Undocumented Immigrants' State and Local Tax Contributions

New data on unauthorized immigrants as taxpayers demonstrate how some immigration reform policies will affect tax revenue for state and local governments.

Drawing data from the Migration Policy Institute and the Pew Research Center, this report discusses the consequences of two policy reforms: President Obama's executive action to grant work authorization and relief from deportation to almost half of the unauthorized population, up to 5.2 million people, and the effects of implementing a path to legalization for all 11.4 million unauthorized immigrants. The authors report that unauthorized immigrants already make impressive tax contributions: their estimated nationwide average state and local tax rate, which is the share of total income paid in taxes, is 8 percent which is higher than the wealthiest 1 percent of taxpayers, whose effective tax rate is 5.4 percent. Paying an estimated $11.84 billion in state and local taxes, unauthorized immigrants contribute their share mostly through payroll and income taxes, property tax and sales tax. According to Undocumented Immigrants' State and Local Tax Contributions, if all of the undocumented immigrants were granted lawful permanent residence and allowed to work legally, their state and local tax contributions would increase by more than $2.2 billion per year.  The report includes tables showing current and projected state and local tax contributions by undocumented immigrants for all 50 states. (Jamie Cross for The ILC Public Education Institute)

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Get more information at Institute on Taxation and Economic Policy.

Report File: 

undocumentedtaxes2015.pdf