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Monday, February 25, 2008

The Major Economic Quandary

Looking at federal tax receipts tells me one thing. Everything else tells me another.

What if what I'm seeing on federal tax receipts is actually the replacement of illegal employees with legal employees?

The picture would be more consistent, but a lot worse.

Comments:
MOM

please elaborate a bit more.
 
Cashing out of profitable positions like stocks and real estate generates higher receipts and lags sometimes as much as 18 months depending. I'd look at sales tax revenues for a closer to real time metric.
 
Granted, but it wouldn't explain the the high FUT receipts. And really it doesn't explain withheld income and employment taxes (WIET) that much.

Idoc, federal unemployment taxes are moving up. WIET in Feb looks a lot better too. All the other economic reports still look to be poor and getting worse.

There is a lot of off-books employment with illegals, and there are also a lot of illegals who have an ITIN or SS number (sometimes not their own), work on the books, but don't pay much in the way of taxes.
 
a lot of illegals who have an ITIN or SS number (sometimes not their own), work on the books, but don't pay much in the way of taxes

Right. This is trivially accomplished by stating they have 6 or 8 or whatever number of dependents on the W-4 they fill out when they are hired.

For an obvious reason illegal aliens see no reason to be truthful on this form. It is because tax evasion results in deportation; instead of prison as for citizens.
 
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