Conservatives Must Reject the “Poor Are Parasites” Narrative

by David Bier on May 7, 2013 · 9 comments

in Features, Immigration, International

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When Mitt Romney made his comments about the 47 percent of Americans who don’t pay taxes and were supposedly “dependent on government,” many conservatives rightly condemned the remark, and Romney apologized. Now, a major conservative think tank is repeating his error, denouncing lower-skilled workers as a fiscal drain on the economy.

This week, the Heritage Foundation, the largest conservative D.C. non-profit organization, released a study intended to demonstrate that allowing the 11.5 million mostly lower-income immigrants who are currently in the country illegally to stay will harm America’s economy. The study focuses on immigrants, but its logic applies to millions of working Americans, almost half of whom had no income tax liability in 2011, according to the Tax Policy Center.

Indeed, Heritage makes quite clear that its conclusion that immigrants are economically superfluous applies equally to most Americans. If an individual does not have a college degree, they are a net fiscal drain on the economy, and in the Heritage methodology, that means that America’s economy would be better off without them. Thus, about 70 percent of Americans would be “deportable.”

Heritage is absolutely correct to point out that entitlements are unsustainable, but this is true with or without immigration reform—that is an argument for fixing entitlements, not stopping immigration reform. At current deficits, the federal government will spend $67 trillion more than it will bring in taxes over the next 50 years. By Heritage’s logic, that means America should be emptied.

As should be obvious, America would not gain from removing between 50 and 70 percent of its workforce. This fact exposes the fatal flaw in the Heritage study—it ignores the economic benefits that low-skilled workers bring. Under progressive taxation, the majority of taxes are paid by the highest income levels, but low-wage workers still form a critical base without which the top earners would suffer and tax revenues would fall.

Low-skilled immigrant workers allow Americans to engage in more productive endeavors. For example, the Fiscal Policy Institute found that immigrants operate 75 percent of New York City child care businesses. This allows American mothers to work and implies that these child care workers should get some credit for the tax revenues that those working mothers pay, but Heritage ignores this effect.

Moreover, according to a 2012 Department of Agriculture estimate, forcing out nearly 5.8 million immigrants—about half of the number in the country today—would cause GNP to drop by 1 percent for natives. This equals $150 billion per year, which would be $1.2 trillion more than the fiscal costs Heritage found over a 50 year period.

Most surprisingly, Heritage, which has a strong record of providing dynamic analysis for the effects of policy changes, fails to apply a similar approach to immigration, by excluding such factors as  increased economic growth. In 2012, UCLA economist Hinojosa-Ojeda incorporated these factors and found legalization would raise GDP by $1.5 trillion over ten years.

In the area of taxation, Heritage rightly recognizes that just because progressive taxation results in certain workers contributing fewer income taxes doesn’t mean that the poor are getting off tax-free. Higher earners ultimately pass tax costs along to them through lower wages from employers and through higher prices for merchants who sell to them.

But Heritage’s immigration paper considers this effect only once, for the corporate income tax, admitting that, as the Kansas City Fed found, workers pay 50 percent of that tax through lower wages.  The study ignores the fact that the same effect can be found in almost any tax intended to target the rich. Heritage should apply its basic assumptions about tax policy to immigration.

The Heritage study also never confronts the fiscal costs of the current enforcement-only approach. Immigration and Customs Enforcement pegs the marginal costs to deport a single person at $12,500—that’s at least $144 billion to remove everyone here illegally.

The most important point is that the working poor and middle class are not free riders—no matter where they are from. In an economy in which everyone is connected, nothing is free. Immigrants and lower income people are valuable contributors to the economy. Far from being parasitic, they are the base on which we all depend.

Conservativechick May 7, 2013 at 11:50 am

OMG! I have never heard a Conservative say the poor are parasites. I don’t know one person who would not help a fellow man in need. Not one. I do know many who get upset at the amount of fraud and abuse in our Welfare system, and with darn good reason. Don’t they realize they are taking benefits that should be there for people who NEED it? That’s worse than stealing to me. I have no problem giving a helping hand to anyone n trouble, but come on. Some of these people have better cell phones, computers and TV’s than I do. Being able to buy lobster and gamble with those EBT cards is just not right. I work very hard for my money at our small business. Why am I expected to just sit by and put up with this obvious abuse and fraud? It bothers me that I have no say how my tax dollars are spent. Get control over this and there will be a lot more money available for the actual POOR people who need it!

BMost May 7, 2013 at 12:02 pm

Well said! I wish in Williamson County TN more people would read this & understand that not everyone is taking advantage of the social services that our country provides. Not everyone has to attend an Elite University. It takes all kinds to keep our country working. So true the people who clean your house make your life easier so you can have more time to work or have a social time. Appreciate them, don’t judge!

Mj May 7, 2013 at 1:23 pm

I dont think that conservatives have ever been condemning the lower-skilled workers, but rather the system that gives them benefits from food stamps, subsidized housing, subsidized cell-phones, subsidized education, lengthy unemployment/disability/welfare payments, etc.

Kevin May 7, 2013 at 1:47 pm

Yeah, poor Americans are costly but why should we be IMPORTING MORE people who are without an education, without skills, and who are poor?

The Gang of Eight is explicitly saying that we need more uneducated poor people, and that’s why this bill will fail.

Paul Hoffmann May 7, 2013 at 4:30 pm

Sounds to me like a liberal straw man. I’ve never heard a conservative say the poor are parasites. Can you name them? Can you name one conservative who said that?

A few days after Romney’s 47% statement hit the public airwaves, David Corn had a book for sale on Romney’s 47%. It’s not possible to write, produce and market a book that fast. This was a Democrat ploy.

I think there’s a major difference between legal and illegal immigrants and anybody discussing the subject should make the distinction.

Curt Doolittle May 8, 2013 at 11:52 am

144 Billion to remove everyone who is here illegally? IF the defense budget is +600B, mandatory and discretionary are each about that, and if we can sink 2T into the economy without effect, then we certainly have 144B to deport them.

If we licensed private companies to deport individuals and gave them 10K apiece, I’m pretty sure that they’d turn a 50% profit on that. Easy.

ErikKengaard May 10, 2013 at 4:16 pm

“This allows American mothers to work and implies that these child care workers should get some credit for the tax revenues that those working mothers pay, but Heritage ignores this effect.”
Why do mothers have to work? Because immigration has driven wages down so that one breadwinner cannot support a family.
Do some research. How much did a drywall installer make in 1975, in today’s dollars. How much does a drywall installer make today?

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