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SALT LAKE CITY — A new study on tax contributions by immigrants lacking legal status shows they paid nearly $97 billion to federal, state and local coffers in 2022.
If granted work authorization, the tax contribution by the group would increase by nearly 42%, from $96.7 billion to $136.9 billion, says the new study released Tuesday by the Institute on Taxation and Economic Policy. Immigrants lacking legal status in Utah contributed some $235.1 million in state and local taxes in 2022, the report says. The figure would increase by 24.4% to $292.5 million if they received work authorization.
"The bottom line here is that regardless of immigration status, we all contribute by paying our taxes," Marco Guzman, senior policy analyst for ITEP and co-author of the study, said in a statement. The "economic ripple effects" of the population, ITEP said, "would likely reveal undocumented immigrants to have an even larger significance to public revenues than is documented here."
Nevertheless, the new report from the non-profit, Washington, D.C.-based tax policy organization is hardly the only take on the topic. It is the focus of intense debate as U.S. lawmakers try to get a handle on illegal border crossings into the country via Mexico.
The Center for Immigration Studies, a research organization that views immigration issues through a more conservative lens, says immigrants lacking legal status are "a net drain" on the U.S. economy. Yes, they pay taxes, but one researcher told a U.S. House subcommittee in January the cost of government benefits immigrants tap into surpasses their contributions, resulting in a "fiscal drain" of around $68,000 per immigrant who lacks legal status, over the course of their life.
"Illegal immigrants have a negative fiscal impact — taxes paid minus benefits received — primarily because a large share have modest levels of education, resulting in relatively low average incomes and tax payments, along with significant use of means-tested programs and other government services," Steven Camarota, the CIS director of research, said in testimony to a House Judiciary Committee subcommittee on immigration on Jan. 11.
Still, even the well-researched contentions from the center don't offer a neat-and-tidy end to debate on the thorny issue.
The $68,000 figure is an extrapolation of data from a 2017 study on the fiscal impact of all immigrants, authorized or not, by the National Academies of Sciences, Engineering and Medicine. Contrary to the Center for Immigration Studies' determination, the 2017 study summary offered an upbeat assessment of the economic impact of immigrants, at least over the long haul.
"First-generation immigrants are more costly to governments than are the native-born, but the second generation are among the strongest fiscal and economic contributors in the U.S. This report concludes that immigration has an overall positive impact on long-run economic growth in the U.S.," it states.
Tax revenue coming in
The new study from the Institute on Taxation and Economic Policy estimates undocumented immigrants paid $59.4 billion in taxes to the federal government in 2022 and $37.3 billion to state and local governments, accounting for the estimated $96.7 billion total.
"In other words, for every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue," the study reads.
The collective contribution amounted to 26.1% of the population's overall income in 2022 — on par with the 26.4% figure for median-income earners in the country.
Social Security taxes accounted for the largest chunk of funds paid to the feds, totaling $25.7 billion. Sales and excise taxes on purchases accounted for the biggest chunk of local and state taxes paid, some $15.1 billion, the report said.
Granting "work authorization" — a controversial notion — would boost the $96.7 billion figure to $136.9 billion "both because their wages would rise and because their rates of tax compliance would increase," the institution reports.
The report doesn't provide an estimate of the value of government services tapped by immigrants who don't have work authorization. The Center for Immigration Studies, by contrast, put a big focus on the area.
"Based on government data, we estimate that 59% of households headed by illegal immigrants use one or more major welfare programs, compared to 39% of households headed by the U.S.-born," Camarota said in the report.
The center's figures, though, include benefits and services going to U.S. citizens — the U.S.-born children of those without work authorization.
"The high use of welfare by illegal-immigrant-headed households is due to several factors. First, and most important, more than half of all illegal immigrant households have at least one U.S.-born child on behalf of whom they can receive benefits," Camarota said in his testimony. Camarota also noted that some states offer Medicaid benefits to some immigrants without work authorization and that "illegal immigrant children" can get free and subsidized lunches at public schools.
