Do Illegal Immigrants Really Pay “$10 Billion” A Year In Taxes?
Authored by: Matt Palumbo
Are illegal immigrant laborers putting money into the pot just like the rest of us? That’s what a number of pundits on the left have claimed, usually with a figure in the range of $10-12 billion a year.
- PolitiFact rated the statement “Undocumented immigrants pay $12 billion of taxes every single year” from María Teresa Kumar of “Vote Latina” true – even though the “$12 billion” figure was based off of payroll taxes, half of which is paid by the employer. On the other hand, her estimate didn’t include state and local taxes.
- A 2016 study by the non-partisan Institute on Taxation & Economic Policy, undocumented immigrants paid $11.64 billion in state and local taxes in 2013.
So there appears to be some truth to the claim, but first let’s answer the lingering question of how the heck illegal immigrants are paying taxes in the first place.
That’s where the “Individual Taxpayer Identification Number” comes in. The IRS issues ITINs to individuals that must file taxes, but either don’t have or are ineligible for a Social Security number. ITIN’s are issued regardless of immigration status. Of an estimated illegal immigrant workforce of 8 million, 3.4 million, or less than half, are registered with ITINs and are paying taxes. So the majority are not.
And of those who do, let’s take that $12 billion figure at face value and put it in perspective. In 2017, the Federal government spent $4 trillion, or 10.95 billion per day. The entirety of the nation’s taxpaying illegals don’t even pay enough in taxes to cover what the federal government spends in a day (because the 12 billion figure includes taxes paid to state and local governments).
And this is from eight million workers. The American labor force had roughly 160 million workers in 2017. Just for the sake of a thought experiment, if we were to replace the entire labor force with illegal immigrants, and have them pay all their state and local taxes to the feds, the Federal government would’ve collected approximately $240 billion in tax revenue in 2017, as opposed to the $3.3 trillion that the Federal government actually collected in 2017.
And seldom do those pointing out that illegals pay taxes mention how much they take from the pot.
- Because illegals displace legal American employment (100% of which would be paying taxes – and likely at higher wages), illegal immigrants impose a $30 billion annual cost in lost tax revenue.
- Because of pressure on wages, illegal immigrants are costing American workers $118 billion annually in lost wages.
- the Federation for American Immigration Reform (FAIR) finds the net cost of illegal immigration (i.e. net of taxes paid by illegals) to be $116 billion. This is particularly noteable, because they assume that illegals pay $19 billion annually in taxes – far more than our liberal friends typically claim.
- The conservative Heritage Foundation’s study on the same subject finds a comparatively lower $55 billion net cost to American taxpayers.
- Health care costs for illegal immigrants alone total nearly $20 billion, or almost double what they pay in taxes, according to American Enterprise Institute scholar Chris Conover.
So yes, we are getting about $12 billion a year in tax revenue from illegals.
Problem is, it just costs a heck of a lot more than $12 billion to collect it.