Let’s focus on what undocumented immigrants give back to us all

There are many characteristics I would point to to describe my value to society, and my tax contributions would not be chief among them. 

Put another way, I’d place the total tax revenue I generate near the bottom of any list articulating my worth. That being said, in certain contexts, quantifying collective action in this way is helpful as it can offer a powerful counter-narrative. 

A counter-narrative is one that tells a story that contradicts a commonly held belief. Immigrants, and in particular those without a legal status (colloquially referred to as “undocumented” or worse, “illegal”), are almost exclusively talked about in terms of what they take. The insidious sentiment is that undocumented immigrants usurp. They are distinct from taxpayers. They use limited and valuable resources that would otherwise be available to native-born U.S. residents. 

All of this is untrue, however. And, moreover, leaves unanswered the question of what and how much undocumented immigrants give? 

Study says undocumented immigrants paid almost $100 billion in taxes

A recent study from the Institute on Taxation and Economic Policy (ITEP) presents estimations of the total federal, state and local tax contributions of the approximate 10.9 million undocumented immigrants in the U.S. as of 2022. The ITEP report found that undocumented immigrants paid $96.7 billion in taxes in 2022. (Important note: This figure only includes taxes collected from undocumented immigrants and therefore does not represent the more far-reaching positive impact of immigrants broadly on the U.S. economy).

Given that the bulk of the federal tax revenue undocumented immigrants generate was collected via income taxes, it is unsurprising that if work authorizations were granted to all currently undocumented immigrants in the U.S., their overall tax contributions would rise by $40.2 billion annually.

The labor force participation rate among undocumented immigrants in the U.S. is higher than the rate of the native-born population. Undocumented immigrants make up 4.7% of the workforce despite being only 3.4% of the overall population.

Many undocumented immigrants live in just six states — California, Texas, Florida, New York, New Jersey and Illinois — but Michigan remains home to an estimated 111,000 undocumented immigrants who contributed $290.1 million in 2022, a figure that would rise by $63.1 million if all were granted legal status.

Undocumented immigrants also pay taxes to states where they do not live by making taxable purchases when traveling or purchasing items from businesses based in another state.

A portion of the total $96.7 billion in federal, state and local taxes paid by undocumented immigrants — more than one-third in fact — funded government benefits that they are prohibited from receiving because of their immigration status. In other words, undocumented immigrants directly supported programs such as Social Security, Medicare and Unemployment Insurance, despite their exclusion.

Undocumented immigrants and the citizen members of their family are also frequently barred from receiving meaningful tax credits that would relieve their overall tax burden, such as federal and state earned income and child tax credits.

For example, Michigan’s EITC currently helps 740,000 households, but it could help thousands more if we joined the other 10 states, plus Washington, D.C., that have established state EITCs inclusive of those who file taxes with an Individual Taxpayer Identification Number (ITIN). Making this policy change would serve an estimated 5,650 ITIN-filing, Michigan families — including 7,500 children.

Immigrants with all types of statuses contribute to their communities and the economy in numerous ways, including through their spending, labor and taxes paid. However, the reach of some immigrants’ financial contributions are restrained by exclusionary policies and impediments to work authorization and legal status.

Our worth, individually and collectively, is so much greater than what can be deduced from the public revenue we generate — but it remains a valuable focal point if it illuminates the narrative that immigrants without a legal status fail to contribute to the nation’s fiscal health as the innumerate myth that it is.