While some Americans may see undocumented immigration as a drain on the US economy, a new study has revealed further insight into how undocumented immigrants contribute to society at the material level.
Immigration Issues
Anti-immigrant senti`ment is on the rise in the US, as greater numbers of people flock to the southern border to enter the country illegally. 55% of Americans want to curb US immigration, according to a new poll by Gallup.
New Study on Economic Impact
However, a new study suggests that undocumented immigration is better for the economy than many of those people might think.
The Institute on Taxation and Economic Policy
Late last month, the Institute on Taxation and Economic Policy (ITEP), a non-profit progressive think tank focusing on state and federal tax policy, released a new report titled ‘Tax Payments by Undocumented Immigrants.’
$100 Billion in Taxes
The study found that undocumented immigrants paid close to $100 billion ($96.7b) in taxes in 2022 alone.
At the Federal, State, and Local Levels
This included federal, state, and local taxes, with $37.3 billion going to state and local tax authorities, and the rest going to federal taxes.
Per One Million People
Overall, the study found that the average undocumented immigrant paid $8,889 in taxes in 2022, with public services netting an additional $8.9 billion in annual taxes per 1 million undocumented people living and working in the country.
Countering Anti-Immigrant Narratives
The institute acknowledged that their findings run counter to anti-immigrant narratives that attempt to paint undocumented immigration as a burden on US society and the economy.
Dispelling Immigration Myths
“I think we’re able to dispel a lot of myths around this one-sided idea that undocumented immigrants are claiming benefits and not paying any taxes,” said Carl Davis, the research director of the ITEP. “It’s really not tethered to reality.”
Paying More Than the Top 1%
At an average rate of 8%, undocumented immigrants are currently paying more tax than the top 1% of earners in the US, despite not being eligible for many taxpayer-funded programs like Social Security, Medicare, and Unemployment Insurance.
A Harsh Paradox
“Hundreds of thousands of everyday people are contributing more than their share to public services they cannot even access meanwhile those with the most to give and the most to benefit contribute the least,” said Alexis Tsoukalas, a policy analyst at the Florida Policy Institute.
Enormous Potential
What’s more, the study sheds light on the potential for undocumented immigration to generate much more revenue in federal taxes, since many of these workers are still paid under the table.
Work Authorization for All
The ITEP used the study to call for an expedited work authorization process for these immigrants. Work authorization would provide benefits across the board – for the individuals and their families, as well as the US economy.
Additional $40 Billion
If these immigrants were given access to a legitimized workers program, they would bring an additional revenue of approximately $40 billion a year – $7 billion in local and state taxes, and $33 billion in federal taxes.
Increasing Wages and Tax Compliance
It would raise wages for most immigrants and increase rates of tax compliance for many immigrants who are currently paid under the table.
A Difficult Time for Immigration Rhetoric
The study has been released during a time when anti-immigrant rhetoric has ramped up and been bolstered by political campaigns and policies.
White House Executive Order
Back in June, the Biden administration issued an executive order that would allow the federal government to deport asylum seekers once the number of illegal entries into the country reached a certain threshold.
Promising Mass Deportation
Republican presidential nominee and former president Donald Trump has also pledged to execute mass deportations of undocumented immigrants if he is successfully elected in November.
Consider the Economy
While immigration policy is often a major focus during election years, Davis and the ITEP have urged people, including public officials, to consider how mass deportations would affect the economy, given the data they have uncovered.
Impact on the Work Force
“If we’re going to dramatically change course on immigration policy, say through ramping up deportations, for example, that’s really going to shrink the size of the labor force,” he said.
Folks Who Contribute
“These are folks who have been here for quite a while, and who are really contributing to the economy and to our funding of our public services in significant ways,” David continued.
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