MYTH: Migrants do not pay taxes

MYTH: Migrants do not pay taxes

Immigrants, including those without official document, pay every year billions in local currencies in taxes to state and local governments, as well as income taxes, sales taxes, taxes on property, etc.

Evidence from the United States:

Undocumented immigrants contribute billions of dollars in federal taxes each year, and their income taxes and payroll tax dollars are keeping Social Security and Medicare solvent.

But it’s also worth noting that undocumented immigrants are paying billions of dollars in state and local taxes each year — in all 50 states.

While it’s impossible to get the exact numbers because of the limited data available, researchers at the left-leaning Institute on Taxation & Economic Policy estimate that undocumented workers paid a total of $11.7 billion in state and local taxes in 2014, the most recent year of data, according to their 2017 report.

That includes $7 billion in sales taxes and excise taxes, which are those paid on specific items like gas sales and vehicle registrations. Undocumented immigrants, like everyone else, pay for highway repairs, state courts, police, and firefighters. They also paid about $1.1 billion in state income taxes and $3.6 billion in property taxes that year — money that funds public schools, garbage collection, and other city services.

Undocumented workers contribute the most tax dollars to states with the largest populations: California, Texas, and New York. Yet some states that benefit the most from their tax money are red and blue states that Trump won in 2016: Florida, Georgia, Texas, North Carolina, and Arizona.

According to the report, the 10 states that benefited the most from undocumented taxpayers in 2014 are:

  • California, $3.2 billion
  • Texas, $1.6 billion
  • New York, $1.1 billion
  • Illinois: $758,881,000
  • Florida, $598,677,875
  • New Jersey, $587,415,000
  • Georgia, $351,718,000
  • North Carolina, $277,402,000
  • Virginia, $255,965,000
  • Arizona, $213,574,000.

Also, a report from the Congressional Budget Office estimates that immigration reform could provide more than $450 billion in additional federal revenue over the next decade.

It’s important to keep in mind that these numbers are just estimates, but they’re the best that exist. To come up with state and local tax contributions, economists at the Institute of Taxation & Economic Policy crunched data from the US Census Bureau and the Migration Policy Institute to determine the likely number of undocumented immigrants in each state, their average incomes, and their homeownership rates. Researchers used that data to calculate how much they pay in sales tax, property taxes, and excise taxes, based on tax rates in each state.

Evidence from United Kingdom:

Oxford Economics carried out the assessment on Migration Advisory Committee (MAC) request to investigate net contribution of migrants to UK economy.

The Oxford Economics study, was the first measure of the total contribution of the “class of 2016” migrants who arrived in the UK over the entirety of the expected stay.

Migrants from the EU contribute £2,300 more to the exchequer each year in net terms than the average adult, the analysis for the government has found.

And, over their lifetimes, they pay in £78,000 more than they take out in public services and benefits - while the average UK citizen’s net lifetime contribution is zero.

Oxford Economics said this meant the value of EU citizens to the economy was the equivalent of slapping 5p on income tax rates.

Study also calculated that non-European migrants will make a positive net contribution of £28,000 - £50,000 less than the £78,000 for EU arrivals – when the budget is balanced.

In total, the net benefit from the class of 2016 was expected to be £26.9 billion, with £19.3 billion coming from EU migrants and the remaining £7.5 billion from migrants from the rest of the world.

On an annual basis, while EU migrants contribute £2,300 more than the average, each non-European migrant contributed £800 less than the average – and each UK‑born adult £70 less.


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