Tuesday, April 19, 2011

Undocumented Immigrants Paid $11.2 Billion In U.S. State And Local Taxes In 2010

The Institute for Taxation and Economic Policy study estimates billions of dollars in state and local taxes paid by undocumented immigrant households.

By H. Nelson Goodson
April 19, 2011

Washington, D.C. - On Monday, the Immigration Policy Center (IPC) reported estimates produced by the Institute for Taxation and Economic Policy (ITEP) for state and local taxes paid in 2010 by households that are headed by undocumented immigrants (UI's) in the country. The ITEP study shows that UI households paid a combined total of $11.2 billion in state and local taxes, which included $1.2 billion in personal income taxes, $1.6 billion in property taxes, and $8.4 billion in sales taxes.
The IPC press release says, that Tax Day is an appropriate time to underscore the often-overlooked fact that undocumented immigrants pay taxes. UI's, like everyone else in the United States, pay sales taxes. They also pay property taxes—even if they rent. At least half of undocumented immigrants pay income taxes. Add this all up and it amounts to billions in revenue to state and local governments.
These figures should be kept in mind as politicians and commentators continue with the seemingly endless debate over what to do with unauthorized immigrants already living in the United States. In spite of the fact that they lack legal status, these immigrants—and their family members—are adding value to the U.S. economy; not only as taxpayers, but as workers, consumers, and entrepreneurs as well, according to IPC.
Another underscored issue, at least half of UI's submit their tax forms to state and federal revenue departments by April 18, but the rest don't submit income tax returns. Thus adding to billions of dollars taken by employers through deductions of federal and state taxes in earned income. The state and federal revenue departments (IRS) aren't able to refund some of those over paid taxes in returns, because half of UI's in the country don't file tax returns. The unrefundable funds remained in suspended accounts and don't get reported to the U.S. Congressional Budget Office by states or the IRS.
Nonrefundable tax returns can be estimated since the 1986 Amnesty expired for those UI taxpayers who couldn't qualify and for the millions of new UI taxpayers that continued to flow into the U.S. searching for work and a better life. In the last 25 years, those estimates can reach up to more than $280 billion of state and local taxes paid by UI's. No doubt, states and local governments have benefited from the UI's generated taxes.
Today, U.S. Hispanics including undocumented immigrants have an ability to flex more than $800 billion to $1.5 trillion dollars in purchasing power by 2013 and can no doubt use it to influence immigration reform in the next several years.
U.S. Census officials reported, that 50.5 million Hispanics were counted in 2010, 16.3% of total U.S. population and a 43% growth since 2000.

Unauthorized Immigrants Pay Taxes, Too: Estimates of the State and Local Taxes Paid by Unauthorized Immigrant Households (IPC Special Report, April 18, 2011) link: http://bit.ly/eJgnY0

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