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Illegals Creating Social Security Windfall: S&P
Illegal immigrants are creating a huge windfall for the Social Security trust fund, a new analysis by the investment research firm Standard & Poors reveals. Undocumented workers often get jobs using fake Social Security numbers. Wages are withheld from their paychecks for Social Security and Medicare taxes. But when the Social Security Administration gets W-2 forms from their employers, it can't match their names and Social Security numbers with information in its records. The taxes these workers have paid go into the Social Security trust fund and their wage data goes into an electronic "earnings suspense file, according to a report on the S&P analysis in the San Francisco Chronicle. "The undocumented workers can't claim the Social Security benefits they have earned, creating a windfall for the system, the Chronicle discloses. In recent years about $7 billion in taxes were credited to the trust fund annually based on wage items placed in the suspense file, according to Social Security Administration.
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This represented about 1.3 percent of total payroll taxes credited to the fund. The S&P analysts believe that the vast majority of wages in the suspense file "are attributable to undocumented workers who will never claim their benefits." Stephen Goss, the Social Security Administration's chief actuary, told The New York Times that an estimated three-quarters of illegal aliens pay Social Security taxes and that without these payments, the system's long-term funding gap over 75 years would be 10 percent worse. The S&P analysis also found that the cost of providing education, health care and public safety to illegal immigrants is borne mainly by state and local governments in a handful of border states. "Although these states get the sales taxes and economic growth that immigrants provide, the Chronicle notes, "they miss out on a big benefit that flows to the federal government in the way of payroll taxes.
Editor's note:
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