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Past President Suggests More Illegals and Taxes Can Solve the Deficit

May 17th, 2010

May 17, 2010 original publish date
Nov. 19, 2014 format update

Past President Suggests More Illegals and Taxes Can Solve the Deficit

original article written by Net Advisor

WASHINGTON DC. One President’s Suggestion for the U.S. Debt Solution? Bring in More Illegal Aliens and Have More Taxes. Former U.S. President Bill Clinton said on 05-14-2010:

“the U.S. needs more immigrants and a value-added tax to help reduce the deficit.”

— (Source: The Hill.com)

The U.S. already has a population over 300 million people (Source: U.S. Census Bureau). How many more people do we need, and would that population increase translate into more jobs and more taxes?

There are two probable answers.

  • Having more people does not mean there will be more jobs. The contrary is more accurate, whereas more people will compete for fewer jobs. On September 26, 2009 the New York Times reported, that “job seekers outnumbered jobs four-to-one.” On February 9, 2010 CNN reported that, “about 5.9 job seekers, on average, competing for each job opening, according to the latest Job Openings and Labor Turnover survey from the Bureau of Labor Statistics.” Thus, if you increase a population you increase demand for existing jobs, especially when the job market is tight.
  • Increasing taxes is the likely scenario the government will peruse to pay for its every increasing deficit. But is this the only solution or is this the best solution?

Former President Clinton’s seems to suggest that if we just allow more illegals in the U.S. that would expend the tax base and help pay for the U.S.’s mega trillion-dollar deficit. I’d argue the the President’s rational on this issue is severely flawed.

  1. Most immigrants legal or not come to the United States with little or no money.
  2. Most illegal immigrates have little to no education.
  3. Any jobs that would be created assuming that jobs are available right now, could be a risk to take away jobs from existing citizens – legally here or not.
  4. The amount of income an uneducated or low educated worker, who is also not as likely to speak English in the U.S. will have a very difficult time getting a high or decent wage job – legal or not.

In attempting to find support for Clinton’s argument, I could see that if he was thinking about bringing highly educated workers to the U.S. from say India and Asia who tend to be more fluent in English, and there are high numbers of people who have advanced education in technology and medicine, sure that could help the U.S. tax base. But by doing this, the risk is that one would reduce or eliminate a job from an existing U.S. worker, in favor for someone willing to work in the USA for less money.

Value Added Tax? ‘Everyone’s Doing It’

Next, the former President suggested having a “value added tax,” that would ‘tax products at each stage of the manufacturing or distribution process.’ Mr. Clinton further said because our competitors are doing it (taxing) we should too (Source: The Hill.com).

A few flaws with this argument:

  1. When you tax a corporation, the cost of the end product goes up, not down.
  2. If a corporation becomes less profitable, the end result will be job losses, not job gains, thus reducing the tax base.
  3. Corporations tend to increase the costs of products to consumers to help offset new government taxes and regulation costs.
  4. If a corporation finds that it is too expensive to produce a product in the USA, they move the factory to China, Mexico, India, or wherever labor is cheaper, and where little to no regulations exist. This is exactly what happened as a result of NAFTA and GATT. NAFTA narrowly passed (vote: 234-200) and signed by President Clinton under a Lame Duck Session of Congress in 1994 (Source: Public Citizen).

Thus the suggestion that by bringing in more illegals that will solve, or solve in part the U.S. deficit seems to be a big stretch of an idea. There was no mention by the former President that the government should cut spending, seek alternatives to control entitlement costs, or seek to reduce other wasteful spending. That might be a good place to start before raising taxes on cash strapped Americans during a recession or contribute to increasing illegal immigration problems.

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image credit: REUTERS/ Robert Sorbo

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