While a physical border barrier is important, it is even more important to eliminate the incentives to draw illegal aliens even to try to cross the border.  Democrats will have a harder time explaining why we shouldn't increase taxes on corporations that hire illegal aliens than why a border barrier is "immoral."

While waiting out the Democrats over the partial government shutdown, President Trump could deliver a digital wall to stem illegal immigration by using a tool already at his disposal: the U.S. Tax Code.

Trump could simply direct the IRS to favor American businesses that hire persons legally permitted to work in the U.S.  This policy – call it "affirmative wage deduction" (AWD) – would cause an instant exodus of illegal aliens, potentially recoup billions of dollars in federal tax subsidies, and turn off the employment magnet that now draws thousands of aliens to breach our borders.

To do this, Trump should direct the Internal Revenue Service to redefine the terms "eligible wage and vendor deductions" under the tax code to require verification through an existing online database called the E-Verify System, compiled and operated by the Social Security Administration. 

E-Verify contains each enrollee's birth date, place of birth, address, and Social Security number, along with other personal data. 

Under the new definition, any employer who wishes to reduce its taxable income by deducting payments to employees or independent contractors would use E-Verify to determine if those payees are "confirmed" or "tentatively non-confirmed" as legally able to work in the U.S. 

If the worker is confirmed, then E-Verify could send an authentication code to the employer and to the IRS.  When the IRS receives this code, it will get the green light to allow the deduction claimed by employers.  If the IRS does not receive this code, it will automatically erect a virtual "wall" to detect non-confirmed labor expenses claimed in the employers' tax returns. 

The result: Legal workers are let in, and illegal workers are kept out of the tax equation, with the employer feeling the difference in its pocketbook.  The use of cheap and illegal labor to deprive Americans of entry-level jobs will no longer be unfairly rewarding those employers who are the financial beneficiaries of illegal immigration.  Best of luck to the Chamber of Commerce Republicans and the open borders Democrats to explain why this would be a bad idea.

Implementing the AWD program would require an adjustment period, where legal workers who don't have their paperwork in order with the E-Verify system could rectify any problems before the tax-deductibility of their wages or independent contractor payments is blocked.  AWD would require millions of legal American workers to log onto the E-Verify system to ensure that their pay will reduce their employers' taxable income, and no doubt, there will be some horror stories similar to the Obamacare rollout as the E-Verify system is stressed by the initial volume.  However, the long-term benefits make this a worthwhile endeavor.

AWD is not a panacea.  It doesn't prohibit companies from hiring illegal workers, and many may still find it cost-effective to do so.  As proposed here, this system would not be used as a "permission to work program" or a law enforcement tool by the U.S. Immigration and Customs Enforcement Agency.  It would not affect the gardeners, babysitters, and handymen who are paid cash with after-tax earnings by homeowners, who cannot claim these expenditures as business expenses.

The strategy's effectiveness relies on the profit motive of employers to voluntarily enforce federal immigration laws.  This is much less expensive than relying on ICE agents to round up illegals within our borders.

However, AWD is a compelling tax incentive program for businesses that follow the immigration laws and eliminates the competitive advantage enjoyed by employers who flout these laws.  At a combined federal and state marginal tax rate of over 50 percent in California, for example, any business-owner would earn greater profits hiring a legal worker at $19 an hour than hiring an illegal worker for $10 an hour.

Why should wages paid to persons who illegally entered or overstayed their visa be allowable deductions any more than parking tickets, currently disallowable deductions according to IRS rules?

Within months of adopting this change, millions of illegal ALIENS employed in the hospitality, meatpacking, agriculture, construction, and garment industries would be replaced by citizens without college degrees – the same voters who made up the core of President Trump's voting base.

By the use of the Social Security database, almost all working Americans would participate in AWD, with no subgroups unfairly targeted.  Most important for taxpayers and unemployed workers, this digital wall could be built more quickly, at a fraction of the cost of the physical barrier at the border.  The Open Borders Democrats won't be able to hurl the "racism" or "wasteful spending" epithets at AWD.

By utilizing an executive order to implement AWD, the president could demonstrate that he will utilize whatever authority is at his disposal to address the problem of illegal immigration, with or without Congress's cooperation, or the need for declaring a state of emergency.

Image: 401(K) 2012 via Flickr.