As I walk through New York City’s bustling Chinatown, I’m surrounded by a crowd of mostly Chinese immigrants scurrying in and out of restaurants, markets and shops. I rush past a large group of tourists trying to score the best deals on fake designer bags, trinkets and knickknacks. The smell of fresh fish, sweet bread and sidewalk trash fill the air.
After weaving in and out of heavy foot traffic, I arrive to a wedding banquet, which was held at a large restaurant. While seated at one of the big round tables, I met a man, who I’ll refer to as Wong, who was overzealous in revealing how he’s achieving the American dream.
Wong immigrated to the U.S. 20 years ago with his wife Ling and two sons. Like many immigrants, he didn’t speak any English and had no particular skills. He worked as a chef at a small restaurant in Chinatown.
Ling worked at a factory as a garment worker and only half of her wages was reported to the IRS, while the other half was paid under the table.
Wong’s family tried to save diligently, but could never save enough to feel like he was living the American dream. Wong’s biggest complaint was taxes, which took out a chunk of his family’s savings potential.
Seeing how Ling’s wages were paid 50 percent in cash, Wong wanted something similar. After several years bouncing around the restaurant industry as a chef, he got a big break as a senior supply chain manager.
Wong got paid entirely in cash for this job, but on paper, he lied and said he was still a part-time chef.
For more than 10 years, he gave a stack of cash — which included a generous “tip” — to a restaurant owner friend, who agreed to file a W-2 tax form for Wong to the amount of just a few thousand dollars. As far as the IRS knows, Wong’s yearly income was less than $10,000.
Wong knew what he was doing was illegal and could result in large fines and a prison sentence of up to five years. He didn’t care.
For the past decade, Wong and Ling filed a household income that was close to the poverty line while they accumulated plenty of cash. They relied heavily on safe deposit boxes rather than use bank accounts.
The American dream, funded by the government
Another perk of being “poor” is that you can qualify for low-income housing, which are also known as “the projects,” or government subsidized apartment buildings. While housing projects are can be found in any city across the U.S., in New York City, the projects are large clusters of 20-story brick apartment buildings.
Wong’s family lives in a housing project in the Lower East Side where he pays less than $600 per month for a two-bedroom apartment. He doesn’t pay for electricity or gas.
New York City is one of the top 10 most expensive cities in the U.S., and a similar apartment in nearby areas could easily cost more than $2,500 per month in rent alone.
When Wong’s two sons applied for college, they were eligible to receive more financial aid because their income was considered low for the household size.
Wong’s son received a decent financial aid package when he attended NYU. His other son went to a city college, where the financial aid exceeded his tuition costs, so he got paid to go to school.
Both sons have since graduated and have jobs where their income is reported, and they no longer depend on Wong, financially.
All these savings allowed the family to purchase a nice house in Queens, which they rent out for more income while they continue to live in the projects.
Wong is wrong?
If you’re like most Americans, you’ve paid your taxes, and this story about Wong’s family probably makes your blood boil. “They’re leeching off the government, while I pay my taxes,” you might say. “It’s unfair how these people take advantage of such benefits when they don’t need it.”
In Wong’s point of view, he believes that tax evasion not only helps his family save money, it’s a way to help his kids to live normal lives so they don’t have to be tax evading criminals.
His philosophy is to cheat the system with a goal in mind.
Wong defended his tax scheme and said that many people who live in low-income housing projects don’t make an effort to “get out,” and it’s this attitude that produces a multi-generational dependency on low-income privileges. He believes this is a much bigger drain on government resources, compared to what he’s doing.
With the children grown up and financially independent, Wong and his wife soon plan to move out of the housing projects to their home in Queens.
Wong’s illegal methods for building wealth was his path to achieving the American dream, and while his story may not be unique, it’s a way of life for many immigrants in New York City’s Chinatown.
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Simon Zhen is a research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations, and financial technology.
Simon has contributed and/or been quoted in major publications and outlets including Consumer Reports, American Banker, Yahoo Finance, U.S. News – World Report, The Huffington Post, Business Insider, Lifehacker, and AOL.com.