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Immigrants and Taxes: Contributing, Not Collecting
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Immigrants and Taxes: Contributing, Not Collecting

May 17, 2010, 11:20 am
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Immigrants and Taxes: Contributing, Not Collecting
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Immigrants and Taxes: Contributing, Not Collecting
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New York - May 17, 2010 -- America’s economy is flailing, and 78 million baby boomers are nearing  retirement, at which point they will leave the workforce to receive massive  amounts of Social Security Administration (SSA) benefits. In a time of major  economic downturn, the unlikely “saving grace” is the immigrant population,  which pays into the Social Security system without collecting benefits.

Undocumented immigrants in the U.S. comprise approximately 5 percent of the  workforce. Contrary to popular belief, between one-half and three-quarters of  undocumented immigrants pay federal and state income taxes, Social Security and Medicare taxes – in addition to sales and property taxes. As of October  2005, the SSA concluded that undocumented immigrants contributed an  estimated $520 billion to the Social Security system – a figure that would increase exponentially if all of these immigrants were required to earn their legal status and contribute their share.

Despite the absence of progressive immigration policy reform, the tax contributions of immigrants are very evident. Even at the state level, undocumented immigrants still pay more in taxes than they use in public services.

  • The Texas State Comptroller determined in a 2006 study that undocumented immigrants produced $1.58 billion in state revenues, exceeding the $1.16 billion they received in state services.
  • The Oregon Center for Public Policy in 2007 estimated that undocumented immigrants pay state income, excise, property taxes, federal Social Security and Medicare taxes totaling between “$134 million  to $187 million annually.” Meanwhile, Oregon employers paid an  estimated $97 million to $136 million annually on behalf of their undocumented workers.
  • The Iowa Policy Project determined that “undocumented immigrants pay an estimated aggregate amount of $40 million to $62 million in state taxes each year.” Immigrants also make tax contributions through their enormous purchasing power. In a 2002 study by the Center for Urban Economic Development at the University of Chicago, researchers found that undocumented immigrants in the Chicago metro area spent $2.81 billion in 2001 – spending which “sustained 31,908 jobs in the local economy.”

As the baby boomers creep towards retirement and begin to strain the SSA, immigrants will be subsidizing Social Security benefits, making retirement possible for millions of Americans. By requiring the undocumented to come out  of the shadows and earn legal status, immigrants will not only contribute by  paying taxes, but will play a hefty role in shoring up the teetering Social Security  system, and provide a fiscal windfall to U.S. taxpayers.


This article was published with the permission of AILA  (American Immigration Lawyers Association) AILA Doc. No. 08071666.

For more information on immigration policies, visit

Author: Editorial Staff
Our staff consists of writers living in various parts of the U.S. as well as from Brazil and Portugal. If you would like to become a contributing journalist please send us an e-mail to
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Immigrants and Taxes: Contributing, Not Collecting
Immigrants and Taxes: Contributing, Not Collecting
Monday 17 May 2010

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