Source

Here is an example of why hiring illegal aliens is not economically productive for the State of California...

Karl Note: An "Illegal Alien" is defined in legal terms as:

• illegal immigrant noun. an alien (non-citizen) who has entered the United States without government permission or stayed beyond the termination date of a visa (source)
• Illegal immigration refers to immigration across national borders in a way that violates the immigration laws of the destination country. Illegal immigrants are also known as illegal aliens to differentiate them from legal immigrants. In politics, the term may imply a larger set of social issues and time constraints with disputed consequences in areas such as economy, social welfare, education, health care, slavery, prostitution, legal protections, voting rights, public services, and human rights. Conversely, Illegal emigration refers to unlawfully leaving a country. Wikipidia Source

• ILLEGAL ALIEN:  An "illegal alien" is a foreigner who (1) does not owe allegiance to our country; and (2) who has violated our laws and customs in establishing residence in our country.  He or she is therefore a criminal under applicable U.S. laws.

            The term "illegal alien" is used by U.S. citizens who believe that non-citizens entering our country must comply with our immigration laws. 

            The term "illegal alien" is predicated upon U.S. immigration law which requires foreigners entering the U.S. to comply with our country's rules and laws regarding entry into, and residence within, our country.

  UNDOCUMENTED IMMIGRANT:  The term "undocumented immigrant" is an oxymoron (the parts conflict). An immigrant is synonymous with "permanent legal resident." The old term for the document authorizing a permanent legal resident is "green card." The term "undocumented" is derived from the accurate term "undocumented aliens" who are often called "border crossers." Proper terms are "illegal alien" or "undocumented alien" but not "undocumented immigrant." Although not commonly used, the term "documented alien" accurately refers to foreign nationals who have an unexpired non-immigrant visa such as H-1B.

            Most U.S. citizens do not use the term "undocumented immigrant" and prefer, instead, the more descriptive and accurate term "illegal alien".

            The term "undocumented immigrant" is used by those who believe in "open borders", i.e., non-regulation of foreigners entering into and assuming residence in the U.S., including even those foreigners who owe allegiance to a foreign government and/or who may intend harm to the U.S.(source)

  
  

You have 2 families..."Joe Legal" and "Jose Illegal". Both families have 2 parents, 2 children and live in California.

Showing latest available data.

Rank	States	Amount
# 1	California:	2,209,000
# 2	Texas:	1,041,000
# 3	New York:	489,000
# 4	Illinois:	432,000
# 5	Florida:	337,000
# 6	Arizona:	283,000
# 7	Georgia:	228,000

California Separate Source

Illegal Immigrants in California

According to U.S. Citizenship & Immigration Services (CIS), an estimated 2,209,000 illegal immigrants resided in California in 2000, up from 1,476,000 in 1990. This number represented about 32 percent of the entire estimated illegal immigrant population in the United States (then estimated to be about seven million).

CIS estimated that about 6.5 percent of California's population in 2000 were illegal immigrants, with a majority being from Mexico. Across the entire United States, an estimated 4.8 million illegal immigrants were from Mexico, up from two million in 1990.(source)

New report on California's illegal immigrants finds population of young families
Sacramento Bee ^ | 4/15/9 | Susan Ferriss

Posted on Wednesday, April 15, 2009 8:01:23 AM by SmithL

A major new report profiling America's illegal immigrants estimates that 10 percent of California's work force is undocumented, while close to 14 percent of the state's schoolchildren have at least one parent in the country illegally.

This group of California K-12 kids is divided: Roughly two-thirds are U.S. citizens by birth and one-third are themselves illegal immigrants, according to the report issued Tuesday by the Pew Hispanic Center in Washington, D.C.

The report marks the first time Pew – a leading nonpartisan research center – has attempted to use census survey data to quantify this young population. Schools in California and many other states do not make official counts of these children or parents.

The estimates about children are part of the Pew report's broader portrait of where illegal immigrants live and work nationwide, their earnings and origins.

"What is striking about this population is it is a population made up of young families," said Jeffrey Passel, Pew senior demographer and the report's co-author.

The study found that 47 percent of U.S. households with an undocumented adult consist of couples with children. That rate is far higher than the 21 percent for native citizen households or the 35 percent for legal immigrants.

High levels of employment among men – 94 percent – is another marked characteristic among the undocumented, Passel said.

Illegal immigrants were about 4 percent of the U.S. population in 2008 but 5.4 percent of the U.S. work force, according to the study.

Two-thirds work in jobs on the lower-wage rungs of the services, construction, production and repair industries. Only 31 percent of U.S.-born workers fill these same jobs, the report found.

The study found that of all the offspring of these undocumented workers, about 73 percent are U.S. citizens by birth. (source)

 

By Stephen Dinan | Sunday, March 1, 2009

The federal government last week said that after years of increases, the illegal-immigrant population in the U.S. dropped for the first time, between 2007 and 2008 - about the time that both a recession and tougher immigration enforcement began.

In a report, the Department of Homeland Security's Office of Immigration Statistics said the illegal-immigrant population in January 2008 was 11.6 million - or 200,000 smaller than a year earlier

. . .

According to the DHS's report, Mexicans continue to make up an ever-increasing share of the illegal-immigrant population, with 74 percent of all illegal immigrants who took up residence between 2000 and 2008 coming from Mexico.

And California continues to be the most popular place to settle, with 2.9 million illegal immigrants living there in 2008. Still, the rate of increase has slowed for California, but has picked up dramatically in other states. Georgia, for example, saw its illegal-immigrant population balloon from 220,000 in 2000 to 460,000 in 2008, figures showed. (source)

California's Illegal-Immigrant Deficit   [Heather Mac Donald]

Discussing California’s budget crisis following voter rejection of a slew of new tax and bond initiatives, the Los Angeles Times reports: “Worst-case scenarios also call for the release from state prisons of up to 19,000 illegal immigrants, who would face deportation.” (Those 19,000 are 10% of the state’s prison population, costing $970 million a year.) Assuming that the illegal-immigrant prisoners actually do get deported, can’t see what’s worst-case about that. 

In February, LA Times columnist George Skelton put a conservative estimate on the cost of California’s illegal population at well over $5 billion a year. That’s almost a quarter of the state’s $21.3 billion deficit. Might there be some connection between California’s budget woes and the costs of its illegal-immigrant population? Obviously, California has been living way beyond its means across the board, especially by caving in to fantastic government union pension demands, but the education, health-care, and criminal-justice costs of illegal immigrants and their progeny is no help in staunching the red ink, either. (source)

By William M. Welch, USA TODAY

LOS ANGELES — Tens of thousands of jobs created by the economic stimulus law could end up filled by illegal immigrants, particularly in big states such as California where undocumented workers are heavily represented in construction, experts on both sides of the issue say.

Studies by two conservative think tanks estimate immigrants in the United States illegally could take 300,000 construction jobs, or 15% of the 2 million jobs that new taxpayer-financed projects are predicted to create. (source)

What is the population of california in 2009?

The population of California in 2008 was 36,756,666

California in 2009 is 35,893,799 (source)

Karl Calculation: Illegal Aliens are about 10% of the California population in 2009.

"Joe Legal" works in construction, has a Social Security Number, and makes $25.00 per hour with payroll taxes deducted....

"Jose Illegal" also works in construction, has "NO" Social Security Number, and gets paid $15.00 cash "under the table".

Unreported employment, often referred to colloquially as working under the table, is the performance of employment that is not reported as required by law to the appropriate local, state or provincial, or national government agency. This is often done by the employer or employee in order to dodge one or more laws in one of these jurisdictions. Workers and employers who engage in this practice generally make and receive payments in cash, and often, the employer does not check the employee's background or credentials as is sometimes required by law or otherwise expected by the industry's client base, such as a license or certification. While the hiring of the employee may or may not be legal in itself, this is often done when the employer or employee is intentionally failing to obey one or more laws.(Wikipedia Source)

The [California] tax gap's biggest contributor - underreported income

FTB's audit program has its eye on underreporting, as the largest segment of the tax gap. Underreporting includes unreported cash transactions, and several other types of transactions that business owners may not think of as income.

If asked what should be included in business income, most people would list cash, checks, or credit card payments that are received for goods sold, or services provided. While that answer would be correct, it would be incomplete. It overlooks other forms of income that are received in connection with business operations (except those specifically excluded by law). (Source)

In 2006, ESA's Wage and Hour Division's (WHD) Los Angeles District Office began a concentrated effort to increase compliance in the local car wash industry — a low wage industry that displayed all the characteristics of an underground economy. Workers were paid in cash, some "under the table." WHD embarked on an aggressive strategy employing enforcement techniques and compliance assistance initiatives to promote industry-wide compliance with the minimum wage and overtime provisions of the Fair Labor Standards Act. By 2008, WHD was working with the Western Car Wash Association (WCWA) to expand its outreach to employers. The agency gave compliance presentations to hundreds of car wash operators throughout the Western and Southwestern regions of California. The WCWA, in turn, added a link to the agency's Web site to help its members access compliance information. WHD's enforcement investigations yielded hundreds of thousands of dollars in back wages for low-wage workers. For example, a Northridge car wash was ordered to pay $160,000 in back wages to 84 workers and a Santa Monica car wash paid $100,000 in back wages to 55 employees following an investigation. (source)

Joe Legal...$25.00 per hour x 40 hours $1000.00 per week, $52,000 per year.
Now take 30% away for state and federal tax Joe Legal now has $31,231.00

California
Sales Taxes
State Sales Tax: 8.25% (food and prescription drugs exempt.  Tax varies according to locality.  Can be as high as 10.25%)
State Sales Tax increases as of July 1, 2009, to 9.75% compared to 8.25.% standard before

The official state sales tax for the city in which Karl loren lives:is 9.75%, for Santa Clarita, CA, Los Angeles County. It is as high as 10.25% in some cities.

Gasoline Tax: * 48.7 cents/gallon
Diesel Fuel Tax: * 52.0 cents/gallon
Cigarette Tax: 37 cents/pack of 20 plus an additional surcharge of 50 cents per pack, bringing the total to 87 cents.

Personal Income Taxes
Tax Rate Range:  Low - 1.0%; High - 10.3%
Income Brackets: ** Lowest - $7,168; Highest - $1,000,000
Number of Brackets:  6
Tax Credits:  Single - $99; Married - $198; Dependents - $309; 65 years of age or older - $99
Standard Deduction:  Single - $3,692; Married filing jointly - $7,384
Medical/Dental Deduction: Same as Federal taxes
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security and Railroad Retirement benefits are exempt.  There is a 2.5% tax on early distributions and qualified pensions.  All private, local, state and federal pensions are fully taxed.
Retired Military Pay: Follows federal tax rules.
Military Disability Retired Pay: Retirees who entered the military before Sept. 24, 1975, and members receiving disability retirements based on combat injuries or who could receive disability payments from the VA are covered by laws giving disability broad exemption from federal income tax. Most military retired pay based on service-related disabilities also is free from federal income tax, but there is no guarantee of total protection.
VA Disability Dependency and Indemnity Compensation: VA benefits are not taxable because they generally are for disabilities and are not subject to federal or state taxes.
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Property Taxes
Property is assessed at 100% of full cash value.  The maximum amount of tax on real estate is limited to 1% of the full cash value.  After taxes have been paid, homeowners 62 and older who earn $35,051 or less may file a claim for assistance on 96 percent of property taxes, up to $34,000 of the assessed value of their homes.  Call 800-852-5711 or visit for details.  Homestead exemptions are handled at the county level.  Under the homestead program, the first $7,000 of the full value of a homeowner's dwelling is exempt. The state has a property tax postponement program that allows eligible homeowners (seniors, blind and disabled residents) to postpone payments of property taxes on their principal place of residence.  Interest is charged on the postponed taxes.  For more information, click here or call 800-952-5661.

Inheritance and Estate Taxes
There is no inheritance tax.  However, there is a limited California estate tax related to federal estate tax collection.

For further information, visit the California Franchise Tax Board or the California State Board of Equalization.
* Does not include 1 cent local option.
** For joint returns, the taxes are twice the tax imposed on half the income.(source)

Federal Income Tax, family of four, gross income of $52,000:

The 15% rate on adjusted gross income is a reasonable rate for purposes of estimated tax; that would be about $7,800.

The 10% State sales tax plus the 15% Federal Income tax, plus Social Security and Medicare (7.65%), unemployment Insurance (9%, but paid by employer if the worker is legal) and others is easily more than the 30% used in this example. The full rate of 40% is most likely most accurate.

The example of Joe Legal, of 40% of his $52,000 for all Federal and State taxes is reasonable, or $20,769 taxes, leaving him $31,231, calculated this way, compared to the $31,231 above.

Jose Illegal...$15.00 per hour x 40 hours $600.00 per week, $31,200.00 per year.
Jose Illegal pays no taxes... Jose Illegal now has $31,200.00.

At this point Joe Legal is just $31.00 ahead of Jose Illegal in take home pay.

The employer of Jose Illegal saves not only the $10 per hour hourly difference but his matching social security, worker's comp, unemployment and other taxes for Joe Legal, leaving him FAR better off as to his cost of construction compared with employing Joe Legal.

Joe Legal pays Medical and Dental Insurance with limited coverage $1000.00 per month, or $12,000.00 per year
Joe Legal now has $19,231.00

Jose Illegal has full Medical and Dental coverage through the state and local clinics at a cost of $0.00 per year
Jose Illegal still has $31,200.00

Joe Legal makes too much money so he is not eligible for Food Stamps or welfare,
Joe Legal pays for food, $1,000.00 per month or $12,000.00 per year.
Joe Legal now has $ 7,231.00

Jose Illegal has no documented income and is eligible for Food Stamps and Welfare
Jose Illegal still has $31,200.00

Joe Legal pays rent of $1,000.00 per month, 12,000.00 per year
Joe Legal is now in the hole, minus (-) $4,769.00

Jose Illegal receives a $500 per month Federal rent subsidy
Jose Illegal pays rent $500.00 per month, $6,000.00 per year
Jose Illegal still has $25,200.00

Joe Legal now works overtime on Saturdays or gets a part time job after work.
Jose Illegal has nights and weekends off to enjoy with his family.

Joe Legal's and Jose Illegal's children both attend the same school.
Joe Legal pays for his children's lunches while Jose Illegal's children get a government sponsored lunch.

Jose Illegal's children have an after school ESL program.
Joe Legal's children go home.

Joe Legal and Jose Illegal both enjoy the same Police and Fire Services, but Joe paid for them and Jose did not pay.

______________________________________

 

California Collapsing

Karl Note: I consider the many newsletters and articles by Martin D. Weiss and his staff as far better than the usual material in the Wall Street Journal, and far better than any other financial newsletter being published. He errs, however, in not being either willing to publish or able to see that this financial crisis was deliberately created for the purpose of taking the economy of the United States DOWN and removing the US Dollar as the global currency. The details of this are in my book (free download) and in my newsletters.

This deliberately created crisis has achieved its goals already. It is TOO LATE to stop the "fewer than a dozen men" who have planned and brought about this financial mess and loss of the freedoms already experienced and to be experienced in the US.

Despite the lack of full insight into the CAUSES of this mess, Dr. Weiss has a very firm grasp on the facts of the EFFECTS which very few others can see -- the coming dark times. THIS article about California's demise puts the terrible truth out there for us all to take heed.

by Martin D. Weiss, Ph.D.   06-22-09

Source

Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times.

It’s not.

California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.

California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India.

And it’s collapsing.

Major California counties are ground zero in the continuing mortgage meltdown:

Los Angeles County with 5.32 percent of mortgages 90 days past due … Monterrey County, 8.02 percent … Imperial, 8.13 … San Bernadino, 8.66 … Madeira, 9.21 … San Joaquin, 9.53 … Riverside, 10.2 … Merced, 10.57 … and more!

California’s inventory of foreclosed homes is skyrocketing. Home prices are plunging. And the impact of surging unemployment is just beginning to show up in the data …

Worst Unemployment in 64 Years

The state’s unemployment rate has surged to 11.5 percent, the worst since World War II.

Last month, California lost 68,900 jobs. And since July 2007, it has lost 859,000 jobs, including 739,500 just in the past 12 months.

Even if the economy recovers, an unlikely scenario in my view, economists agree that California will continue to be slammed by layoffs, at least through the end of this year and probably well into 2010.

And even assuming a national recovery, UCLA’s Anderson Forecast projects an average unemployment rate of 12.1 percent from this fall through next spring.

What about without a national recovery? California’s jobless could go beyond 15 percent.

Worse, if you include part-time workers seeking full-time work plus workers who have given up looking entirely, it could reach 25 percent, exceeding the worst national unemployment levels of the Great Depression.

“Our wallet is empty.
Our bank is closed. And
our credit is dried up.”

These are not the words of a Dr. Doom in New York or a forlorn banker in Georgia. They represent the confession of Governor Arnold Schwarzenegger before a rare joint session of the California legislature … and with no exaggeration!

The state faces a stunning $24.3 billion budget deficit, even assuming no significant deterioration in the economy from this point onward. And the state has lost virtually all hope of President Obama declaring, “California is too big to fail.”

California State Treasurer Bill Lockyer tried to make that argument to Washington, and did so with great vigor. But he was rejected. After the long line-up of failed companies with hat in hand in recent months — on the steps of Congress or the White House lawn — some folks in government finally appear to have learned how to just say “no.”

“You’re on your own,” is the message from the president to the governor. “Beyond your share of the stimulus package, that’s it! No more!”

Result: The inevitability of massive state cutbacks, including large numbers of state jobs getting axed — all while the California jobless rate is already 11.5 percent.

How many state jobs are in jeopardy? Right now, Schwarzenegger is proposing laying off 5,000 state employees, as well as slashing education and social welfare programs. But the Anderson Forecast projects that Schwarzenegger’s budget cuts will eventually result in 64,000 job cuts from state government plus countless private-sector and local government jobs.

Massive Downgrades Coming

California’s credit rating is already the lowest among all U.S. states.

But with Moody’s, S&P, and Fitch still greatly influenced by massive conflicts of interest, it’s not nearly low enough.

And sure enough, on Friday, Moody’s tacitly admitted as much, announcing that it may have to cut California’s rating by several notches in one fell swoop!

Standard & Poor’s put California on watch for a possible downgrade a few days earlier. Fitch did the same May 29.

The big problem: Once downgraded, California’s rating is likely to fall below the minimal level legally required for most money market funds, forcing these funds to dump California paper posthaste.

Moody’s wrote:

“If the Legislature does not take action quickly, the state’s cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July. … Lack of action could result in a multi-notch downgrade.”

But lack of action is precisely what Sacramento is now becoming most famous for. In fact, in their latest scuffle, Democrats proposed a budget that would raise $2 billion from cigarette taxes and oil companies. But the governor promptly vetoed the plan. So now Sacramento is in a new, escalating battle over the deficit just weeks before the state is expected to run out of cash to meet payroll and other bills.

State officials continue to insist that a state default is unthinkable … much like GM executives said their bankruptcy could never happen.

In my view, there is a very HIGH probability that California will default.

It’s obvious its debt merits a junk bond rating from every Wall Street rating agency.

And it’s equally obvious that the ratings agencies are artificially inflating the rating, stalling downgrades, and grossly understating the risk to investors.

My recommendations:

1. If you wait for Moody’s or S&P to act, it could be too late. Even if you can’t get what you might consider a good price, sell all California paper now!

2. Seriously consider dumping all tax-exempt bonds. I know the income is better than equivalent Treasuries. But if California defaults, it could set off a chain reaction of bond price plunges and defaults throughout the municipal bond market.

3. Don’t underestimate the impact California’s depression is having — and will continue to have — on the rest of the U.S. economy. At $1.8 trillion, the state’s GDP is so large, any further deterioration could wipe out every so-called “green shoot” in the national economy seen to date.

4. Stay safe, with a big portion of your nest egg in cash, tucked away in short-term Treasury bills … and with a very modest portion in gold, as an insurance policy against a dollar decline.

Good luck and God bless!

Martin

---

About Money and Markets

For more information and archived issues, visit http://www.moneyandmarkets.com

Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson and Bryan Rich. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amber Dakar, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.

Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

From time to time, Money and Markets may have information from select third-party advertisers known as “external sponsorships.” We cannot guarantee the accuracy of these ads. In addition, these ads do not necessarily express the viewpoints of Money and Markets or its editors. For more information, see our terms and conditions.

© 2009 by Weiss Research, Inc. All rights reserved.

15430 Endeavour Drive, Jupiter, FL 33478