Undocumented, but not untaxed: How much immigrants pay

Posted: February 26, 2016

Immigrants living illegally in the United States paid $11.6 billion in state and local taxes in 2013, including $590 million collected in New Jersey, $139 million in Pennsylvania, and $12 million in Delaware, according to a study released Wednesday by the Institute on Taxation and Economic Policy.

The Washington research group said its 50-state analysis, which uses the most recent data available, was intended to inform the nation's vehement debate on immigration policy reform.

The report also examines the potential impact of President Obama's two executive actions on immigration, issued in 2012 and 2014. They wait to be implemented while the U.S. Supreme Court considers an appeal filed by the governors of 25 states, which is slated for argument before the end of June.

"Public debates over federal immigration reform often suffer from insufficient and inaccurate information," the authors of "Undocumented Immigrants' State & Local Tax Contributions" wrote. "The truth is that undocumented immigrants . . . pay billions" annually, and their total contributions would go up $805 million a year if Obama's executive actions were implemented, the report says.

The 24-page report tallied sales and excise taxes paid on utilities, clothing, gasoline, and other goods and services; property taxes paid by homeowners or indirectly by renters; and state income taxes.

It did not include federal income taxes, said Meg Wiehe, one of the report's three coauthors, "because there is a lack of good information about state and local tax contributions, and a wealth of information about federal taxes."

Nor does the report examine the cost of government services to undocumented immigrants.

Roy Beck, executive director of Numbers USA, took issue with the authors' choice not to take into account such expenditures. His Washington-based national group wants to reduce both legal and illegal immigration.

"I don't think there's ever been a contention from our side that illegal aliens don't pay taxes," he said. "The real issue is what is the net effect of the taxes they pay vs. what they take in services."

Beck pointed to a study he said shows the typical undocumented household pays $10,000 a year in taxes and consumes $30,000 in government services.

"It just seems rather ludicrous to suggest that illegal immigration is good for the country," he said, "unless you believe in open borders."

Undocumented immigrants "are contributing plenty," countered Jennifer Lee, legal director of the Sheller Center for Social Justice at Temple University's Beasley School of Law. She said the institute's report is "a great opportunity to recognize there is another narrative out there about immigrants, apart from the prevailing one we hear a lot in this presidential election year."

Obama's executive actions would grant work authorization and temporary relief from deportation to millions of eligible individuals who came to the U.S. as children, and to the eligible parents of children who are U.S. citizens or legal permanent residents.

The 2012 initiative - Deferred Action for Childhood Arrivals (DACA) - would grant relief to about 1.2 million people who were younger than 16 when they came unaccompanied or were brought here. The 2014 initiative - Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) - would allow an estimated 3.6 million parents to apply for relief. Together, the categories make up about 46 percent of the estimated 11 million people living in America without authorization.

The study based its estimates on six main data points: the size of each state's undocumented population; the percentage of that population who own homes; average family size; average income; the estimated number of immigrants who would be affected by the two executive actions; and the estimated effective tax rate (taxes as a share of income) paid by taxpayers at various income levels.

It reduced the estimated incomes 10 percent to account for the remittances that many immigrants send to families overseas.

"New Jersey is home to a diverse immigrant community," said Erika Nava, policy analyst at New Jersey Policy Perspective, which calls itself a "think-and-do tank" in Trenton. "This report is essential in busting the myth that undocumented New Jerseyans don't pay taxes or contribute to the state's economy."

Miriam Enriquez, director of immigrant affairs in Mayor Kenney's administration, said the report is a useful educational tool.

Founded in 1980, the institute is funded by private donations and foundation grants. Its 10-member board includes former U.S. Labor Secretary Robert Reich; Henry Coleman, a professor of public policy at Rutgers University; and Robert Kuttner, coeditor of the American Prospect, which calls itself a magazine of "liberal ideas."

mmatza@phillynews.com

215-854-2541@MichaelMatza1

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