FOR IMMEDIATE RELEASE
July 29, 2024
Contact: Kirstin Snow, snow@pennpolicy.org or Jon Whiten at ITEP, jon@itep.org or 917-655-3313
National Study: Undocumented Immigrants Contribute $523,100,000 in PA Taxes Per Year
Pennsylvania Policy Center Joins Institute on Taxation and Economic Policy on PA-Specific Release
Immigration policies have taken center stage in public debates this year, but much of the conversation has been driven by emotion, not data. A new, in-depth national study from the Institute on Taxation and Economic Policy (ITEP) aims to help change that by quantifying how much undocumented immigrants pay in taxes, both nationally and in each state.
Here in Pennsylvania, undocumented immigrants contributed $523,100,000 in state and local taxes in 2022 — a number that would have risen to $667,000,000 if these taxpayers had been granted work authorization, according to the study.
Other key findings:
- Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, $37.3 billion went to state and local governments.
- For every one million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue. On the flip side, for every one million undocumented immigrants who are deported, public services stand to lose $8.9 billion in tax revenue.
- Nationally, providing access to work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year to $136.9 billion.
- More than a third of the tax dollars paid by undocumented immigrants are toward payroll taxes dedicated to funding programs — like Social Security and Medicare — that these workers are barred from accessing.
- Similarly, income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens; as one example, they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. However, many states have made their versions of these credits more immigrant-inclusive in recent years.
- In PA and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders.
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP senior policy analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
In Pennsylvania, $183,600,000 of the tax contributions are through sales and excise taxes, while $139,600,000 are through property taxes, and $185,300,000 are through personal or business income taxes.
Marc Stier, executive director of the Pennsylvania Policy Center, said, “While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals. Taking those economic ripple effects into account would likely reveal undocumented immigrants to have an even larger significance to public revenues than is documented here.”
Patty Torres, co-deputy director of Make the Road Pennsylvania commented on the study, “This study is another reminder that undocumented immigrants are contributing to our economies and our shared public services, and that immigration policy choices made in the years ahead will have significant consequences for public revenues.” Make the Road Pennsylvania is a partner organization with CASA and the Pennsylvanians Together campaign of the Pennsylvania Policy Center.
“The value that immigrants offer to Pennsylvania is indispensable to the economy. According to ITEP, undocumented immigrants paid an average effective state and local tax of 8.9% toward funding infrastructure, services, and institutions in their home states like Pennsylvania, as measured relative to their incomes. This is juxtaposed by the most affluent taxpayers who pay just 7.2% in their home state,” said Daniel Alvalle, CASA’s Pennsylvania director. “More than that, immigrant families are part of our society, with everyone intertwined into one community: parents, teachers, children, custodians, healthcare workers, and so much more. Where we live is where we play and work. Our tax system should reflect the contributions that everyone makes, including immigrant workers.”
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