
Mona Fritsche
37.3K posts






Grok: Employer tax advantages (and related wage-arbitrage incentives) are real, documented loopholes that Cato's static fiscal model does not adjust for—meaning their "$14.5T surplus" (1994–2023) attributes lower actual tax remittances to immigrants than a native-worker counterfactual would generate. Cato reports observed taxes paid/benefits received from CPS/IRS data, but it does not model the missing revenue from (1) FICA exemptions that subsidize foreign hires, (2) prevailing-wage floors that enable underpayment, or (3) the displacement of higher-earning U.S. workers. This creates an upward bias in their "immigrants pay more" narrative. Below is a comprehensive list of counterpoints directly addressing Cato's misrepresentation. It draws from IRS/DOL data, NBER, CIS, Manhattan Institute, EPI, and 2025–2026 analyses. I separate economic/tax distortions from non-economic drags on society/systems. These show Cato's aggregate "surplus" exaggerates benefits—especially for low-skilled/guest-worker cohorts—by ignoring how policy tilts the playing field toward cheaper foreign labor. ### 1. Specific Employer Tax Advantages That Reduce Revenue Attributed to Immigrants These are direct subsidies (not captured in Cato's "taxes paid" tallies) that make foreign hires artificially cheaper. - H-2A Agricultural Guest Worker Program (Seasonal Farm Labor): H-2A workers are fully exempt from FICA (Social Security + Medicare taxes, 15.3% split). Employers pay zero employer share (7.65%); workers pay none. IRS explicitly confirms: no withholding, no self-employment tax on H-2A compensation.This saves employers ~$1,200–$2,000+ per worker annually (at typical $15–20/hr wages). No FUTA in many cases. 2025–2026 H-2A reforms (Trump DOL IFR) further cut wages (AEWR tiers down to $8–17/hr), amplifying the arbitrage. Program exploded to ~400K–500K+ visas; Cato treats the (lower) taxes actually remitted as a "contribution" without noting the forgone revenue vs. domestic hires. - OPT/STEM OPT Pipeline (F-1 Student Work Authorization): F-1 students on OPT (up to 3 years standard + 2-year STEM extension) are exempt from FICA for their first 5 calendar years in the U.S. Employers pay zero 7.65% share—saving $3,800–$7,650/year per $50K worker. This is a payroll-tax holiday explicitly designed for foreign grads; U.S. grads lose it immediately upon full-time hire. Estimates: $27–$36B in lost federal revenue over 10 years if closed (OPT Fair Tax Act, 2026). Many OPT workers transition to H-1B; employers use it as a low-cost "try before buy" feeder. Cato counts the resulting (lower) taxes as immigrant "surplus" without crediting the exemption subsidy. - Broader Visa Loopholes: H-1B "prevailing wage" floors (pre-2026 reforms) were set too low (17th–34th percentile), enabling 10–16% wage discounts vs. natives (NBER/Borjas 2026). DOL's March 2026 NPRM admits this and proposes hikes ($14K/year average boost) to curb abuse. No general WOTC credit, but the wage + OPT/FICA tilt creates effective tax/ labor-cost discounts. Net effect on Cato: Their model understates the revenue gap. If these jobs went to natives at full market wages + full FICA, taxes would be higher. Restrictionist models (Manhattan Inst. 2025) show low-skilled cohorts already net negative; these loopholes widen it. ### 2. Wage Suppression & Displacement: Lower Taxes + Native Unemployment Cato's "higher collective work hours" claim ignores that immigrants often displace or suppress wages for U.S. workers in the same roles. - High-Skilled (H-1B): 53%+ of H-1B offers below median U.S. wages for comparables; outsourcing firms show $9.7K gaps. Borjas (NBER 2026): ~16% discount after matching. DOL: H-1B wages averaged $10K–$11K below OEWS. This means lower payroll/income taxes than native hires would generate. Cont. @SpeakerJohnson @LeaderJohnThune @IngrahamAngle @JDVance @StephenM





@slmimorgan @masstroller789 @M9USA_ @insidehighered Not happening future minority 😂














@culone81 @Gianl1974 Defending this bullshit must be so tiresome, jay. His only reason would be to install “science” people who don’t actually know science.



























