A new study from the Institute on Taxation and Economic Policy (ITEP) found that undocumented immigrants in the United States pay roughly $11.6 billion in taxes every year. This number includes local and state taxes. On average, undocumented immigrants pay about 8% of their incomes in taxes.
About Half of Undocumented Immigrants Pay Taxes
Research suggests that half of the 11 million undocumented immigrants living in the U.S. file income taxes with ITINs (Individual Tax Identification Numbers). Additionally, those who don’t file income taxes may have taxes automatically taken from their paychecks.
The ITEP report said, “Like other people living and working in the United States, undocumented immigrants pay state and local taxes,” and “The best evidence suggests that at least 50 percent of undocumented households currently file income tax returns…”
If undocumented immigrants were given legal status, tax contributions could increase by $2.1 billion and the national tax rate would increase by 9%.
Supreme Court to Make Decision on Deferred Action
In 2012 and 2014, President Obama saved millions of undocumented immigrants from deportation by granting relief through executive actions. Should the Supreme Court favor the DAPA (Deferred Action for Parents of Americans) and DACA (Deferred Action for Childhood Arrivals), about 5 million individuals would benefit. These same people would increase tax contributions.
Immigration Reform and the 2016 Presidential Election
Not surprisingly, immigration reform continues to be a prominent political issue in the United States. The study said, “Immigration is a leading issue among the 2016 presidential candidates…Accurate information about the tax contributions of undocumented immigrants is needed now more than ever.”
Nominee Donald Trump stated he would deport many – even millions – of immigrants if elected, while Bernie Sanders and Hillary Clinton both plan to continue the path toward immigration reform.