On Tax Day, Remember the Contributions of Unauthorized Immigrants
This month, millions of Americans will file their taxes, and millions more have already done so. But what many Americans may not consider as they file their taxes are the immense federal, state and local tax contributions made by unauthorized immigrants.
According to a recent study by the Institute on Taxation and Economic Policy, unauthorized immigrants pay an estimated $11.64 billion in state and local taxes each year, adding significant amounts of money to the coffers of all 50 states and the District of Columbia.
Contributions by unauthorized immigrants also help to ensure the solvency of programs like Social Security. The Chief Actuary of the Social Security Administration reported that in 2010, for example, unauthorized immigrants paid a net $12 billion in tax revenue into the system.
But as much as these individuals contribute, their unauthorized status keeps them from doing even more. Studies show that bringing unauthorized immigrants off the economic sidelines and allowing them to work legally would boost their earnings, which translates into more tax revenue generated. Importantly, it would also produce more economic activity across the United States, higher wages for all Americans, and more jobs created.
In November 2014, President Obama announced a slate of executive actions on immigration, among them the Deferred Action for Parents of Americans and Lawful Permanent Residents, or DAPA, and the expansion of 2012’s Deferred Action for Childhood Arrivals, or DACA. Together, these initiatives would allow parents of citizens and green card holders, as well as people who came to the country many years ago at a young age, to register with the government, submit to background and security checks, and request temporary protection from the threat of deportation and permission to work legally.
These are people who are well settled into our nation and our communities: Nearly 70 percent of people eligible for DAPA have lived here for at least 10 years, and a full quarter have lived here for twice as long.
Full implementation of DAPA and DACA would significantly expand federal, state and local economies. All 50 states and the District of Columbia would see an increase in tax revenues, for a total addition of $805 million brought in each year. The national economy would grow by a cumulative $230 billion over a decade, the incomes of all Americans would grow by $124 billion over a decade, and an average 29,000 jobs would be created each year.
And yet, even with such positive economic benefits, Texas and 25 other states filed a lawsuit against the executive actions, blocking DAPA and expanded DACA from going into effect. These states allege that the initiatives will impose on them “millions of dollars in costs.” But they are completely ignoring the overwhelming increased revenues they would gain.
Texas alone, for example, would see an additional $154 million in new tax revenues each year under full implementation of the immigration actions. The state would also see the earnings of all of its residents rise by $17.6 billion over a decade, and would see on average 4,800 additional jobs created each year.
Yet Texas continues to ignore these gains, and instead is spearheading this politically motivated attack on immigrant families. Let’s be clear: This lawsuit is bad for our nation’s economy. The non-partisan Joint Committee on Taxation found that blocking the deferred action initiatives would increase the size of the federal deficit by $7.5 billion over 10 years.
This year, Tax Day happens to fall on April 18, the same day that the U.S. Supreme Court will hear arguments on Texas’s lawsuit. A ruling by the court is not expected until late June, but when the sun sets on Tax Day 2016, unauthorized immigrants already will have made an enormous contribution to our federal, state and local economies and to our tax rolls. A decision from the court that allows DAPA and similar policies to move forward will only increase those contributions.
