Clearly I'm not doing a good job of explaining, my limitation sorry. The fact remains that a substantial extra amount of SS taxes are collected each year that aren't matched to a tax return. Regardless of how this happens, it happens and it's not due to typos. In the grand scheme I guess it doesn't really matter how you believe or don't believe it happens, right?
Actually, if I was going to be in the U.S. without a work permit I would opt to start a business over trying to get a job, it's far safer. As an employer, I use the USCIS e-verify system for everyone I hire as most employers do, and it's pretty tough to trick that. I'm also required to collect a panoply of documents for every hire and keep them on record, as is every employer in the U.S. As a potential undocumented worker, I'd have to find an employer who was OK with knowingly hiring undocumented workers since otherwise my chance of being caught is high, which would be scary for me. On the other hand, if I start a business I'm in charge of doing the verifying so I don't have to worry about that. Customers don't care and have no responsibility to check work permit status, whereas an employer does. As long as I pay my withholdings and file a tax return every year the IRS isn't going to bother me and there's no avenue short of Arizona style stopping brown skinned people to check for papers that is going to expose me as long as I follow the law everywhere else. The entire logic (which admittedly is debatable) behind the firewall between IRS and DHS is that a ton of money comes into Treasury from undocumented workers and Treasury doesn't want to make their job harder by making people afraid to pay taxes and do withholdings.
Sorry, but my intent of posting was not about immigration, legal or illegal, but wanted to stimulate discussions on who, why and what regarding new/small business formation. They are the engine, driving force of our economy and job creation. Best to all.
%% This is not a prediction; but reading a rather interesting large book on IRS, by a old tax lawyer.I dont see why the IRS would turn any money away,or SS tax money away.It's also like a banker would prefer to make a mortgage on a $500k home rather a 100k home if he has a choice + the IRS has a choice. As far as immigrants; sure they do start plenty of businesses. Plenty of undocumented have patterns also, IRS can be good @ patterns.Some US gov officials caught a worker @ TX -Mex border ; they simply took all his cash[over $10,000] i think.
These are legal immigrants that followed the rule of law. They did everything by the book and now they're getting ahead. No surprises.
I am quite sure native born Americans are as innovative, if not more so, and hard working as immigrants giving the right circumstances. However, native born Americans probably don't have "their back to the wall" and therefore are not as motivated to take risks starting their own business. Then why the large # for immigrants? There is another factor: selection bias. Those that are willing to face the uncertainty in an alien land are already preselected to take risk. That is probably why after they arrive they are not afraid to start out on their own. Peace.
That's why driver's licenses need to be out of reach for illegals along with business licenses which one needs to procure insurance and on and on.