Undocumented immigrants paid taxes amounting to $96.7 billion in 2022, including funding for government programs that they cannot access, according to a report by the Institute on Taxation and Economic Policy (ITEP), a left-leaning think tank. Roughly one-third of their tax payments included $ 25.7 billion to fund Social Security and $6.4 billion to fund Medicare.
Although one of the most common arguments for limiting immigration is the cost borne by the U.S. government, the study showed that undocumented immigrants pay about 26 percent of their income in taxes, Bloomberg News reported.
In total, undocumented immigrants paid $8,889 per person, in federal, state and local taxes in 2022. That translates to public services receiving $8.9 billion in additional tax revenue for every one million undocumented immigrants who reside in the country.
Six states raised more than $1 billion each in tax revenue from undocumented immigrants living within their borders, the report found. Those states are California ($8.5 billion), Texas ($4.9 billion), New York ($3.1 billion), Florida ($1.8 billion), Illinois ($1.5 billion), and New Jersey ($1.3 billion).
In 40 states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders, the report found.
The ITEP estimated the tax payments of undocumented immigrants in several categories, including sales and excise taxes; property taxes paid directly or on taxes folded into rent payments; and payroll taxes, which are paid either through paycheck withholding or filing income tax returns.
The report estimated that providing a path to work authorization would raise the tax contributions of undocumented workers by improving their tax compliance and wages, as data demonstrate that immigrants with employment authorization earn higher wages. If all undocumented immigrants were legally allowed to work in the United States, their tax contributions would increase by $40 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, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP senior policy analyst and co-author of the study, in a statement. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”