Undocumented residents in the United States pay an estimated $11.74 billion annually in state and local taxes, an amount that would increase significantly if these immigrants were given a pathway to citizenship, according to a new report from the Institute on Taxation and Economic Policy.
On average, the nation’s estimated 11 million undocumented residents pay about eight percent of their incomes in state and local taxes every year. California’s 3 million undocumented residents contribute an estimated $3.2 billion annually, the most out of any other state, followed by $1.5 billion in Texas and $1.1 billion in New York. The report, released Thursday by the non-partisan research group, refutes long-standing arguments from conservatives and critics of illegal immigration, who say undocumented residents are a drain on the nation’s economy and hurt taxpayers.
“Good policy is informed policy,” said co-author Meg Wiehe, the institute’s director of programs, in a statement. “Just as the horrendous impact of breaking up families under a mass deportation policy should not be ignored, nor should policymakers overlook the significant contributions undocumented immigrants make to our state and local revenues and the economy.”
“Keep in mind most state and local taxes are collected from people regardless of citizenship status,” Wiehe added. “Undocumented immigrants, like everyone else, pay sales and excise taxes when they purchase goods and services. They pay property taxes directly on their homes or indirectly as renters. And, many undocumented immigrants also pay state income taxes.”
But Ira Mehlman of the Federation for American Immigration Reform said their $11.7 billion contribution in taxes covers only a small fraction of what undocumented residents and their dependents use in government services. The Washington, D.C. organization, which favors stricter immigration enforcement, estimates it collectively costs state and local governments about $84 billion a year to provide education, health care, public safety and other services to undocumented residents and their dependents.
“Like most reports of this kind, it is based on the flawed assumption that all of the economic output of these illegal workers would disappear if these workers left or were removed from the country,” Mehlman said in an email. “That is not the case. In most cases, legal workers will fill the jobs, likely at higher wages.”
To calculate current and potential tax contributions, the Institute on Taxation and Economic Policy estimated undocumented resident populations in each state; the average size of undocumented resident families; the range of annual undocumented resident family/taxpayer income in each state; the estimated number of undocumented resident homeowners and the estimated tax rates for sales, income and property taxes paid by low and moderate-income families in each state.
