Undocumented immigrants in the U.S. pay more than $11 billion a year in state and local taxes, according to a new study by the Institute on Taxation and Economic Policy. In 42 states, undocumented immigrants pay in taxes a higher share of their income than do the wealthiest 1 percent in their respective states.
A common misconception is that undocumented immigrants avoid paying taxes. In fact, undocumented individuals pay sales and excise taxes, property taxes and, in some instances, personal income taxes. The study determined that at least 50 percent of undocumented households currently file income tax returns through the use of individual tax identification numbers, and many have taxes automatically deducted from their paychecks.
In a state like Alabama, the study found, the effective tax rate for undocumented individuals was 7.2 percent, 3 percentage points higher than the 3.8 percent effective tax rate that the wealthiest 1 percent pay in that state. Alabama is no way alone in this development; 42 states currently tax undocumented people more than their wealthiest denizens.
The study concluded that undocumented immigrants "make considerable tax contributions."
In addition, the study said, "Like other immigrants and U.S. citizens they purchase goods and services, work, and live across the country," adding, "Proposals to remove immigrants ignore their many contributions. In a time when most states are facing revenue shortages, the potential budgetary impacts of mass deportation merits careful consideration."
According to study estimates, if every undocumented immigrant were to be deported from America, the country would lose $11.74 billion in revenue.
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