Israeli/Palestinian Peace Talks

Open email to Rep. Neugebauer and Senators Cornyn and Cruz (Texas): 

 

Dear Rep. Neugebauer and Senators Cornyn and Cruz,
    Our Secretary of State, John Kerry, is up and running on his new job. He is trying to make a name for himself and has succeeded in getting the Arabs and Israelis to sit down and talk with each other.
    The Jewish/Arab conflict has existed for a few thousand years. With this deep ingrained history of resentment, I sincerely doubt that there can be any significant resolution of differences by sit-down talks.
    I suspect that John Kerry has been able to get them to sit down by paying them US taxpayer funds. Both sides will receive money. They will sit and glare at each other, and that will be the end of that.
    I ask Rep. Neugebauer and Senators Cornyn and Cruz to find out how much the sitting and glaring is costing the US taxpayer.

Amnesty Cost

    The Washington Times has some comments from the Congressional Budget Office (CBO) , which yesterday released an analysis of the recently Senate passed Immigration Bill.
    The CBO says the $35 billion to be spent on 20,000 new border patrol agents and fencing would stop between a third and a half a half of future illegal immigrants.

Border Control Agents and Fencing    The southern border of the US is 1954 miles long and Wikipedia says 350,000 illegals cross this border each year http://en.wikipedia.org/wiki/Mexico%E2%80%93United_States_border. It Is apparent that 20,000 new border patrol agents and 350 miles of new fencing would only serve as an additional deterrent to new border crossing. I will not significantly dispute the CBO estimate of a 33 to 50% reduction in illegal border crossings, but that may be on the high side.
    Assuming a 50% reduction in effective illegal entries at the southern border, the question is whether we want to spend $200,000 to eliminate one effective illegal border crossing in a year. ($3.5 billion / 175,000 illegals). We could amortize this over 10 years to give an unrealistic estimate of $2000 per illegal, but it actually would be higher than that because of salary increases for the 20,000 additional border control agents plus maintenance of fencing.

$1 Trillion in New Tax Revenue    However, the larger objection I find with the CBO report concerns the statement that adding the additional workers,who are made legal by the amnesty provisions of the Bill, will boost the economy and lead to nearly $1 trillion in new tax revenue over the next 20 years.
    I don't see how adding additional workers made legal by the amnesty provisions boosts the economy. I can see a consideration of income tax revenues from new taxpayers formed by the declaration of amnesty.
    There are an estimated 12 million illegals in the US (http://www.cis.org/amnesty-for-illegal-immigrants-and-the-employment-picture-for-less-educated-americans,). Eight million illegals are already estimated to be employed. The 4 million illegals unemployed do not now pay income tax. The 8 million already employed likewise do not pay income tax, because their illegality does not make it possible for them to do so.
    With the creation of amnesty, the 8 million employed and perhaps half of the 4 million unemployed will be added to the federal income tax role for a total of 10 million people

    Illegal immigrants are generally unskilled, which means they are likely to draw a minimum wage of $7.25 an hour. Employers also also reduce medical expenses and other benefits for each employee by reducing worked hours below 40 for week. If the average work week is 32 hours for a new amnesty employee, yearly income will be $12,064 ($7.25 x 32 hours x 52 weeks).
    One reference says that a family of 4 will pay 5.3 % of its 2103 income in federal income taxes. A family of 4 likely contains 2 children, which means that for 2 new taxpayers in the family, the family tax bill will be $1278 ($12064 x 2 x 5.3%). For the 10 million new taxpayers, the annual increased tax revenue would be $6.4 billion or $128 billion over 20 years. This is somewhat less than 10% of the $1 trillion claimed by CBO.

        Another reference involves the IRS withholding tax calculator. For the "family of four", I assumed that each of the two adults would be considered a head of family with one child as a dependent. Filling in all the boxes with some reasonable deductions for medical expense and childcare, the calculator reported, "Based on the information you previously entered, your anticipated income tax for 2013 is $0. If you do not change your withholding arrangement, your withholding for 2013 will equal your tax and you will have nothing withheld. Your balance due will equal zero and you will not receive a refund". In other words zero increased tax revenue per year from 10 million new amnesty taxpayers.

        The IRS also has an Unearned Income Tax Credit. The IRS says, "The EITC Earned Income Tax Credit is a benefit for working people who have low to moderate income. A tax credit means more money in your pocket. It reduces the amount of the tax you owe and may also give you a refund".
    To determine the Unearned Income Tax Credit for new amnesty taxpayers with one child, I used the EITC Assistant Tool ( http://www.irs.gov/Individuals/Earned-Income-Tax-Credit-(EITC)-%E2%80%93--Use-the-EITC-Assistant-to-Find-Out-if-You-Should-Claim-it.). It reported, that the earned income tax credit is $3160. This is an IRS refund to taxpayers, who already pay no tax. Assume that half of the 10 million new amnesty tax payers apply for this credit. This calculates as a drain of $31.6 billion on tax revenue income to the federal government. Since the CBO likes 20 years, that's a negative $632 billion; a far cry from the positive $1 trillion claimed by CBO.
    I will grant that I've used some assumptions in challenging the CBO claim of an increased $1 trillion in tax revenue over the next 20 years, but these assumptions seem reasonable to me. Contrarily, I've not seen any calculations or basis of estimates for the CBO claimed $1 trillion.