The Math on Mass Deportation Doesn’t Add Up
President-elect Donald Trump campaigned on “Mass Deportation NOW!” His justifications for the necessity of this policy were easily dismissed by experts. New immigrants aren’t behind a murder spree, aren’t driving up crime rates, aren’t eating our pets, aren’t taking “black jobs,” and—in many cases—aren’t even here illegally. One area that is more difficult to assess, but also rarely mentioned by Trump: how mass deportation would affect U.S. government debt.Â
If Trump is looking for better intellectual cover for mass deportation, he could find it in a preelection report from the conservative Manhattan Institute (MI). Their report found that the influx of illegal immigrants since 2021 will add $1.1 trillion in federal debt over the lifetimes of the immigrants and that “mass deportations would significantly reduce the national debt over the long run.” This conclusion was seemingly at odds with a recent report from the Congressional Budget Office (CBO) that found a big and growing fiscal upside to the recent influx of nearly $1 trillion over the next decade.
The author of the MI study, Daniel DiMartino, generously shared his data and calculations, allowing me to see whether it was the CBO’s shorter timeframe or something else driving the divergent results. Last week, the Cato Institute published the results of my replication. I identified nine methodological problems in MI’s model that make deportation seem to benefit government budgets. Rather than a $1.1 trillion loss from recent arrivals, I find these immigrants provide a positive $4.9 trillion in net present value for the federal government over a lifetime.Â
How Is Such a Big Difference Possible?Â
Start with taxes: MI assumes that immigrants won’t increase tax revenues from businesses at all. This is obviously incorrect. Not only are many immigrants business owners, but businesses only hire workers because those workers will increase profits that will be taxed. Most analyses indicate that workers pay the majority of corporate income tax through lower wages. When workers are deported, they won’t be earning wages, and the businesses won’t be earning profits or paying taxes on them.
To determine future tax revenues, MI’s analysis assumes that recent illegal immigrants are very uneducated and won’t have high-paying jobs, with their report showing just 7 percent of recent illegal immigrants had a college degree, while almost half have no high school degree. Its estimate—which is based on a misreading of a decade-old blog post of mine—is at odds with more recent evidence. Demographers at the Center for Migration Studies have found that 20 percent of illegal immigrants ages 18 and up have a college degree.Â
It might seem surprising that so many illegal immigrants have college degrees. But many of the “illegal immigrants” that Trump and MI are talking about deporting didn’t even enter illegally. They came in a temporary status called “parole,” which Trump plans on canceling. Moreover, socialism didn’t just destroy the jobs of the poorest Venezuelans, Cubans, Nicaraguans, Haitians, and others. It ruined t
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