Thread: Illegal Deduction Elimination Act (Iowa Rep. Bill)

http://www.thehawkeye.com/daily/stories/ln12_0326.html

Federal bill targets immigration woes
Congressman's effort targets employers of undocumented workers. By AIMEE TABOR
atabor@thehawkeye.com

Companies hiring illegal immigrants no longer will be able to deduct their wages and will have to pay more to the federal government if a proposal by an Iowa congressman becomes law.

U.S. Rep. Steve King, R–Iowa, is working on a bill that would address companies who hire illegal immigrants.

The bill, which hasn't been submitted yet, is nearly complete and King is getting co–signatures for it. He said the bill likely will be introduced within the next two or three weeks.

"I have one bill that's almost drafted now that has components in it that will help solve the immigration problem," King said. "The centerpiece of it is something that's captured the imagination of some people in Congress now and I think it will get the attention of the country."

That centerpiece is called the Illegal Deduction Elimination Act, which removes the ability of an employer to deduct wages and benefits paid to illegal immigrants who work for their companies. King gave an example of how his bill would work if approved.

"Say $10 million in wages was paid over the course of five years," King said. "That would generate about 35 percent in taxes so that would be $3.5 million that one would have paid in taxes out of the $10 million that was deducted. The IRS will take that number and they'll add interest and penalty to that and that $10 million worth of formally deductible wages becomes a $5 to $6 million liability."

King developed the proposal based on an employer's current ability to check a worker's eligibility. An instant check program that's been available since 1996 can determine if an employee is eligible to work in the U.S.

King's proposal would give the IRS the ability to check the history of a company and who it hires.

"The IRS can come in up to six years later and do an audit of the companies," King said. "If the companies can't verify that their employees were legal and if the IRS can verify that they were illegal, then the wages that were paid that were a tax deductible item on a business expense would no longer be a business expense and would become taxable."

If approved, the proposal would mean companies would be paying more in the long run if they hire illegal immigrants.

"This would put the equation back in line," King said. "If you can pay an illegal $10 an hour to work for you and it takes $16 an hour to hire people qualified that are legal this makes the equation work again."

King decided to draft a bill after seeing lax immigration laws the Bush administration has embraced.

"The administration lacks the will to enforce immigrant laws," King said. "They've sent a very clear message they're not inclined to enforce. That means not a single company in the United States last year paid any sanctions for hiring illegals."

In previous years anywhere from 500 to 1,000 companies have had to pay sanctions, King said. Besides workers, illegal immigrants may be dabbling in illegal activity when crossing the border into the U.S., King said.

He cited the U.S. Department of Justice's figure that says Iowa gets about 85 percent of its methamphetamine drugs from Mexico. Although the state already passed a tough meth bill and the federal government is considering a similar, slightly weaker measure, King said the bills will target the meth labs in the U.S. and not the problem with it being smuggled into the country.

Several million illegal immigrants enter the country each year, of whom only a small fraction are deported, King said. That means out of those who stay illegally, the majority may be doing legal activities but there are some that are engaging in illegal activities.

Out of all the illegal immigrants who enter the country, King said it becomes harder and harder for U.S. law enforcement officials to find those who are engaging in illegal activity. He compared the situation to a mounting haystack and the illegal activity being a few needles in the haystack.

"We've got a system that says we'll just keep pitching hay on top of this, and we'll try to sort the needles out of it," King said.

I have a better idea.
Why don't you PROSECUTE those whoe hire illegals.
We already have those laws on the books.