The new Senate GOP tax plan would strip illegal aliens of the ability to claim several major tax credits, which, until now, the IRS has allowed them to do. This could saving the government around $23.1 billion over the next decade.
Republicans have long complained that, despite a general ban on taxpayer benefits flowing to people in the country illegally, the IRS has nevertheless allowed them to collect things like the child tax credit, the American Opportunity Tax Credit and the Earned Income Tax Credit.
The Senate bill calls for taxpayers to have to submit work-eligible Social Security numbers in order to claim the credits, which would have to still be voted on by the House in their final version, something that will not likely be hard to get done.
The IRS pays out billions of dollars a year in tax credits to people filing using Individual Taxpayer Identification Numbers (ITINs) each year, according to the agency’s inspector general.The inspector general has repeatedly urged the IRS to stop making the payments, but the agency has refused, saying it interprets the law related to those tax credits to cover illegal immigrants as well as other taxpayers. This is because children of illegal aliens are often U.S. citizens who qualify for the credit, since they were born here.
Also, a lot of illegal immigrants pay taxes using ITINs, which the IRS issues to those who aren’t authorized to work in the U.S., but whom the government still wants to pay taxes.
Along with striking accessibility of these tax credits from illegal aliens, the bill also strikes down the Obamacare individual mandate, a major step toward ending an unpopular part of the health-care law.The mandate’s repeal was not part of the original measure released by the Senate Finance Committee, and Chairman Orrin Hatch (R-Utah) previously said he wanted to keep the divisive health-care issue separate from taxes.
President Trump was one of the major public advocates for its inclusion. At the end of the day, the money saved by the repeal—estimated to be $300 billion over ten years—was to good of an opportunity for most GOP Senators to pass up, and it also allowed them to get some sort of a win on the healthcare front, after the debacle that was their Obamacare repeal efforts.
These two issues represent major wins in this bill.