NO, they don’t; in fact, undocumented workers help shore up our Social Security system. You see, they pay millions, no, make that billions with a “b” to a system that they may not collect from. They pour an estimated $13 billion into the system but collect only $1 billion per year. Why? Some use fake social security numbers when they work but use taxpayer identification numbers (TIN) when they file tax returns. They may not be able to collect their contributions later when they retire. And what happens to that extra $12 billion that they don’t collect? Well, it’s used by U.S. residents and citizens like you and me. Baby Boomers, in particular, benefit the most from these uncollected funds.
Don’t believe everything that you read about illegal aliens wrecking our economy. Their contributions help our Social Security System tremendously but somehow never get credit for it.
You must have heard of speculation about the insolvency of our Social Security system – that it may go bankrupt. For now, it’s undocumented workers that prevent this catastrophe from happening. They are shoring it up with contributions that they may never claim.
Let me explain briefly how this works: When employers send in W-2 forms with Social Security numbers that don’t match numbers on record, the Agency routes the paperwork to an Earnings Suspense File, where it sits until people can prove that the wages are theirs, allowing them to collect retirement benefits later. Maybe.
Undocumented workers also help fund public schools and local government services by paying sales and property taxes. The Institute on Taxation and Economic Policy (a think tank in Washington, D.C.) estimates that undocumented workers pay about $10 billion in state and local taxes.
* * *
Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
* * *
He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at email@example.com.