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Heritage Foundation Makes Some Progress
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March 20, 2007, 08:03 PM
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David Francis writes in another fine report on immigration in the Christian Science Monitor:

The cure for illegal immigration is "not difficult," says Robert Rector, a senior research fellow at the conservative Heritage Foundation in Washington. The government simply has to sternly enforce the laws against hiring illegals. If jobs for these foreign-born workers dry up, he says, so will their flow into the US.

This is really very hopeful-especially coming from a key Republican think tank. Now, the big thing that Rector will need to understand, is just what "sternly" means when the potential benefits of illegal immigration are so huge to employers. The current market value of an immigration slot is $100,000. When there is such a low chance of getting caught, fines would have to be substantially higher to be an effective deterrent.

law wasn`t enforced, Rector says, because of a "bizarre coalition" of Democrats, who hoped to "import" future Democratic voters, and business and industrial groups who wanted cheap, flexible employees.

It takes a "bizarre coalition" to get anything done in the US political system. Opposition to immigration is spread among less well to do Americans—and those folks are enormously politically divided. The only way effective immigration reform will come is through and effective bipartisan effort.

Rector calculates that the average household of a high school dropout pays about $9,600 in taxes, including payroll, sales, excise, possibly income (often offset by the Earned Income Tax Credit), property, etc. That same household receives about $32,000 a year in government services. These include Social Security, Medicare, education, welfare, highways, police and fire protection, etc.

The US should select its immigrants, preferably from among the well-educated who pay more in taxes than they receive in government benefits, Rector says. Neither he nor Krikorian says it`s necessary to expand guest-worker programs to provide employers with more employees.

The question here is whether ability to pay taxes is necessarily an accurate measure of contribution to the society. I`d tend to look at the overall increases in overall taxes paid plus increases in property values on a per capital basis to measure the success of immigration policy. However, that is a global measure-not an individual one. An immigrant being able to get a job means little if it simply means some existing American is working in a worse job-or edged out of the job market altogether. We need to look at maintaining-or increasing value per American over time.

Ideally, I would like to focus much more taxation on the very rich-and less on working people, which would help get us away from the idea that taxes paid or income represent a measure of individual contribution. For example, the great Kary Mullis created a patent sold for $300 Million-but got only $10,000 in a bonus(plus some contractor compensation). Mullis created an entire industry with his invention. America needs more people like Mullis in the US-and fewer people like the wealthy executives running his former employer Cetus.

A lot of the benefits and costs of immigration are externalities completely unrelated to individual compensation. You simply can`t assess the contribution of a genius like Steinmetz or Tesla by their compensation.

Perhaps we ought to have futures markets in immigration rights-so the folks capable of accurately identifying immigrants capable of making a contribution that might not be appreciated for years could have an incentive to do so-but such a market would also have to accurately assess all costs to operate effectively.