Immigration Fact Check: Undocumented Immigrants Already Paying Billions in State/Local Taxes

John Neurohr |

Immigration has been a hot-button topic on the campaign trail this year, and it will continue to be as the Supreme Court hears arguments in the coming months regarding President Obama’s recent immigration executive action.

Just this week, the Institute on Taxation and Economic Policy released a comprehensive report on the state and local tax contributions of undocumented immigrants. In the public debate about immigration policy, there are often gross inaccuracies about undocumented immigrants that are presented as facts. This important report provides state-by-state and national estimates on undocumented immigrants’ current state and local tax contributions, including a breakdown of sales and excise, personal income, and property taxes.

Nationally, the numbers are pretty staggering:

  • Undocumented immigrants contribute significantly to state and local governments, collectively paying an estimated $11.6 billion in state and local taxes.
  • Undocumented immigrants’ nationwide average effective state and local tax rate (the share of income they pay in state and local taxes) is an estimated 8 percent. (The top 1 percent of taxpayers nationwide pay an average effective tax rate of just 5.4 percent.)
  • Granting legal status to all 11 million undocumented immigrants as part of a comprehensive immigration reform and allowing them to work in the United States legally would increase their state and local tax contributions by an estimated $2.1 billion a year.  Their effective tax rate would increase from 8 to 8.6 percent.
  • The state and local tax contributions of the 5 million undocumented immigrants who could be directly impacted by President Obama’s 2012 and 2014 executive actions would increase by an estimated $805 million if the actions are upheld and fully implemented.

For Pennsylvania, undocumented immigrants pay over $139 million in state and local taxes. That number would increase by more than $17 million if President Obama’s executive order is upheld, and it would increase by over $51 million if congress passed a full immigration reform bill.

Read the full report here, and take a look at the state-by-state impact map here.

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