Illegal Immigrants Cost America $38 Billion Annually Via Remittances—It’s A “Hidden Tax”


The Remittances Illegal Immigrants Send are like a Hidden Tax

Imagine the worst possible tax you can think of.  What would it look like?

If you’re like most people, you thought of some fat, curly-haired king sitting in a palace spending your money on foppish garments and a harem of French harlots.  That’s a bad tax.  No doubt about it.

But at least he’s (presumably) your king, and he’s spending the money in your country.  Eventually you will see that money again, no matter how frivolously he spends it.

I can think of a worse tax: pretend the above situation’s exactly the same in every respect except now he’s not your king.  He’s king of another country.

That’s worse.

It’s bad enough you’re paying for someone’s pomp and circumstance, but now he’s not even buying the pomp locally—you’ll never see that money again.

Paying taxes, no matter how inefficient, is better than paying tribute to a foreign land.  Make sense?

And therein lies one of the biggest problems I have with illegal immigration: illegal aliens come the US, work (rarely paying income tax), and then send a large chunk of their earnings back home via remittances.

Remittances are a hidden tax that Americans pay for the privilege of underpaying illegal workers—and it adds up.

Illegal Immigrants Send $38 Billion Abroad In Remittances Every Year

Now I admit this estimate isn’t perfect: we have to make some assumptions, but I think they’re reasonable assumptions.

First, let’s assume that remittances from America are either sent by first-generation legal immigrants, or illegal immigrants.  Let’s also assume that these two groups are sending equal amounts of money home per person—legal immigrants make more per capita, but send a much smaller proportion of their pay abroad.  I think these are fair assumptions.

Now let’s get to the numbers: according to Pew Research America lost $133.6 billion in remittances in 2015—$136.9 in 2017 dollars.

Given that there are 40 million first generation immigrants, and (at least) 11.1 million illegal immigrants, this means there are 51.1 million people sending remittances abroad.

If we divide up the number of dollars remitted according to this proportion, we find that illegal immigrants likely remit $38 billion per year.

That’s a lot of money.

For perspective, it’s as much as the entire annual GDP of the US states of South Dakota, or Montana—or the European country of Serbia.

My point: illegal immigration is a complicated issue, and there are many costs associated with it that often aren’t considered.  For example, very few people are talking about how a surfeit of aliens floods the labor market, depressing wages for American citizens.

And fewer still are interested in calculating the overall costs on a state-by-state basis.

We’ve done some of that work: you can check out our articles on California, Texas, and Illinois for more information on that.

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About Spencer P Morrison 98 Articles

JD student, writer and independent intellectual, with a focus on applied philosophy, empirical history, and practical economics. Author of ‘America Betrayed’ and the Editor-In-Chief of the National Economics Editorial. His work has appeared in publications including the Daily Caller, the American Thinker, and American Greatness.

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