Boosting tax revenues

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Series Details Vol.12, No.9, 9.3.06
Publication Date 09/03/2006
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Date: 09/03/06

The economic benefits of immigration are much argued over, in part because they have become one of the principal reasons for the EU to open up its borders.

A 2005 report by the Institute for Public Policy Research in the UK found that immigrants have become proportionately greater net contributors to public coffers than people born in Britain.

In a Green Paper on economic migration published in December 2005, the European Commission noted that skills shortages were already being found in some sectors of the EU's economy and an overall fall in employment could be expected from 2010.

With deaths projected to overtake births from 2010 and countries such as Germany, Hungary, Italy and Latvia already encountering a reduction in their working-age populations, migration has been identified as an important ingredient in ensuring economic success in the future.

Brunson McKinley, director-general of the International Organization for Migration, suggested recently that well thought-out policies were needed to harness the potential which migrants offer. "Legal migration channels are an essential instrument in the combination of measures required to satisfy European legal market needs," he said. "The lack of adequate legal channels in the context of the existing supply-demand gap in the labour market not only adversely affects economic growth in Europe but also continues to fuel irregular migration and undermine support for strong asylum systems."

Franco Frattini, the commissioner for justice, freedom and security, has promised to draft a set of laws on the rights to which migrants admitted to the EU will be entitled and on the conditions under which highly skilled foreigners can be allowed to live and work here. Some of the proposals, he has confirmed, will be similar to the US Green Card system. But he has also made clear that he will not be proposing a general entry scheme for workers without professional qualifications, knowing that a system of that nature would not gain acceptance from many EU governments. He has said, too, that decisions on how many migrant workers should be allowed into the EU will be left to the discretion of its member states.

Among the other measures being planned by the Commission are the setting up of a database on legal migration with countries neighbouring the Union. The purpose of this service would be to inform citizens of those countries about jobs on offer in the EU and how they can apply for them.

Yet while migrants with medical or technological qualifications can expect to earn far more in the EU than they would in their home countries, the situation is vastly different for some other categories of workers.

In the US, an Associated Press investigation concluded in 2004 that Mexicans are 80% more likely to die than American-born workers due to accidents in the workplace. "There is no evidence that this is any different in Europe, rather the contrary," says a recent study by the Platform for International Co-operation on Undocumented Migrants (PICUM).

PICUM is advocating that EU governments and institutions should give serious thought to making it easier for undocumented migrants to obtain legal status. Bringing these migrants into the mainstream economy would be a way to boost tax revenues, its report says.

Author takes a look at the debate on the economic impact of immigration and the European Commission's plans to propose legislation in the field of legal migration.
Article is part of a European Voice Special Report, 'Migration policy'.

Source Link http://www.european-voice.com/
Related Links
European Commission: DG Justice, Freedom and Security: Freedom, Security and Justice: Immigration: Work http://ec.europa.eu/comm/justice_home/fsj/immigration/work/fsj_immigration_work_en.htm
European Commission: DG Justice, Freedom and Security: Documentation Centre: Immigration: Work http://ec.europa.eu/comm/justice_home/doc_centre/immigration/work/doc_immigration_work_en.htm
European Commission: PreLex: COM(2004) 811, Green Paper on an EU approach to managing economic integration, 11.1.05 http://ec.europa.eu/prelex/detail_dossier.cfm?CL=en&ReqId=0&DocType=COM&DocYear=2004&DocNum=0811
European Commission: PreLex: COM(2005) 669, Communication … Policy Plan on Legal Migration, 21.12.05 http://ec.europa.eu/prelex/detail_dossier.cfm?CL=en&ReqId=0&DocType=COM&DocYear=2005&DocNum=0669
Institute for Public Policy Research: Paying their way. The fiscal contribution of immigrants in the UK, April 2005 http://www.ippr.org/ecomm/files/Paying%20Their%20Way.pdf

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