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White Nationalist Report Guesses That Immigrants Commit Tax Fraud

By Leah Nelson on April 19, 2011 - 4:16 pm, Posted in Anti-Immigrant, White Nationalism

Just in time for tax day, the white nationalist Social Contract Press has released a special report claiming that immigrants — legal and undocumented alike — are manipulating the Earned Income Tax Credit (EITC) to cheat taxpayers out of billions.

The report, “Defrauding the American Taxpayer — The Earned Income Tax Credit,” is packed with questionable assumptions and leaps of logic, undisguised racial and ethnic stereotypes, and some truly bizarre assertions, such as the suggestion that liberals have secretly colluded with Wal-Mart to undermine unions and the minimum wage. A thin veneer of economic argument against the EITC does nothing to hide that the report is typical Social Contract report fare, designed to stoke nativist and white nationalist fears about the day that the white majority is eclipsed.

In broad strokes, its claims — a mishmash of fact and conjecture — can be summarized thusly:

  • The EITC, which enables low-income families to claim a tax credit for each child, serves as a “perverse incentive,” encouraging beneficiaries to have more children.
  • A disproportionate number of EITC beneficiaries are immigrants and minorities, because poverty rates are higher among those groups. Combined with the significantly higher birth rate among Latino immigrants, the report reasons that the EITC is hastening the day when whites will no longer be a majority of the U.S. population.
  • It is known that undocumented immigrants often use stolen Social Security numbers to apply for jobs. The report conjectures — but offers no evidence — that they must also be using these numbers to claim EITC benefits and otherwise defraud hardworking citizen taxpayers.

“While native-born women are having fewer babies, fertility among their foreign-born counterparts has generally continued to increase,” the report states. “The role of EITC in the nation’s demographic destiny cannot be denied.”

Sure it can — or, at the very least, debated.

By the report’s logic, the EITC encourages poor women to have more babies. Yet research shows that this presumption doesn’t hold true for all racial groups — suggesting that factors other than tax benefits determine birth rates.

According to a 2009 study published in the Journal of Population Economics, white women receiving EITC actually had fewer children than white women who did not receive the benefit, while minorities had more. Other studies have shown that Mexican women in Mexico — where there is no EITC — have more children than Mexican women who immigrate to America — again, suggesting that there are forces at work other than an American tax break when Mexicans plan their families.

The report repeatedly confuses correlation with causation. The fact that poor minority women are both more likely to receive EITC benefits and have high birth rates doesn’t mean the tax credit causes increased fertility.

Marc Rosenbaum, a senior policy analyst at the Migration Policy Institute, said that even though many undocumented immigrants use stolen Social Security numbers to apply for jobs, they are unlikely to use those numbers to claim benefits like the EITC for the simple reason that “it [would] open them up to investigations and being audited.” He added, “A lot of unauthorized immigrants make a point of paying their taxes, trying to establish a record of presence and employment.” But when it comes time to collect on the system into which they’ve paid, the risk simply isn’t worth it, he said.

The author of the Social Contract report, Edwin S. Rubenstein, is an economist and journalist with an Ivy League pedigree and conservative bona fides that include working for the Hudson Institute, the Manhattan Institute, Forbes magazine and the National Review. He is also a regular contributor to, a white nationalist website whose founder, Peter Brimelow, also once worked at the National Review and Forbes. The two have been writing together since at least 1997.

It’s no surprise that the Social Contract would draw on a VDARE contributor: the two white nationalist organizations frequently prop each other up. The publications are linked, as well, through Donald A. Collins, a frequent VDARE contributor who once sat on the board of Federation for American Immigration Reform (FAIR). FAIR’s founder is John Tanton, a Michigan ophthalmologist and the racist architect of the modern anti-immigrant movement. Tanton created the Social Contract Press and a constellation of other nativist organizations, including the Center for Immigration Studies (CIS), whose reports are a principal source of the dubious conclusions in Rubenstein’s report.

Rubenstein, despite making many claims about the fraudulent activities of undocumented immigrants, acknowledges that the Treasury Department’s recommendations for reining in EITC fraud make no mention whatsoever of immigrants.

The report also argues that “liberal activist groups” are pushing up the cost of the EITC by “partnering” with immigrants to perpetuate a fraud-ridden system, in part by publishing “[f]lyers in Hmong, Tagalog, and eighteen other languages – designed to hook immigrants into the EITC culture.”

Rubenstein ends with a peculiar bit of speculation about liberals and Wal-Mart. He postulates that by helping immigrants access the EITC, liberals enable giant corporations to underpay workers and discourage unionization.

“Why do liberal activists tout EITC and ignore other, relatively less-used, poverty programs? Why do they downplay the minimum wage? Are they in league with the Walmarts [sic] and McDonalds [sic] of the world?”

Not likely.

  • marlo

    Hmmm? So people living on $1-2 dollars a day, assuming they are being paid in dollar’s, have learned how to cheat on taxes like those of us born here in America? Well it’s about time! I respect people who will walk thousands of miles to get in a better place and care for their families. Unlike some of the guys i know collecting 99 weeks of unemployment, not even trying to learn a new skill, and can’t pass a no notice drug test. If we want to improve the global economy, we need every one working in real jobs, including the 5.5 billion poor who don’t have deed or title to anything.

  • Jonas Rand

    “how’d he get in there”

    See Hobbes. Note the order in which they were listed (though I should have put Calvin first).

  • CM


    Sorry if I misunderstood, but you did use a term, “classical liberal,” that has a specific meaning, and that meaning is what I responded to. As for whether liberal/conservative equates to left wing/right wing, that argument strikes me as just as revisionistic as the classical liberal label. The left wing/right wing scheme dates from the French Revolution, so applying it to Hobbes, Locke, Smith or Calvin (how’d he get in there?) is anachronistic. And in any case, the “left” has from the beginning been the wing of social reform and workers’ rights as against landlords’ and capitalists’ privileges. An argument like Rubenstein is making appears to me to want to detach “liberalism” from this context in order to argue that liberals ought to behave like Randian libertarians. But with liberals like that, who needs conservatives?

  • Ruslan Amirkhanov

    It must really burn neo-liberals to know that their hero Pinochet and the “Chilean miracle”(I guess it’s called a miracle because he made people disappear) involved nationalizing the banks in 1983(to stave off a total collapse), not to mention the fact that Pinochet never privatized the lucrative Anaconda mines.

  • EarleyDaysYet

    LOL @ Peter. FSM FTW.

  • Jonas Rand

    Neither Hobbes, Calvin, Smith, Locke, or Mill had all the same market-crazy ideas as the right-wing “libertarians” of Friedmaniac persuasion (but they were right-wing). Indeed, when their ideals were implemented, during Pinochet’s dictatorship beginning in 1973, it resulted in fascism. Chile soon became an authoritarian tyranny, complete with secret police, military rule, torture chambers for dissidents (even the folk musician and social justice activist, Victor Jara, was tortured in one), and paranoia. I agree that saying that today’s liberals are not “true liberals” “is intellectually vacuous”, which is why I didn’t argue that. It obfuscated things somewhat to put “liberal” in quotation marks, but that was because many people mistakenly equate liberalism with left-wing ideas. My point with regards to the reference to classical liberalism was that throughout history, “liberalism” has referred to ideas that are not left-wing in nature.

  • Peter Hockley

    Long live The FSM. may he touch you with His Noodley Appendage!

  • CM


    “Classical liberalism” is a 20th-century construction created by libertarian-leaning, market-oriented thinkers as a fake intellectual justification for their own ideology. It’s an attempt to paint their troglodytic-conservative opinions as being in the truest tradition of Hobbes, Locke, Adam Smith, etc. etc., and therefore the true way to true “liberty.” At the same time, it’s also a deliberate tactic meant to delegitimize garden-variety liberalism as something “new” and its focus on regulation and social activism as contrary to the “genuine” (i.e., laissez-faire free-marketarian) liberal tradition. So trotting out the concept to argue that today’s liberals aren’t “real” liberals is intellectually vacuous. But it’s certainly true that there are few left-wingers in Congress, and the “center” is increasingly skewed toward the right. That’s the main reason life for Americans outside the capitalist elite has, in fact, gotten more Hobbesian: nasty, brutish and short.

  • Jonas Rand

    The supposed dichotomy of “liberal” (not to be confused with “left wing”) vs. “conservative” is a false one. Classical liberals (who held something like the ideology of the US Libertarian Party) were more right wing than some of today’s conservatives in the US. Many “liberal” American politicians today, though, are just centrists, and not left-wing at all. There are few American left-wingers in the legislature.

  • IludiumPhosdex

    “Why do liberal activists tout EITC and ignore other, relatively less-used, poverty programs? Why do they downplay the minimum wage? Are they in league with the Walmarts [sic] and McDonalds [sic] of the world?”

    What exactly, pray, are the “other, relatively less-used, poverty programs” being alluded to or implied here?

    Are they of the sort which expects capitalism with American characteristics to be seen in a “Great White Father” context (cf. official United States Government attitudes towards Native Americans of a century or more ago, which excused their being housed on reservations with no realistic job or career prospects thereon)?

    Are they based on the Afrikaner nationalist ideals of Volkseenheid (“organic unity of the people”). Reddingsdaad (“mutual self-help”) and Volkskapitalisme (“people’s capitalism”), the latter to be financed through subscriptions to Reddingsdaadfonds (“mutual assistance funds”) as would theoretically finance business startups among Afrikaners, only to wind up being administered through the likes of Volkskaas and Sanlam?

    Are they based on “school-to-work” initiatives as are really little more than drunken, bromide-laden propaganda lectures having little or no realistic value in developing job or career skills in the vulnerable and impressionable?

    Or what exactly prevents their citing specific examples? Is it because they don’t know of any as would fit in with their articles of faith?

  • CM

    “Why do liberal activists … downplay the minimum wage?”

    Surprise, surprise, another far-rightie who lives on the Bizarro planet. On Earth, of course, the minimum wage was created by liberals and every raise in it since then has been won by liberals over the resistance of pro-market conservative and neo-conservative ideology-pushers like Rubenstein’s former employers.

    It’s true, though, that “liberal activists” don’t believe minimum-wage jobs are a solution to poverty. That’s because the conservative opponents of the minimum wage – supported also by the Wal-Marts and McDonaldses of the world – have managed to stop it from rising enough to keep pace with the cost of living and enable workers to survive on it. All in all, it just looks like another example of the libertarian right’s blame-the-victim approach to everything.

  • Shadow Wolf

    This is typical hogwash coming from the usual kvetches of Right-wing lunatic blather.
    The first poster pointed out some good intake on how taxes are managed. Illegal aliens(or undocumented otherwise) can not qualify.

    If one wants to know who the real tax evaders are. It’s the big Republican backed American corporations that has relogated their companies in tax-free havens, i.e. such as Ireland, Switzerland, Norway etc. for the past decade or so. This tax scheme is so vast, that it ranges in the billions of back taxes withheld in accounts overseas. These billions of dollars are owed to the United States. And its why the economy has not fully recovered as we thought, is based literally on those big capitalist tax evaders–courtesy of the Republican Party.

  • Hatewatch


    That was a typo and has been fixed. Thanks for letting us know.

    – Hatewatch Staff

  • Ian

    Is “Social Contract Report” a different publication from Social Contact Press or is that a typo?

  • Nikolai Pizarro

    I don’t get it, ONLY citizens qualify for EITC. Also, you could have 20 kids and it doesn’t matter since you get EITC on a fixed #.

    EITC fraud is a REAL issue, I worked for rapid reform tax preparation firm for 4 years. We did 10k+ return per year in that market and not once did a fradulent case come from an immigrant client. It’s always citizens with fake w2s and/or claiming dependents that are not their own.

    EITC fraud mostly comes down to the tax preparation industry. Citizens generally don’t dare to send in fradulent documents themselves. They do it through rapid refund services for the most part. It is NOT an immigration issue.

    If any thing, like the article stated, immigrants pay into system and never get benefits of tax code or collect social security benefits, unemployment, etc.