From Deseret News archives:
Tax-paying immigrants buoying Social Security
Not surprisingly, Martinez, 28, has not given much thought to Social Security's long-term financial problems. But Martinez who hiked for two days to enter the United States contributes more than most Americans to the solvency of the nation's public retirement system.
Last year, Martinez paid about $2,000 toward Social Security and $450 for Medicare through payroll taxes withheld from his wages like those of any other worker. Yet unlike most Americans, who will receive some form of a public pension in retirement and will be eligible for Medicare as soon as they turn 65, Martinez is not entitled to any benefit.
As the debate over Social Security heats up, the estimated 7 million or so illegal immigrant workers in the United States are now providing the system with a subsidy of as much as $7 billion a year.
Illegal immigration, said Marcelo Suarez-Orozco, co-director of immigration studies at New York University, could provide "the fastest way to shore up the long-term finances of Social Security."
It is impossible to know exactly how many illegal immigrant workers pay taxes. But according to specialists, most of them do. Since 1986, when the Immigration Reform and Control Act set penalties for employers who knowingly hire illegal immigrants, most immigrants have been forced to buy fake IDs to get jobs.
Available for about $150 on street corners in just about any immigrant neighborhood in California, a typical fake ID package includes a green card and a Social Security card. It provides cover for employers, who, if asked, can plausibly assert that they believe all their workers are legal. But it also means that workers must be paid by the book payroll tax deductions and all.
IRCA, as the immigration act is known, did little to deter employers from hiring illegal immigrants or to discourage them from working. But for Social Security's finances, it was a great piece of legislation.
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