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maylane

Sep 21, 2006, 8:30 AM

Post #1 of 30 (4615 views)

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MORE GRINGO TAX

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Hello, Who determines where or what is a sales tax. To explain, in different locations in Mexico I have been charged a sales tax on purchases. If its real than fine, but how do we know and on what? Its not the money its the gingoness of it.



Moisheh

Sep 21, 2006, 7:44 PM

Post #2 of 30 (4517 views)

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Re: [maylane] MORE GRINGO TAX

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To the best of my knowledge there is only one consumer sales tax: IVA- 15 %. This is a value added tax and applies to most everything other than groceries, drugs and a few other staples. In a country where cheating on your taxes is a birthright this is the only way for the Feds to collect taxes. What you have noticed is that some stores show the tax included in the price while others add it on at the caja.

Moisheh


esperanza

Sep 21, 2006, 9:25 PM

Post #3 of 30 (4496 views)

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Re: [Moisheh] MORE GRINGO TAX

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If you buy something (many services, some goods) and are asked if you want a factura and you say yes, you will always pay the IVA. If you don't require a factura, you will be given a nota and will not pay the IVA.

Factura: official, numbered receipt, reportable to the government
Nota: unofficial receipt, good as proof of purchase at the store but not reportable to the government

http://www.mexicocooks.typepad.com









sfmacaws


Sep 21, 2006, 9:28 PM

Post #4 of 30 (4494 views)

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Re: [esperanza] MORE GRINGO TAX

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...and that can be an important difference. When getting supplies last year to paint after the hurricanes, I didn't get a factura for the first batch of paint. Can't use a nota for the insurance pay out either so I had to go back, pay the IVA and get the factura.


Jonna - Mérida, Yucatán




jerezano

Sep 22, 2006, 8:44 PM

Post #5 of 30 (4383 views)

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Re: [sfmacaws] MORE GRINGO TAX

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Hello,

The IVA 15% value added tax. Interesting subject.

As pointed out earlier the IVA is collected on almost all goods and services. It is not collected on foodstuffs and some medications. I can't think of any other exceptions. Books used to be excepted but are no longer.

Most professional services are also taxed but I have yet to see the IVA noted. But then many professionals don't issue receipts either.

On your purchase receipt if issued by a government approved cash register the total of your purchases will be shown. Also those items which are taxed and those not taxed (say in a grocery store which also sells soaps, cosmetics, hair coloring, etc,) will usually be noted. The total will be shown which INCLUDES the tax. Then following the total will be shown the IVA amount collected.

Now on small purchases, many times in a mom & pop store the cashier will not ring it up on the cash register. When they do that, you can be sure that the purchase will not be reported to the government. How they cross check with their inventory is a wonder. If the cashier is an employee perhaps the money will go into the employee's pocket. If it is mom or pop or a relative, then it will go to them.

Which brings us to restaurants. The IVA by law is always included in the price although some Tourist Traps are now listing the base price only on the menu and adding IVA on at check-out. This is strictly illegal, but they are doing it anyway. Some restaurants are issuing receipts and on some receipts the IVA collected is noted; on others not so.

The idea mentioned above that if you get a factura you must pay the IVA but if you don't get a factura you don't have to pay the IVA is completely new to me. I haven't run into this in my 18 years here. One wonders if the seller is silently cursing the necessity of issuing the factura because he now has to report the sale on his rendition of impuestos at a later date when he perhaps thought he was home free. I wonder if the seller in those cases where the Goodwill of the buyher doesn't merit the effort will deny the factura?

This non-reporting idea also applies to controlled medications. If you want a receipt, then you must have and deliver the prescription. If you don't want a receipt, some druggists will sell you the medication without the prescription. Now how they handle that on their inventory question pops up again.

Here in Mexico the evasion of taxes is a major game. Many nuances. If they had our IRS down here many people would be a lot poorer and probably many small business would be forced to close.

But no, the IVA is not a gringo tax. Everybody pays it. Way back in ancient times tourists could show their FM1 document and be excused from paying it. Those times are long gone.

Adiós. jerezano.


sfmacaws


Sep 22, 2006, 8:51 PM

Post #6 of 30 (4381 views)

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Re: [jerezano] MORE GRINGO TAX

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When purchasing hard goods; paint, tile, lumber, etc I pay a lower price without the IVA if I don't need a factura. I'm certain that these sales are not reported and that it is a well used practice for evading taxes. This is in Quintana Roo, usually Playa del Carmen but also in the city of Cancun (not the tourist zone). Same thing for furniture, framing, reupholstery ... I'm thinking of things as I write that this has happened with. I'm always asked if I need a factura and have gotten in the habit of saying no and taking the lower price. However, I had to get facturas on all the repairs and replacements that I did following the 2 hurricanes because I submitted them to the insurance company. They would not take simple notas.


Jonna - Mérida, Yucatán




esperanza

Sep 22, 2006, 9:15 PM

Post #7 of 30 (4369 views)

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Re: [jerezano] MORE GRINGO TAX

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Jerezano, I can think of very few times--from buying fabric to buying building materials--that a salesperson has not asked me, "¿Necesita usted factura?" I simply reply, "La pura nota, no más." And I'm never charged IVA.

This does not apply when I'm shopping at Costco, Wal-Mart, or another big-box store. In those stores, IVA is always charged on whatever merchandise is appropriate, as you mentioned. But in smaller stores--not necessarily mom-n-pops, but stores owned by individuals rather than huge corporations--la nota is inevitably the order of the day.

I'm surprised you haven't been aware of this.

http://www.mexicocooks.typepad.com









Papirex


Sep 22, 2006, 10:28 PM

Post #8 of 30 (4355 views)

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Re: [esperanza] MORE GRINGO TAX

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Esperanza, the collection of the IVA tax here in Cuernavaca is the same as you and Jonna have described. In the big stores and restaurants, the IVA is always collected and listed on your receipt (factura).

In the smaller businesses you are normally asked if you want a factura. If you say yes, you are charged the IVA tax. One dentist in Cuernavaca, and one in Mexico City have even asked me if I wanted a factura.

In the really tiny businesses, hole in the wall restaurants, aborrotes, verdaduras, barber/esteticas, etc., it isn’t even mentioned. You pay the cash and walk out. No factura, no nota, no IVA.

I think this practice is probably done nationwide. The federal government doesn’t seem to have an accounting program capable of comparing the wholesale purchases made by any business with their retail sales or the will to create one.

Rex

"The supreme happiness of life is the conviction that we are loved" - Victor Hugo


jennifer rose

Sep 23, 2006, 7:55 AM

Post #9 of 30 (4315 views)

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Re: [RexC] MORE TAX

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Could we please stop calling this "gringo tax?" The amount of IVA paid by foreigner isn't even a roundoff.


Brian

Sep 23, 2006, 9:02 AM

Post #10 of 30 (4295 views)

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Re: [jennifer rose] MORE TAX

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I have always thought that the "gringo tax" is the amount which foreigners pay more than do Mexicans for goods and services. It is a fact of life in Mexico. Just part of the cost of doing business.

saludos
Brian


doogie

Sep 23, 2006, 11:20 AM

Post #11 of 30 (4260 views)

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Re: [Brian] MORE TAX

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I agree. The confusion started at the beginning of the thread when "gringo" tax was equated with sales tax. What has always been called "gringo tax" is the higher price that is sometimes charged to "gringos" by merchants in mercados and other casual settings who do not mark prices. And even when prices are marked, the locals know it is an inflated price.

How to avoid it? Learning Spanish helps, also learning which are the honest merchants and doing business exclusively with them.

doogie
Doogie,
Tapatío de corazón


Bubba

Sep 23, 2006, 1:01 PM

Post #12 of 30 (4237 views)

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Re: [doogie] MORE TAX

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I do not see why people think it is dishonnest to charge more to people who will pay more. Before you buy something, you ask for the price, if you do not like it do not buy, it is your choice to buy at a higher price in Mexico.

When you vacation in Hawaii and fly interisland you pay the tourist price, when you stay in a hotel you pay the tourist price, the locals pay the local price. Do you consider that dishonnest?

When you visit a place and do not know what things are worth to locals this is what happens. When we traveled in Thailand I always expected to pay more for cabs the first day we arrived in town . You had to negociate your fare and since we did not know the value of the ride we got screwed. That is life. Going back to a station or an airport you always paid more as they knew you had no choice and no time to shop around.. The second day we got smarter and we knew what things were worth but in the case of the airport we always paid a higher price on the return trip.
As a tourist anywhere you get taken advantage of for a few days, if you live in Mexico you should know what things are worth. If someone is taking advantage of you do not shop there. The same applies everywhere except in Hawaii where you must have a local ID to get the local prices. Learn Spanish and know people you deal with.


tony


Sep 27, 2006, 9:07 AM

Post #13 of 30 (4120 views)

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Gringo Tax - IN REVERSE!

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Just to show this happens NOB:

My brother had a Mexican crew paint his house. The crew normally paints for a large developer in Calif.
The painters bought the paint from a large paint chain store. The front of the house got painted before
it was realized that the color was wrong. The store had botched the paint color. The lead of the crew
returns to the closest store to return paint and get correct color. Mind you the lead is a Mexican national.
He is told by the mgr that they cannot give him the correct paint since he bought it at another location.
He is also told they don't have the color formula. Also the lead could BUY another color and then try to get
his money back at the original store the following week. Mind you the job is now stopped. He is ready
to eat the paint he has purchased.

I get on the phone and am told the same story along that the original store has the correct formula and
that they are trying to locate that formula. I basically tell them I fell off the turnip truck a long time ago.
They sold the crew the wrong color, they are obligated to correct their mistake. The original store
doesn't have the formula because they gave us the wrong paint. They can make the corrected formula
at that store now and if they don't we will be asking to be compensated for stopping the job due to their
error.

I get a call 10 mins later from the crew lead. The store "magically" got the formula and are mixing the corrected color.

The crew lead thanked me and said he ALWAYS is given a hard time when he runs into this problem.

Tony

"We don't see things as they are, we see things as we are."


ignacio

Oct 2, 2006, 1:33 PM

Post #14 of 30 (3991 views)

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Re: [tony] Gringo Tax - IN REVERSE!

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More Gringo tax in reverse....

Most of these undocumented workers get charged by their employers for Social Securityand State/Federal Income Tax.

These people have no paperwork, and such "TAX" goes to the pockets of their employers. Of course they are in a 'Catch-22' situation, since they can NOT complain to the authorities about this outright theft.


pat

Oct 2, 2006, 2:11 PM

Post #15 of 30 (3980 views)

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Re: [ignacio] Gringo Tax - IN REVERSE!

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"These people have no paperwork, and such "TAX" goes to the pockets of their employers."

Do you have any proof that this is done on a wide scale? Not just one or two here and there, but on a scale large enough for you to make such an all-encompassing statement.

I would think it more likely that the majority of these folks are paid "off the books" for whatever hourly wage has been agreed to. I doubt that many are being docked for taxes that are not paid to the government.

I can see that is likely that those who have been employed under a false SSN have had taxes withheld. In those cases, I would bet that most taxes have been paid to the government. If that's not the case, the employers have a much bigger problem than just employing illegal immigrants.

Whether an illegal immigrant ever receives SS benefits for taxes paid, or not, is another issue altogether.

But, since I can't prove my theory, I will call it what it is. An opinion.

Pat


(This post was edited by pat on Oct 2, 2006, 2:15 PM)


sfmacaws


Oct 2, 2006, 2:19 PM

Post #16 of 30 (3973 views)

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Re: [pat] Gringo Tax - IN REVERSE!

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It's a quite probable opinion Pat, it definitely synchs with my experience. Off the books and in cash is how those with no SSN get paid, maybe on the books and by check if they have an SSN. From what I have read, the fake SSNs are easy to come by and if the employer doesn't check much then the taxes are probably paid or the worker is still paid in cash off the books. Makes no sense to collect SS taxes and not pay them, that's really chancy.


Jonna - Mérida, Yucatán




esperanza

Oct 2, 2006, 4:37 PM

Post #17 of 30 (3940 views)

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Re: [ignacio] Gringo Tax - IN REVERSE!

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Let's have a look at this:
http://select.nytimes.com/...768CDDAD0894DD404482

And this:
http://www.talkleft.com/...archives/010246.html

And this:
http://www.townhall.com/...bout_social_security

And this:
http://www.washtimes.com/...518-114132-2456r.htm

Then we can talk about how many undocumented workers pay into Social Security, and how many actually receive SS benefits.

The poster is wrong who said that SS payments go into the pockets of employers. The payments go into the SS funds that are paid out to eligible senior citizens: you and me.

http://www.mexicocooks.typepad.com









(This post was edited by tonyburton on Oct 2, 2006, 4:42 PM)


Don


Oct 2, 2006, 4:41 PM

Post #18 of 30 (3933 views)

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Re: [esperanza] Gringo Tax - IN REVERSE!

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Here is another article to checkout.

http://www.reason.org/...almia_20060501.shtml


patricio_lintz


Oct 2, 2006, 6:29 PM

Post #19 of 30 (3903 views)

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Re: [pat] Gringo Tax - IN REVERSE!

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I've done taxes for some undocumented persons.

Almost all who work for corporate or registered entities were on the books. They filed taxes with a goverment furnished TIN- Tanxpayer ID Number.

The ones off the books, obviously don't file. But I'll bet that there are more US citizens off the books than illegals!

Our government is not above collecting taxes from aliens, documented or not. The ones that I filed taxes for were looking for money back.

Checks will only be sent to a street address or a bank account. This could lead back to them, but up to now, it had not been a problem. The tax documents actually document in some cases that they were working under a SS# but filing under a TIN. This could lead to criminal charges, if the government got nasty. But then this source of tax revenue would be shut off.

Oh what a tangled web we weave when we install a bureacracy with agencies working at cross purposes!

A supervisor for a company who rebuilt our house, after a fire, said that he did not care where the SS# came from- a friend, a relative, it did not matter. He just needed a number.


(This post was edited by patricio_lintz on Oct 2, 2006, 7:27 PM)


pat

Oct 2, 2006, 6:52 PM

Post #20 of 30 (3891 views)

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Re: [esperanza] Gringo Tax - IN REVERSE!

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Ok, Esperanza. I'll buy all that... Perhaps I put too much emphasis in my statement that the MAJORITY of illegal immigrants were paid off the books. That was an over-statement. My intent wasn't to assert that Illegal immigrants didn't pay SS taxes. My argument was aimed at the assertion that employers were taking advantage of their illegal employees by pocketing the taxes they withheld. Perhaps you can find an instance or two, but on a large scale? Nonsense.

As I said, whether or not the illegal immigrants ever receive SS benefits for the taxes they have paid is another issue altogether.

But, if you want to pursue that issue, there is also another issue the needs to be addressed... and that is how much do illegal immigrants cost our system in the form of unpaid state and local taxes, un-reimbursed medical costs, etc. I don't know the answer to the question, but I think that all the variables need to be cranked into the equation before we decide that illegal immigrants in the USA are being grossly mistreated.

I doubt it's all a one-way street, with illegal immigrants doing all the giving and receiving little in return.

Pat


tony


Oct 2, 2006, 9:17 PM

Post #21 of 30 (3857 views)

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Re: [pat] Gringo Tax - IN REVERSE!

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Hello,
There is no such thing as a one way street. Immigrants come here illegally,
are paid lower than local wages, they pay into our tax system, have very little
protection. In spite of all of this the illegals save more money than they did
in Mexico. Hell they save more than your average gringo.

Employers get hard working people who are cheaper than the local work force.
It would be foolish to pay these guys off the books. Employers would have to hide
this money. Instead they pay into a phony SS#. The gov't NEVER contacts
the employer and says " please take this tax money back, it doesn't jive with
the employee's name" !! It is gov't dirty little secret. They ALWAYS tell the
public that illegals cost money but hide the fact that illegals pay into our
tax system. At best this is a wash.

I believe this is a mutual dance between illegal immigrants and the
gov't in the US. Your average illegal is basically invisible to your average
citizen in that there is very little impact in our daily lives. The illegal is just
another low wage worker, just like most service workers in the US.

What tees me off is when my gov't tries to present the illegal as the "enemy"
or that they now are a security risk. They are just an ongoing part of the US economy - something that have gone on since the birth of this nation. I am starting to slip off my soapbox..... Tony

"We don't see things as they are, we see things as we are."


nfabq

Oct 2, 2006, 9:44 PM

Post #22 of 30 (3847 views)

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Re: [pat] Gringo Tax - IN REVERSE!

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Apparantly,Pat, you didn't check out the link posted as #10 in this thread by Don.
Check it out and get your answer.

Norm


pat

Oct 3, 2006, 7:30 AM

Post #23 of 30 (3798 views)

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Re: [nfabq] Gringo Tax - IN REVERSE!

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Norm, yes, I read it, and thought it was a pretty good article. Then I got to the last paragraph which states that "immigrant bashers" raise the issue of the cost of illegal immigrants "to whip up indignation against people they don't want here in the first place". At that point my jaws got a little tight. Still, other than that bit of biased viewpoint causing me to mutter obscenities to myself, I enjoyed the article.

The article does have a valid point, though. I think we (me included) are skirting the real issue here when we talk about taxes and who is paying their fair share and who is not getting their rightful due.

But I also think we need to accept that it is possible for one to be concerned about illegal immigration without being anti-Mexican, anti-Latino, racist, or whatever. But in case there is still any doubt, let me state it plainly for the record, I am a Mexicophile. Always have been. Raised in Texas and love the mix of Anglo/Mexican culture prevalent in many Texas cities and burgs. My wife and I frequently vacation in Mexico, and are contemplating the possibility of retiring there. I am not against Mexicans and other Latinos immigrating to the US. They bring a culture and ethic that I admire. I would also favor a guest worker program, if that is what we need.

Nevertheless, I am very concerned with the lack of control we have on who comes over our borders, and I am not just talking about potential terrorists either. If we have millions of illegal immigrants in our country, we have a situation that needs to be addressed.

We need a system that will allow us to control who, and in what numbers, non-citizens are allowed into our country. Do I think we can ever design the perfect system?.... of course not. But the system we have now, IMHO, is badly broken.

There has to be a better way, and we need to continue to discuss the problem and possible solutions in an open and thoughtful manner.

Whew, being pleasant and non-controversial for as long as it has taken me to write this has given me a terrible headache, so I will leave it at that.

Pat


Goody2shs

Oct 3, 2006, 11:18 PM

Post #24 of 30 (3697 views)

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Re: [pat] Gringo Tax - IN REVERSE!

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Really, this illegal immigration situation is a three-prong problem: 1.- you have the actual illegal immigrants who feel they rightfully should be allowed to stay in the country and who feel they have earned that right through "adverse possession" simply by having been able to avoid discovery by immigration for years and thus have established roots. Truth is they have committed an illegal act by entering this country WITHOUT permission by this country's authorities.

2. - There exists an unfairness to other immigrants equally or possibly more qualified, but who don't have the advantage of having their borders so close, and who have to struggle and fight for a place in line to be allowed to enter the U.S. legally - yours truly included. Even though married to an American soldier while overseas, and having a child, in order to become an American citizen or even to be permitted to enter the country, I had to provide a stack of legal papers, affidavits and more, proving that I was worthy of being admitted to the country. Even though I was already fluent in the English language, had graduated from a private language and business school in Europe, I still had to wait six months or more to be able to enter the country with my American husband and child. After entry into the country, I then had to wait another 5 years before being allowed to become a citizen. --

and 3. - there is the government that has to and needs to uphold the criteriae for proper balance of nationals and races so as to not outweigh one over the other in years to come. Examples are Great Britain and possibly Germany, where the scales are getting ready to tip in the opposite direction of the countries' original make-up. This all becomes very delicate territory and obviously also sensitive decision making on the part of the lawmakers. Open discussion of the subject has basically become politically incorrect and therefore may never be resolved.

To add to the dilemm, there is now this 4th element, which is also troublesome, as many U.S. businesses, particularly the construction industry, have become reliant on the immigrant from SoB to do many tasks, and often outstandingly well, that they simply cannot get done through existing work forces. What will America do or how will it look when all the good workers who keep us swept up and mowed and roofed and paved - are gone?

And lastly, I hesitate to think what might happen to some of you expatriots, had you entered Mexico by just cutting a fence, crossing over and setting up house somewhere, no FM3, no papers of any kind, not speaking Spanish but instead asking them to issue everything in English, starting a job, and lastly DEMONSTRATING in the streets demanding your "rights". Tough situation.


caldwelld


Oct 4, 2006, 7:18 AM

Post #25 of 30 (3663 views)

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Re: [Goody2shs] Gringo Tax - IN REVERSE!

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Wrong on all counts! Most illegal immigrants from Mexico have no intention of staying since they have little chance of getting legal papers. They are there for the short term to earn a bunch of $ in a hurry. Illegal hispanics from other LAmerican countries south may have different motives.

Secondly the illegal immigrants, according to the US gov’t do not affect either numbers or time in line for regular immigration. Furthermore the number of illegal immigrants (if the numbers were only known) is much, much smaller than the regular immigration numbers.

Thirdly the balance issue is bogus. Compared to immigration periods in US history – Hispanics (legal and otherwise) represent only about 14% of the current US population whereas Germans in the late 19th and Irish in the 20th centuries respectively represented a much greater portion of the existing US population at that time – raising the very legitimate question as to how much of the current controversy is race-based.

Fourthly the notion that all the bottom feeders in the US workforce are illegal Mx immigrants is not supported by the facts. Of the 30 to 40 million Hispanics in the US there are less than ¼ actually without papers. There are a lot of Asian, mid-east, African and European immigrants workers at the bottom, not to mention long time citizens of various colors.

Finally, the demonstrations in the US were not demonstrations of illegal immigrants but rather demonstrations by Hispanic citizens among many others expressing solidarity with the illegal cause and a more even hand in managing the very delicate immigration and border issue. The nubers of illegal immigrants in those demonstrations was miniscule.

No one is suggesting the US should not manage its borders properly. The problem is they have not been doing that for many years and now have a problem, or at least a perceived problem. How they go about solving it is up for discussion and could have a serious impact on their relations with a very good neighbor south. That is what the debate is about.

What is ironic, but at the same time both amusing and heart warming, and the reason why we all in the end love America and Americans is that here you are as a new or almost new citizen arguing as if you have been there all your life with all of the rights and privileges and responsibilities that implies. Bravo!
dondon
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