SAN JOSE, Calif. — 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 8 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 nonpartisan research group, refutes long-standing arguments from conservatives and critics of illegal immigration — among them President Donald Trump — who say undocumented residents are a drain on the nation’s economy and hurt taxpayers.
The analysis is an updated version of a similar report released by the institute last year.
“We felt very compelled to publish an updated report given the need for accurate data at this time, considering that the president is pushing immigration policies that rely on the flawed assumption that immigrants are a drain on the economy and aren’t contributing,” said co-author Meg Wiehe, the institute’s director of programs.
“Given the current political context that we’re in, the flip side is understanding what’s at stake with mass deportations. It would mean billions of dollars lost in state and local revenue at a minimum.”
But Ira Mehlman of the Federation for American Immigration Reform said their $11.74 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.
Mehlman also said the report is based on “the flawed assumptions” that all of economic contributions of undocumented residents would disappear if they were to leave or if they were removed from the country.
“That is not the case,” he said in an email. “In most cases, legal workers will fill the jobs, likely at higher wages. These workers would also be more likely to be working on-the-books, so a greater percentage would have payroll taxes deducted.”
The report also found that granting legal status to all undocumented residents in the U.S. as part of comprehensive immigration reform, which would allow them to work legally, would increase their state and local tax contributions by an estimated $2.18 billion a year.
“They’re complying at fairly high rates, in large parts because they want to be citizens,” said Wiehe. “They want to be here for the long term.”
