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Putting Theory To Work: Using Current US Immigration Policy To Tax and Destroy Legitimate Businesses

by Gerard M. Chapman

The current enforcement only immigration policy of the US government is roundly applauded by those who contend that "We are a nation of laws; let's act like it!" They would be less excited about that policy if they understood it is a policy of tax and destroy. A short history of immigration helps put this point into context.

In 2005, Senators Kennedy and McCain introduced legislation that, among other things, would have reformed our immigration laws, and given millions of workers the right to obtain a temporary visa status. The bill never came to a vote of the full Senate. In the House of Representatives, Rep. Sensenbrenner and his colleagues introduced HR 4437, a bill that would have made millions of undocumented workers and their employers felons. Although that bill passed the House, it never went to a conference committee because McCain Kennedy never got out of the Senate. Neither did the 2007 Senate bill that arose out of the ashes of McCain Kennedy.

Since then we have seen a number of smaller bills pass through both houses, but none of them have created any visa category for millions of essential workers.

What has been passed, however, is legislation that increased funding for nation wide enforcement. In addition, ICE regulations set to go into effect March 28, 2008, will increase penalties for I-9 and related violations by as much as 25%, some totaling $16,000 per worker per offense. Asset forfeitures and other penalties also are on the table.

This scenario is not new. During Prohibition, "revenuers" as they were aptly called, sought out makers of illicit whiskey to appropriate their product, impose substantial fines, and bring criminal prosecutions where warranted. The ICE enforcement regime is in the same business: finding employers who violate the prohibition against employment of undocumented workers; seizing their assets and records (and essentially putting them out of business); and imposing harsh and sometimes fatal fines.

Those employers who have the misfortune to be caught in this trap will suffer the same fate as the moonshiners did during Prohibition: they will be taxed out of existence. True, this is not a uniform and fairly applied tax, but a tax it is nonetheless. The power to tax is indeed the power to destroy, and today's enforcement only immigration regime is proof positive of this truism. Much like IRS does in its field, ICE is trying to use harsh penalties against a small number of employers as a deterrent against all employers. However, as every business owner with essential workers will tell you, without those workers, the company will go out of business without them. Unlike our IRS tax system, tax fraud is not necessary to remain in business; in today's economy, millions of employers will go under if they cannot continue to employee undocumented workers. As a result, the effect of the enforcement only policy is extremely limited.

Absent Congressional action to reform the system and give these essential workers a visa category, what is likely to happen is that more and more employers will be taxed by this unfair system and they will begin to punish the people in Congress who have, by default or by intent, created this new tax.

A "repeal" of this tax may come, but only after the business community feels enough pain through business closings, asset forfeitures and prison sentences.

To this point, members of Congress have been intimidated by radicals who have railed successfully against immigration reform and who have helped create this new and pernicious tax. Only when Congress becomes more afraid of its normal business constituents than these tax radicals, will we see movement toward legitimate and long-overdue reform. Until then, ICE will continue to administer its new taxing authority in an effort to destroy as many businesses as possible.

Copyright 2008, Gerard M. Chapman

About The Author

Gerard M. Chapman has been a Board Certified Immigration Specialist since 1997. He graduated from UNC-CH in 1973 with a BA in International Studies, and in 1978 he received his JD, cum laude, from the University of Georgia School of Law. He is a Trustee of the American Immigration Law Foundation (2004-present). He served as Chair of the Carolinas Chapter of the American Immigration Lawyers Association (AILA) and as a member of AILA's Board of Governors from 1998-2000, and as Chair or Co-Chair of three national AILA Committees: the Immigrant Investor Visa Committee (1990-93), the Committee on Intracompany Transferees and International Managers and Executives (1993-94) and the Essential Worker Committee (1999-2004). He now serves on AILA's EOIR Liaison Committee, and on AILA's Essential Worker Committee, and has served as a Mentor for AILA (2003-present). He also is a member of AILA's 2008 Strategic Planning Committee. Mr. Chapman has authored articles in several AILA publications and has lectured at immigration seminars in the United States and abroad. He has been heavily involved in AILA's efforts to secure immigration reform on a national level. He is included in both the 2007 and 2008 editions of The Best Lawyers in America, in the specialty of Immigration Law. He has also been chosen for inclusion in the 2008 Super Lawyers list for immigration specialists in North Carolina. He is conversant in Spanish.

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