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Undocumented Immigrants Pay Billions in Taxes & Many Pay More Than Millionaires Says Report

A new report from the Institute on Taxation and Economic Policy refutes the notion that undocumented immigrants don't pay taxes. According to the study by the non-partisan economic research organization, undocumented immigrants pay significant amounts of taxes. In fact they pay a higher percentage of their income in these taxes than many wealthy Americans. According to the report:

Undocumented immigrants contribute significantly to state and local taxes, collectively paying an estimated $11.84 billion in 2012. Contributions range from less than $3.2 million in Montana with an estimated undocumented population of 6,000 to more than $3.2 billion in California, home to more than 3.1 million undocumented immigrants. Undocumented immigrants’ nationwide average effective state and local tax rate (the share of income they pay in state and local taxes) in 2012 is an estimated 8 percent. To put this in perspective, the top 1 percent of taxpayers pay an average nationwide effective tax rate of just 5.4 percent.
The report, Undocumented Immigrants' State and Local Tax Contributions, says that if the 11 million undocumented immigrants in the United States were granted work authorization it would increase "state and local tax contributions by an estimated $2.2 billion a year." The percentage the newly work authorized were paying in state and local taxes would rise to 8.7 percent, "which would align their tax contributions with economically similar documented taxpayers," according to the report. Even President Obama's limited executive actions on immigration would increase the contribution of currently undocumented immigrants to the local and state tax revenues by nearly 900 million dollars per year.
The wages of newly legalized immigrants will likely increase as well following legalization. The average wage boost is likely to be around 12%, according to the Congressional Budget Office. The report's authors use a more conservative estimate of a 10% increase. With more money to spend, immigrants will pay more in sales taxes, a major source of state and county revenues.
Undocumented immigrants in New York State paid an estimated $1.1 billion in state and local taxes. Once administrative relief is fully in place, the state is expected to receive an additional $86 million.
New York governments received more in taxes from undocumented immigrants than those in any other state except for California and Texas. New York's undocumented immigrants paid more than $566 million in sales taxes, $186 million in state and local income taxes, and $342 million in property taxes. The effective state and local tax rate for undocumented New Yorkers is currently 8.8%.




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