According to a new report, undocumented immigrants contribute an average of nearly $9,000 in taxes per person to the United States, making a significant economic impact. The report suggests issuing work permits to undocumented immigrants.
The Institute on Taxation and Economic Policy (ITEP) released a new report on July 30 stating that undocumented immigrants paid a total of $96.7 billion in taxes to federal, state, and local governments in 2022. Of this amount, $59.4 billion went to the federal government and $37.3 billion to state and local governments. On average, each undocumented immigrant paid $8,889 in taxes, contributing an additional $8.9 billion in tax revenues per million undocumented immigrants.
Of the taxes paid by undocumented immigrants, $25.7 billion went to Social Security taxes, $6.4 billion to Medicare taxes, $1.8 billion to unemployment insurance taxes, but they are not able to access these benefits. At the state and local levels, nearly half (46% or $15.1 billion) of their tax contributions came from sales and consumption taxes, 31% ($10.4 billion) from property taxes, and 21% ($7 billion) from personal and corporate income taxes.
The report highlights that California, Texas, New York, Florida, Illinois, and New Jersey each received over $1 billion in tax revenue from undocumented immigrants.
The report indicates that by providing undocumented immigrants with legal work permits, their tax contributions could increase by $40.2 billion, totaling $136.9 billion, with the majority going to the federal government ($33.1 billion) and the remainder to state and local governments ($7.1 billion).
Therefore, the report suggests granting work permits to undocumented immigrants to boost their income and tax contributions while reducing barriers to tax compliance. This would inject more vitality into the U.S. economy.