Undocumented Immigrants Contribute Over $11 Billion to Our Economy Each Year

Ian Pajer-Rogers |

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From The Nation:

by Michelle Chen

Immigration briefly seized the podium at the Florida Democratic debate, with both Bernie Sanders and Hillary Clinton trying to calibrate their message toward Latino voters by vowing to pursue a more humane immigration policy and critiquing President Obama’s record of mass deportations. Still, there was precious little discussion of undocumented immigrants as anything but a problem to be dealt with.

The candidates could have looked at new economic data showing that in Florida, undocumented immigrants contributed $588 million annually in state and local taxes. That revenue, which is paid by people who are powering the local economy as all other Floridians are, through their labor and consumption, is drawn from sales and excise taxes ($454 million) and property taxes ($134 million).

Altogether, according to the fiscal analysis—published by the Institute on Taxation and Economic Policy (ITEP)—undocumented immigrants contribute about $11.6 billion to the economy annually, including nearly $7 billion in sales and excise taxes and $3.6 billion in property taxes. They are, in economic terms, productive citizens, and pay a higher effective tax rate than the top 1 percent income bracket. That alone is not the primary reason they should be embraced as neighbors and coworkers. But it dissolves the myth that immigrants do nothing but drain public coffers.

An even larger boost would come from a full implementation of the executive actions that Obama rolled out for undocumented youths and parents earlier in his term: deportation relief granted to youths who arrived as children without authorization and a similar initiative for parents who are undocumented but have children born in the United States.

Under these policies—which have been obstructed by court challenges—up to 5.2 million undocumented immigrants could be granted relief, and cumulatively contribute “an estimated $805 million a year” in state and local taxes.

Election-season politics aside, ITEP calculates that state coffers have a lot to gain from essentially handing the undocumented green cards: about $2.1 billion annually on top of the current $11.6 billion, based on the most recent data, about half of that from personal income tax withheld, and a third from sales and excise taxes. In other words, if only our immigration system were rationalized to treat these people as what they actually are: permanent residents.

According to ITEP executive director and report author Matt Gardner, most of the additional wage gains would come from “just more people being incorporated into the system and having income tax withheld from their paychecks who aren’t having that income tax withheld right now.” But legalization would also bring a more positive long-term personal ripple effect: They will earn more, with a wage boost of some 10 percent under full legalization.

For many low-wage undocumented workers, Gardner says, “currently undocumented families will earn more once they’re incorporated into the system. That obviously means they’re going to pay more taxes in their income, they’re going to spend more, they’re going to pay more sales taxes on their spending.”

Read more from The Nation.