As the whirlwind of an upcoming presidential election approaches, immigration is once again a pivotal issue on the minds of many voters. Often, those against immigration argue that undocumented immigrants are “stealing jobs” and not contributing to the U.S. economy.
However, a recent study shows that is untrue.
New in-depth data from the Institute on Taxation and Economic Policy found that undocumented immigrants in Michigan contributed $290.1 million in state and local taxes in 2022. This amount would rise to $353.2 million if these taxpayers were granted work authorization.
In some states — such as New York, Florida, and Texas — contributions by undocumented immigrants exceed $1 billion annually.
Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022, with $37.3 billion going to state and local governments. Providing work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year.
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot,” Marco Guzman, ITEP Senior Policy Analyst and co-author of the study, said in a statement. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
Furthermore, the study found that for every 1 million undocumented immigrants residing in the country, public services receive $8.9 billion in additional tax revenue, money that would be lost if these individuals were deported. Additionally, more than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs like Social Security and Medicare, which these workers are unfairly not allowed to access.
In Michigan, undocumented immigrants pay a higher state and local tax rate of 8% compared to the top 1% of Michigan households, which pay 5.7%.
A press release noted that “while this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals.”
Considering the ripple effects, it is likely that undocumented immigrants have an even larger significance to public revenue.
“This study is another reminder that undocumented immigrants are contributing to our economies and our shared public services,” the press release continued. “Immigration policy choices made in the years ahead will have significant consequences for public revenues.”
The full study can be found at the Institute on Taxation and Economic Policy website.
