Immigration Reform 2015: Undocumented Immigrants Contribute to US Economy by $12 Billion in Taxes, latest update

Republicans and other people who are opposed to immigration reforms claim that they are a burden on the national economy and its resources. But latest reports suggest that undocumented immigrants paid as much as $12 billion dollars as taxes at state and national level. This is a huge amount and shows that the 11.4 million undocumented immigrants are actually contributing as much to national resources as any other group of people in the US.

A latest study has concluded after studying their tax behavior that undocumented immigrants are expected to pay much bigger sum to local and state taxes if and when they are given lawful permanent residence in the US.

The study was conducted by very respected Institute on Taxation and Economic Policy in Washington. The study concluded after thorough analysis that average effective state and local tax rate by undocumented immigrants in 2012 was estimated at 8 percent, higher than the 5.4 percent effective tax rate by the top 1 percent of taxpayers.

In some state the total tax paid by undocumented immigrants was in billions of dollars. It was highest in California where they paid as much as $3.26 billion in taxes.

In the meantime, the study says, “Granting lawful permanent residence to all 11.4 million undocumented immigrants and allowing them to work in the United States legally would increase their state and local tax contributions by an estimated $2.2 billion a year…Their nationwide effective state and local tax rate would increase to 8.7 percent, which would align their tax contributions with economically similar documented taxpayers.”

The study also says that Obama executive order and comprehensive immigration reform would have increased tax contribution by undocumented immigrants by several folds. “It would also raise the effective state and local tax rate for this population from 8.1 to 8.7 percent, but the state and local revenue gain is smaller under the executive actions because fewer undocumented immigrants are affected (around 45 percent of the total) and the actions do not grant a full pathway to lawful permanent residence”, the study said.