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That would give the government an economic incentive to enforce the law. Hiring illegals is of course against the law, but currently the law is rarely enforced. On the other hand, it implies that it's ok to break the law, that violating the law just means you have to pay a tax. Why would people comply with a new tax law when you're telling them laws don't really have any meaning?
I think the other half of the equation has to be improving LEGAL immigration, cutting down on the paperwork and getting people in faster if they do it legally. There's not a huge demand for illegal car registration stickers, for example, because it's easy enough to get one legally.
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