislation requiring (5) for hospitals and schools, otherwise the institutions receive no federal funding or subsidy.
7. Pass legislation that requires incarceration and significant fines for breaking immigration laws, but include liberal rules for suspending them for the first infraction. E.g., 30 days plus $1,000 for the first offense. For subsequent offenses, the penalty becomes punitive, e.g., 6 months and $10,000. So the second time the feds start seizing cars and attaching funds in bank accounts.
This would stop illegals. You don't need to hunt them down. When they emerge, they will eventually be detected. And everything is done humanely and with human dignity.
Take away our liberal social net, and watch them flock back home.
A federal sales tax could discourage the abuses and possibly stem the human flood