In order to work legally in the United States, you need to pay federal taxes. So, in order for Judy Olsen's suggestion to work, we would need to make some kind of agreement with the federal government.
I blogged yesterday on Olsen's letter to the Deseret News, noting she suggested Utah offer I.D. cards to undocumented residents, allowing them to pay state taxes and work. I liked her idea, noting that getting them to work legally and pay taxes would be a good thing.
But, I failed to recognize that they wouldn't be working legally unless they were paying federal taxes. Employers are required to hook them up to the federal taxes.
So, if we want the program to work, how do we do it? Could we make an arrangement with the federal government to tax the immigrants, without having their names released to Immigration and Customs Enforcement agents?
Or, could we deduct the tax and pass it onto the federal government without releasing their names to the federal government? The employer is then deducting the tax as required by law. And, the immigrant is then paying the tax as required by law. And, he is not required to file income taxes as long as he has not underpaid on the taxes.
The better way of the two suggestions is to get the federal government to sign of on the program, but I have doubts as to whether we could get that approval.
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