Photo: Tax Forms
Death and taxes, according to Benjamin Franklin, are the only things in life that are certain. And despite the prevailing myth perpetrated by nativist groups, there are plenty of undocumented immigrants facing the certainty of taxes on April 15. They pay billions in state and local taxes every year that help to fund benefits they are often unable to receive. Tax Day is a good reminder that if the House passed legislation to create a path to citizenship for undocumented immigrants, then it would increase the amount being paid in taxes each year while also creating a more fair system for immigrants.
One way that undocumented immigrants already pay taxes is through the day-to-day taxes of living in this country. According to the Institute on Taxation and Economic Policy (ITEP), undocumented immigrants paid an estimated $9.4 billion in the state property and sales taxes that fund schools, police and fire stations, roads, and public services within each state. Everyone who lives in or visits our country pays these taxes when they fill up their gas tank and buy items like a car, house, or clothes.
As people who have filed taxes know very well, income taxes require reporting income. Payroll taxes are what employers are required to pay on their employees (such as Social Security and Medicare contributions). Undocumented immigrants, and many other people who don’t have Social Security numbers, report income through their Individual Tax Identification Number (ITIN). Both state and federal governments receive taxes on undocumented immigrant’s income and employment. ITEP estimates that “at least half” of undocumented immigrants pay state income taxes even though they lack legal status—an amount that totaled $1.24 billion in 2010. The Center for American Progress (CAP) estimates that “one-third of unauthorized immigrants working in the formal economy” pay more than $13 billion in payroll taxes.
What is true of both income and payroll taxes is that if Congress passed immigration reform, these numbers would only increase. ITEP’s numbers estimate that state income taxes would rise to $2.8 billion if immigration reform and CAP argues that reform would add $109 billion in combined federal, state, and local taxes over a ten year period. Legal status would “provide a net contribution” to the Medicare trust fund “for the next three decades,” totaling an estimated $155 billion. Social Security’s trust fund would increase as well, to $606 billion. That number, as CAP points out, “is enough money to fund the retirement benefits of 2.4 million native-born Americans.”
These numbers are part of the reason why CBO scores for both HR 15 and S. 744 have shown such benefits for the U.S. economy. The Senate has already passed comprehensive immigration reform. If the House does as well, then the U.S. could have a working immigration system and more money in the public treasury on Tax Days to come.