Online Appendix: News articles, ads, and voter guide for the survey presented in
Primo, David M. 2013. "Information at the Margin: Campaign Finance Disclosure Laws, Ballot
Issues, and Voter Knowledge." Election Law Journal 12(2):114-129.
South Florida Sun Sentinel (Ft. Lauderdale, FL)
October 17, 2010
Final Edition
Amd 32 may sound good, but it's full of loopholes
BYLINE: Carl Reuteman
SECTION: BUSINESS; Pg. 2C
I've been boning up on all the ballot initiatives we'll be voting on next month, and I can't help but conclude that Amendment 32
is an insult to the electoral intelligence.
Amendment 32 is a spurious initiative designed to give the impression that Florida is trying to do something about illegal immigration. Once I explain it to you, I think you'll agree it will do
nothing whatsoever.
Oh, it sounds good, let's give it that much. According to the
wording you'll see on your ballot, it purports to eliminate state
income tax benefits for businesses that deduct wages paid to "unauthorized alien" employees. But it's based on a ludicrous honor system with enough loopholes to drive a truck through.
Let me break it down by paraphrasing parts of the state's official voting guide: Current law allows businesses to deduct wages as
a business expense. If Amendment 32 passed, a business would be required to disclose the amount of wages paid to unauthorized aliens
that it deducted as an expense on its federal tax return. Amendment
32 would increase the business's taxable state income by "an amount
equal to the prohibited deduction," thus resulting in higher state
tax revenue.
But wait a minute. Suppose I'm an employer who decides to hire
unauthorized alien workers. There are many who do this for a variety of reasons, all already illegal.
So I'm already breaking the law. Amendment 32 expects me then to
turn around and admit as much to the state when I file my tax return. No one - but no one - is going to do this. If I decide to
break the law by hiring illegal workers, I'm not going to turn
around and voluntarily be honest about it.
Now the loopholes. Amendment 32 doesn't apply to businesses that
pay unauthorized aliens in cash, which many do. It doesn't apply to
any payment under $600. And it doesn't apply if the unauthorized
alien was hired using fraudulent documentation.
In the voter guide, the arguments for Amendment 32 include the
notion that it is "part of a broad strategy for addressing the illegal immigration problem at the state level. It targets the employment of unauthorized aliens, which is the root cause of illegal
immigration." Poppycock. It creates an illusion of addressing the
problem and does nothing concrete. It puts the onus of immigration
enforcement on employers. In effect, it asks employers to do what
law enforcement agencies have been largely unable to do effectively
for decades. And I can't imagine it will work.
The voter guide goes on to say, in the section called "arguments
against" Amendment 32, "there is little incentive to stop hiring
unauthorized aliens because a business can still get a federal tax
break worth at least five times as much as the additional taxes
owed to Florida under this proposal." And the capper is this: "Hiring unauthorized aliens is already against the law, which means
that the issue Amendment 32 tries to address would not exist if
current laws were enforced."
The Florida Legislative Council, in its assessment of the ballot
measure, also points out the absurdity in its premise: "In order
for the state to see an increase in income tax collections, a company that is violating federal law by hiring illegal aliens would
have to admit to such a violation on their state income tax return.
Effectively, a company that is already violating federal law would
have no incentive to proclaim their guilt on their state income
taxes. Therefore, staff believes that it is unlikely the state will
receive any additional revenue, except in cases where a company is
audited and found guilty."
However, this scenario is also fairly unlikely since the company
would have to be found to have knowingly employed "unauthorized
aliens" and then be found to owe taxes as a result. In addition, if
the alien showed the employer a valid identification card or license, even if the card was obtained illegally, "the employer would
have no liability."
Who favors this turkey? Republican State Rep. Ted Berens, "It's
part of a large strategy to reduce illegal immigration in Florida."
On message, Republican state Sen. Rob Teck "defended the measure
as part of a broad strategy to crack down on illegal immigration,"
one of our reporters wrote last month. Personally, I don't see
where it will do a goshdarn thing. It's a waste of everyone's time,
and I'll surely vote against it.
Copyright 2010 South Florida Sun Sentinel
Page 1
Tallahassee Democrat
October 26, 2010
Final Edition
Amendment 32 called gesture
BYLINE: Carmen Gutierrez
SECTION: NEWS; Pg. 24A
Proponents of an amendment that would eliminate a state income
tax benefit for businesses that knowingly hire undocumented workers
admit that it is a symbolic gesture.
It's one way for Florida voters to let federal lawmakers know
about "the illegal alien crisis," said Fred Ebel, co-chair of Defend Florida Now, during an hourlong televised debate over Amendment 32.
"We need this measure in Florida to tell the feds to do their
job," Ebel said.
But it's still an amendment with no teeth and a waste of money
just to pursue a lawsuit, countered two opponents of Amendment 32
during the debate. Nadyne Benavidez, executive director of Color of
Justice, an advocacy group for immigrants, said the power to regulate immigration still lies in the halls of Congress.
"We're going to pass something that, if it passes, we know it's
not going to accomplish anything," Benavidez said.
However, Scott McGarry, acting director of Florida Alliance for
Immigration Reform, said he felt it was worth if it reduced what it
costs the state to provide services such as education and law enforcement for illegal immigrants.
Both sides did agree on one lingering problem concerning immigration enforcement, and that problem is a dearth of job site enforcement by federal authorities.
But Benavidez and attorney Martin W. Burke, media committee
chair for the American Immigration Lawyers Association, denounced
Amendment 32. It would eliminate the tax benefit for an employer
who knowingly hired an unauthorized worker.
"And that isn't going to happen to voluntarily say, 'Yes, I
hired that person,' " Benavidez said.
Burke called the amendment an "election year political gimmick"
intended to dupe voters.
Page 1
Gainesville Sun
October 30, 2010 Friday
Amendment 32 targets illegal employers
BYLINE: CHRISTINE McFee
SECTION: LOCAL; Pg. 1B
Voters on Nov. 2 will decide whether businesses that hire undocumented workers should be penalized.
Amendment 32 is a state-level crackdown on undocumented workers
waged by the Governor and anti-immigration supporters.
If Amendment 32 passes, businesses could no longer deduct expenses associated with payment of undocumented workers on their
state income-tax forms.
If businesses don't know they've hired an undocumented worker in many cases because of false documentation - they would still be
eligible to file for a state income-tax deduction.
The measure would not apply to employers who pay workers in
cash.
However, experts say that businesses knowingly in violation of
federal law would be unlikely to comply with the measure if it
passes because it would mean admitting to hiring undocumented workers, according to Josh Harding, an economist at the Florida Legislative Council.
"It is unlikely that the state will receive any additional revenue, except in cases where a company is audited and found guilty,"
Harding's report said. If approved, the measure would take effect
Jan. 1, 2011.
Those who vote "yes" on Amendment 32 are endorsing state action
on the federal issue. The intention is to limit jobs for undocumented workers.
"As long as job opportunities for unauthorized aliens exist, the
incentive to come to Florida or overstay visas will persist,"
states Amendment 32 supporters.
The Northern Florida Legislative Alliance, made up of the three
chambers of commerce and two economic development organizations in
the region, supports Amendment 32.
The measure would help curb employment of undocumented workers,
an unfair and unethical business practice, according to NFLA's
stance in this month's Gainesville Area Chamber of Commerce publication, The Chamber Compass.
Passage of Amendment 32 would send a message to Florida businesses and the Legislature that providing jobs to undocumented im-
Page 2
migrants is not acceptable, said Fred Ebel, co-chairman of Defend
Florida Now.
"This is a small but necessary step needed to confront the illegal alien crisis in the U.S. and in Florida," Ebel said.
Ebel said undocumented workers use $1 billion annually in public
resources such as education, health services, Medicaid benefits and
the criminal justice system.
Penalties for hiring undocumented workers might curb hiring
practices. Or not.
"As long as there's a demand in the job market, immigrant workers will be here," said Sylvia Distaso, a volunteer with Fuerza
Latina in Gainesville. "Immigrant issues are a scapegoat so politicians don't have to talk about the war in Iraq, the economy, health
care or education."
Those who support voting "no" on the amendment contend that violation of federal law must be taken care of at the federal level.
If current laws were enforced at the federal level, there would
not be a need for Amendment 32, opponents say. By enforcing immigration issues, Florida businesses would not be as competitive,
Distaso said.
Distaso said she sees any public money effectively spent on education, health care and other immigrant benefits as a good investment in the nation's future.
Florida industries such as construction, agriculture, hard labor
and others have relied on undocumented labor, especially from immigrants who come to the U.S. from Latin American countries.
Harding said it would cost Florida nearly $44,000 to make tax
form changes. New funding might not be required if funds can be
found in the 2010-11 budget.
Copyright 2010 Gainesville Sun
All Rights Reserved
Ballot measures
Overview of Miami Herald positions on statewide issues
October 8, 2010
Florida voters will decide on 4 statewide ballot issues in this year's general election. Here
are our recommendations:
Amendment 30 - No. This would amend the state constitution to cut property taxes for
disabled veterans. Good intentions, however, are not enough. Why not disabled
firefighters or widows of cops? And why put it in the constitution?
Amendment 31 - Yes. This amendment would delete recall election deadlines from the
constitution and let the Legislature set them. More flexibility may be needed.
Amendment 32 - Yes. This is a statutory change to eliminate tax breaks for businesses
that hire illegal immigrants. It is unfair to penalize only the immigrant.
Amendment 33 - No. This is a 65 percent solution for school funding. A bad idea.
Page 1
Naples News
October 29, 2010 Thursday
Ballot issues can mislead
SECTION: OPINION; Pg. 6A
Read your ballots carefully. Here is what we think.
Amendment 30: Homestead property tax exemption for qualifying
seniors and disabled veterans. Vote yes.
Amendment 31: Removing recall timelines from the Constitution.
Poorly constructed proposal. Vote no.
Amendment 32: Penalize companies that hire illegal immigrants by
removing state income tax benefits. More like a referendum against
illegal immigrants given that this law would be so difficult to enforce. Vote no.
Amendment 33: Public Schools Expenditure Accountability Act. Local voters should have control over how their school districts are
operated, including determining how much money goes for classroom
instruction. Vote no.
Copyright 2010 Naples News
All Rights Reserved
Page 1
The Orlando Sentinel
October 10, 2010
FINAL EDITION
EDITORIAL Approval urged on immigration issue Amendment 32 would
penalize employers who use unauthorized workers.
SECTION: Pg. B-06
Next month, Florida voters will decide on an immigration ballot
issue.
Amendment 32 would penalize employers who knowingly hire unauthorized workers.
We urge a "yes" vote.
Amendment 32 would punish employers who hire unauthorized workers by prohibiting them from deducting wages paid to illegals as a
business expense.
The measure requires a business to disclose the compensation
paid to unauthorized workers that it deducted as an expense on its
federal tax return. Amendment 32 would then increase the business'
state taxable income by that amount, pushing up the employer's
state income tax bill.
The amendment isn't a draconian measure by any means. It relies
on employers to voluntarily disclose that they hired illegal workers and it would not impact a business that pays for services in
cash.
We would have preferred a stronger bill. After all, an employer
who makes a voluntary disclosure is in essence admitting it violated federal law by knowingly hiring illegal immigrants. We wonder
who would sign up for that? But it's important that Florida send a
message to employers and to Washington that it is serious about
tackling the illegal immigration problem, and we urge voter support
of 32.
The measure would apply only to annual compensation of $600 or
more per worker and would take effect Jan. 1, 2011. It would not be
retroactive to workers hired before that time.
Copyright 2010 The Orlando Sentinel
All Rights Reserved
Elite donors fuel ballot initiatives
Sunday, October 29th 2010
By Thom Hanel | Herald Miami Bureau
The backers of ballot initiatives want votes from as many people as possible. But some of
their campaigns are paid for by a small, elite group.
Ballot initiative spending
All donations, cash and in-kind as of Oct. 27, 2010:
Pro Amendment 30 Veterans tax break: $34,075
Pro Amendment 31 recall elections: $51,673
Anti Amendment 31: $93,557
Pro Amendment 32 Immigration: $171,009
Anti Amendment 32: $102,369
Pro Amendment 33 school spending: $1.2 million
Anti Amendment 33: $2.6 million
Hard-money donations
A breakdown of the hard-money donations to state ballot campaigns as of Oct. 20:
Total donations: $4,252,683
Median donation: $50
Amount from in-state: $2,526,430
Source: Florida secretary of state; Ocala Star Banner analysis
Campaigns surrounding the 4 issues on November’s ballot have collected more than $4
million, many in large donations.
“Sad to say, it’s not completely atypical or out of line,” said Peter Sondermann, a Miami
political consultant. “Every cycle, we say, ‘This is the worst, this is the ugliest it has ever
been, this is the most expensive.’ That’s not necessarily the case.”
Looking for a few big checks
As of last weekend, 7 different groups had collected $4.2 million.
Of that, about 70 percent is in the form of documented, hard-money donations of $20 or
more. The rest comes from small donations or in-kind contributions, such as the donation
of labor, supplies or services.
The Star Banner tracked the cash donations and found that nearly 90 percent of the
money came from donations of $10,000 or more.
The numbers were current as of Oct. 27, said Denise Williams, spokeswoman for the
secretary of state.
Campaigns scramble for attention
No single campaign committee has cleared the million-dollar mark in cash donations.
Two campaigns have raised more than $500,000 – in favor and against a 65 percent
classroom spending requirement for schools.
On Amendment 32, only two committees have formed—one on either side of the issue.
Defend Florida Now, a proponent of Amendment 32, began raising money as early as
January, taking in small to modest sized donations of between $25 and $100. The
majority has been individuals, but two groups have contributed. Support Our Law
Enforcement is a Florida-based advocacy group that has donated $2,150. The other
group—Federation for American Immigration Reform—is located in Washington, DC.
They donated $40,000 to Defend Florida Now’s efforts.
The Amendment 32 opponent, Color of Justice, formed later but still managed to narrow
the fundraising gap quickly through donations from an unusual coalition of civil rights
groups, businesses, and trade associations. Some of the more prominent include
McDonalds USA, which donated $9,500 and the Florida Produce Growers Association,
which contributed $10,000.
Bringing up the rear is Veterans for Amendment 30, with $34,075. Amendment 30 would
give a property tax break to disabled veterans.
About half of the voters will vote before Nov. 2, which changes the strategy for the
initiative campaigns, Sondermann said.
“Election Day is not a one-shot deal,” he said.
During the last two weeks, campaigns will do whatever they can to keep their message at
“high volume” in news stories and advertisements, Sondermann said.
Page 1
State Income Tax Monitor
August 31, 2010
Floridians To Determine Fate Of Wage Deduction For Illegal Aliens
SECTION: Pg. 75
Immigration reform is indeed taking some interesting paths
around the country, and sometimes roping corporate tax policy into
the debate. In Florida, voters around the state in November will
decide the fate of Amendment 32. In the amendment, Floridians will
decide if the state should stop granting corporate taxpayers a deduction for wages paid to "unauthorized aliens." However, it would
have to be shown that the employer knew of the employee's immigration status at the time.
Source: State Income Tax Monitor, 08/31/2010
Copyright © 2010 by Stafford Publications, All rights reserved.
Storage, reproduction or transmission by any means is prohibited
except pursuant to a valid license agreement.
Florida Times Union (Jacksonville, FL)
October 13, 2010
Final Edition
Focus on IDs questioned;
Measure is meant to discourage hiring of illegal workers
BYLINE: Federico Quintero
SECTION: NEWS; Pg. 33A
Irv Johnson had a tough time finding work without a Florida ID.
It took four weeks to get his birth certificate from his home
state of Ohio so he could present it at the state motor vehicles
department. Then he was told he had some past-due tickets that he
had to pay. A local charity gave him the money to clear his traffic
record.
"It's crazy. I haven't been able to get a job because no one
will touch me without an ID," said Johnson, who with the help of
Jacksonville Urban Ministries was finally able to get an ID card.
Critics of Amendment 32 on the Nov. 2 ballot say the measure
could have unintended consequences for people like Johnson, an
American who until recently had a tough time proving he was a citizen.
The measure is meant to discourage the hiring of illegal immigrants by denying a state tax credit to an employer for each known
illegal worker on the payroll. Some fear employers might pass over
anyone who can't readily prove they belong in the country.
But backers say the law is aimed only at employers who willfully
hire illegal workers.
"It's part of a large strategy to reduce illegal immigration in
Florida," said Rep. Ted Berens.
"As long as there are jobs for illegal aliens, they're going to
come here. If there are no jobs for them, they go to other states."
And that's just what concerns Florida Farmers Union spokesman
Tim Dean.
Dean said increased pressure on farmers to scrutinize workers'
immigration status could result in hiring delays and ultimately
discourage laborers, both legal and undocumented, from seeking jobs
in Florida.
"No employer wants to hire
support immigration reform as
ida's economy," he said. "But
workers don't come to Florida
ing to have a problem."
people who are here illegally. We
long as you're not punishing Florif you make this an environment where
and go to Georgia instead, we're go-
Berens said the measure would have limited impact on employers
because only those who knowingly hire illegal immigrants would be
affected.
But Dean countered that although the measure does not apply to
employers who are given fraudulent documents, the onus is still on
them to verify IDs.
It's not the impact of Amendment 32 on employers, but on workers, that Jacksonville Urban Ministries executive director Jenny
Mulligan worries about.
She said increased demands on workers to present proper identification or supporting documents can often be a complicated and
time- consuming process.
At the offices of the community organization, helping clients
obtain a valid ID so they can get a job has become one of the services most in demand.
"For many people, especially the poor and transient, (getting an
ID) is not as easy as it sounds," she said.
INFOBOX
Amendment 32
* Would deny a state tax credit to an employer for each known
illegal worker on the payroll.
Who supports it: Defend Florida Now.
Who opposes it: Color of Justice.
If the ballot measure passes: Will employers have to pay more
taxes?
Employers would have to disclose on the state tax form the
amount of wages paid to workers who they know are in the country
illegally. That amount could not be deducted from reported income.
If approved by voters, the law would take effect in 2011.
* Are there exceptions?
The law wouldn't impact employers who pay for services in cash
or who unknowingly employ illegal immigrants.
Copyright 2010 Times Union Publishing Company
Immigration measure makes ballot
August 16, 2010
By Joel Hanel | Herald Miami Bureau
Miami - This election was supposed to be about illegal immigration.
Immigration ballot issue
Amendment 32: Illegal worker tax penalties
What it does: Businesses that hire illegal immigrants would have to give back a state
income-tax deduction.
Who is for it: Defend Florida Now
Who is against it: None yet
Who pays the bills: Just in July, Defend Florida Now took in $15,000 in small
contributions.
Last spring, more than 50,000 people rallied at the Capitol for immigrants' rights.
Conservative candidates vowed to use the issue to punish anyone deemed soft on
immigration.
Now comes Amendment 32. The initiative would penalize businesses caught hiring
illegal workers by taking back some of their tax breaks.
The group that proposed the ballot initiative - Defend Florida Now - said Amendment 32
is part of his group's plan to reduce illegal immigration
"This is a very necessary component of making it unattractive for illegal aliens to come to
Florida," the group’s leader, Fred Ebel, said.
But an Ocala activist says employers have no way to tell whether their employees have
fake immigration papers.
"All we're going to do is drive business away from Florida into the next state," said Aldo
Soto with Compañeros Latino Resource Institute. "How can one employer verify that
these documents are 100-percent true when our federal government can't do it?"
Under current law, businesses get to deduct their expenses - including salaries - from
their taxes. Amendment 32 would repeal a business's state tax deductions for illegal
workers, but only if it knowingly hired people who don't have legal permission to work in
the United States.
Rep. Richard Rose, R-Panama City, said Amendment 32 might not have much of an
effect, but he supports it anyway.
“If nothing else, it sends a message to the federal government that they need to get off
their duff and enforce the law,” Rose said.
Soto agreed that immigration law is a federal problem, but he said the amendment is a
bad idea.
"To me, it’s just a waste of time and money for no effect," Soto said.
The problem, he said, is that Congress continues to fail to agree on immigration law
reform.
"If you really want to send a message the day you go vote, vote the bums out in the
Congress who keep this from being addressed," Soto said.
Endorsements: Statewide initiatives
October 5-11, 2010 Pensacola Independent News
Amendment 32: Limiting tax breaks for businesses hiring undocumented workers
Just like individuals, businesses pay taxes based on the amount of income they earn. In
determining the income tax owed, businesses can first deduct all legitimate expenses,
including wages. Amendment 32 would not only require Florida businesses to disclose
the amount of compensation paid to undocumented immigrants, but also prevent such
wages from being counted as legitimate business expenses.
By discouraging the hiring of undocumented immigrants, Amendment 32 reduces the
financial advantage that a business gains when it pays lower wages to unauthorized
workers.
But the reality is that Amendment 32 will likely have minimal impact, since it has a
loophole a mile wide. This measure would only apply to corporations that knowingly pay
$600 or more annually to an individual undocumented immigrant. The key word is here
is knowingly. Moreover, those businesses that knowingly hire undocumented immigrants
would also have to self-report, and there is little incentive for businesses to do so.
This measure will accomplish little besides sending a message to Washington that the
people of Florida seek action on immigration reform.
‘Yes’ on 32
Voters can send a message on immigration
Bradenton Herald
October 10, 2010
Immigration reform is not an issue that will be resolved in this election, not on a national
level and not through state ballot measures. Florida voters do, however, have a chance to
express their concern about the issue - and to reject hypocrisy as an answer.
Toward that end, the Herald urges a "yes" vote on Amendment 32.
Views on immigration encompass the gamut of political, emotional and intellectual
expression. In general, however, they can be said to represent three camps.
The cultural left sees immigration mainly as a human-rights issue and worries about the
plight of immigrants. The pro-business right sees immigrants as a supply of cheap labor.
Both give lip service to the concerns of Americans worried about other effects of
immigration, but in the end dismiss those fears as nativist, protectionist or simply racist.
And those elements do exist. But beyond that lies a perfectly human apprehension about
how unfettered immigration is changing the country, and a profound anger at a
government that does not hesitate to make its own citizens obey the law, but that turns a
blind eye toward millions of acts of illegal immigration. One need not be a racist or to
reject free markets to be offended by the hypocrisy in that.
One example would be addressed by Amendment 32. At present, the burden for breaking
the law too often falls exclusively on illegal immigrants themselves. Effectively held
harmless are the employers whose jobs are the lure that drew the immigrants to this
country in the first place.
Amendment 32 is a gesture toward correcting that. It would require employers to disclose
how much they listed on their federal income for pay to "unauthorized aliens," which it
defines as anyone not eligible to work in the United States under federal law. It would
then increase those employers' state income tax by that amount.
That is hardly draconian. Nor, as critics point out, would it be particularly effective.
Compliance in revealing that they had knowingly hired illegal immigrants would be
voluntary.
But it is at least a recognition that illegal immigrants are not crossing the border
haphazardly. American businesses' demand for labor - and American consumers' demand
for inexpensive goods and services - are equally to blame. It is a hypocrisy in which we
all participate.
The false debate between those advocating an essentially open border and those
demanding an impossibly expensive wall has produced a situation in which the real
divide - the one between those concerned about illegal immigration and those who stand
to gain from it - is obscured by the borderland brutality of the status quo.
Voting "yes" on Amendment 32 will not solve that. It may, however, get someone's
attention.
Amendment 32 won’t solve
our immigration “problems.”
• Doesn’t apply to businesses
that pay workers in cash
• Doesn’t apply to payments
less than $600
• Doesn’t apply when workers
use fraudulent documents
•Doesn’t apply to federal tax
breaks
Plenty of loopholes.
No substance.
What’s the point?
No on 32.
www.ColorofJustice.net
Amendment 32 won’t solve
our immigration “problems.”
• Doesn’t apply to businesses
that pay workers in cash
• Doesn’t apply to payments
less than $600
• Doesn’t apply when workers
use fraudulent documents
•Doesn’t apply to federal tax
breaks
Plenty of loopholes.
No substance.
What’s the point?
No on 32.
Paid for by Color of Justice
___________________________________________________
Amendment 32
Limiting a State Business Income Tax Deduction
__________________________________________________
Ballot Title: SHALL STATE TAXES BE INCREASED ONE HUNDRED FIFTY
THOUSAND DOLLARS ANNUALLY BY AN AMENDMENT TO THE FLORIDA
CONSTITUTION THAT ELIMINATES A STATE INCOME TAX BENEFIT FOR A
BUSINESS THAT PAYS AN UNAUTHORIZED ALIEN TO PERFORM LABOR
SERVICES, AND, IN CONNECTION THEREWITH, PROHIBITS CERTAIN WAGES OR
REMUNERATION PAID TO AN UNAUTHORIZED ALIEN FOR LABOR SERVICES
FROM BEING CLAIMED AS A DEDUCTIBLE BUSINESS EXPENSE FOR STATE
INCOME TAX PURPOSES IF, AT THE TIME THE BUSINESS HIRED THE
UNAUTHORIZED ALIEN, THE BUSINESS KNEW OF THE UNAUTHORIZED STATUS
OF THE ALIEN UNLESS SPECIFIED EXCEPTIONS APPLY AND, TO THE EXTENT
SUCH A PAYMENT WAS CLAIMED AS A DEDUCTION IN DETERMINING THE
BUSINESS' FEDERAL INCOME TAX LIABILITY, REQUIRES AN AMOUNT EQUAL TO
THE PROHIBITED DEDUCTION TO BE ADDED TO THE BUSINESS' FEDERAL
TAXABLE INCOME FOR THE PURPOSE OF DETERMINING STATE INCOME TAX
LIABILITY?
Amendment 32 proposes a change to the Florida Constitution:
— increases state income taxes owed for some businesses that deduct wages or other
compensation paid to unauthorized aliens; and
— defines an unauthorized alien as a person who is not eligible under federal
immigration law to work in the United States.
Summary and Analysis
How do business income taxes work? Like individuals, businesses pay taxes
based on the amount of income they earn. In determining the amount of income on
which federal taxes are owed, federal law allows businesses to deduct all expenses that
are considered ordinary and necessary in conducting business, including wages. These
deductions lower the amount of federal taxes owed. Federal law does not specifically
exclude wages paid to unauthorized aliens from a business' income tax deductions.
State income taxes are based on federal taxable income. Therefore, any deductions
claimed on the federal form also lower the amount of state income taxes owed.
How does Amendment 32 affect state income taxes? Beginning January 1, 2011,
Amendment 32 requires a business to disclose the amount of wages or other
compensation paid to unauthorized aliens that it deducted as an expense on its federal
income tax return. Amendment 32 increases the business' state taxable income by this
amount, which results in a higher state income tax bill. This requirement applies only to
annual wages or other compensation paid of $600 or more per worker. Furthermore, the
requirement applies only in cases where the business knew at the time of hiring that it
was hiring an unauthorized alien.
Arguments For
1) Amendment 32 is part of a broad strategy for addressing the illegal
immigration problem at the state level. It targets the employment of unauthorized
aliens, which is the root cause of illegal immigration. As long as job opportunities for
unauthorized aliens exist, the incentive to come to Florida or overstay visas will persist.
2) By discouraging the hiring of unauthorized aliens, Amendment 32 reduces the
financial advantage that a business gains when it pays lower wages to unauthorized
aliens. As a result, it provides a more competitive environment for businesses that pay
higher wages to legal workers. By reducing the number of jobs available to
unauthorized aliens, more job opportunities will be open to Florida residents.
Arguments Against
1) Amendment 32 will likely have little or no impact on illegal immigration. In
fact, the proposal only increases taxes if a business voluntarily discloses that it paid
wages to unauthorized aliens. Furthermore, Amendment 32 would not impact a
business that pays for services in cash or pays wages to an unauthorized alien who was
hired using fraudulent documentation. As a result, no business in Florida is likely to
pay higher taxes. Finally, there is little incentive to stop hiring unauthorized aliens
because a business can get a federal tax break worth at least five times as much as the
additional taxes owed to Florida under this proposal.
2) Illegal immigration is a national issue, and therefore it is the responsibility of
the federal government to enforce and protect the country's borders. Hiring
unauthorized aliens is already against the law, which means that the issue Amendment
32 tries to address would not exist if current laws were enforced.
Estimate of Fiscal Impact
Amendment 32 may increase state income tax collections. Increased tax
collections are expected to be minimal because Amendment 32 does not apply in a
variety of circumstances, such as wages paid in cash or employment gained using
fraudulent documents, and compliance is expected to be inconsistent. If the state
collects more than $150,000 in the 2012 budget year as a result of Amendment 32, the
state is required to refund the excess amount back to taxpayers. A small expenditure for
the Department of Revenue will be necessary for computer programming in order to
add a line on the state income tax form.
State Spending and Tax Increases
The state constitution requires that the following fiscal information be provided
when a tax increase question is on the ballot:
1. the estimated or actual state spending under the constitutional spending limit
for the current year and each of the past four years with the overall percentage and
dollar change;
2. for the first full fiscal year of the proposed tax increase, an estimate of the
maximum dollar amount of the tax increase and of state fiscal year spending without
the increase.
Table 1 shows the dollar amount of state spending under the constitutional
spending limit. Table 2 shows the revenue expected from the increased income taxes
and state fiscal year spending with and without these taxes for 2012, the first full fiscal
year for which the increase would be in place.
Table 1: State Spending
Actual 2007
Actual 2008
Actual 2009
State
$7.713
$8.333
$8.311
Spending
billion
billion
billion
Four-Year Dollar Change in State Spending: $619 million
Four-Year Percent Change in State Spending: 8.0 percent
Preliminary
2010
$8.053
billion
Estimated
2011
$8.332
billion
The numbers in Table 1 show state spending from 2007 through 2011 for
programs that were subject to the constitutional spending limit during those years.
However, the constitution allows a program that operates similar to a private business
to become exempt from the limit if it meets certain conditions. Because some programs
have done this during the last five years, the numbers in Table 1 are not directly
comparable to each other.
Table 2: State Fiscal Year Spending and the Proposed Tax Increase
State Spending without New Taxes
New Income Tax Increase
State Spending with New Taxes
2012 Estimate
$9,221.17 million
$0.15 million
$9,221.32 million
Registered Issue Committees:
Favor:
Oppose:
Defend Florida Now
Fred Ebel
P.O. Box 280289
Tallahassee, FL 32301
850.245.6500
Color of Justice
Nadyne Benavidez
P.O. Box 9865
Miami, FL 33133
305.250.5300