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How do tax contributions from undocumented immigrants compare to the public services they use?
Executive summary
Recent analyses conclude undocumented immigrants pay substantial taxes — roughly $96–97 billion nationally in 2022 and about $89.8 billion for “households led by undocumented immigrants” in 2023 — with federal contributions reported at about $59.4 billion and state/local near $37.3 billion (ITEP; American Immigration Council) [1] [2]. Multiple groups argue these tax contributions exceed the direct costs of public services used by immigrants, though estimates and emphases vary by methodology and by which costs are counted [3] [4].
1. How much do undocumented immigrants pay — headline numbers
The Institute on Taxation and Economic Policy (ITEP) estimates that roughly 10.9 million undocumented immigrants paid $96.7 billion in federal, state and local taxes in 2022 — about $8,889 per person or $8.9 billion per 1 million people — with $59.4 billion to the federal government and $37.3 billion to state and local governments [1] [5] [6]. The American Immigration Council reports households led by undocumented immigrants paid $89.8 billion in total taxes in 2023, splitting roughly $55.8 billion federal and $33.9 billion state/local in that year’s accounting [2] [4].
2. What types of taxes are included — payroll, income, sales and property
Analyses count a mix of federal income taxes, payroll taxes (Social Security and Medicare), state and local income, sales/excise taxes, and property taxes (often captured via rent or homeownership). ITEP’s breakdown notes payments such as $25.7 billion to Social Security, $6.4 billion to Medicare, and $1.8 billion to unemployment insurance in 2022, while state/local totals lean heavily on sales and excise taxes [5] [1].
3. Do undocumented immigrants receive equivalent public benefits?
Reporters and analysts point out an asymmetry: many undocumented immigrants pay into programs (including Social Security) while being ineligible for corresponding benefits, meaning some payroll-tax dollars fund programs they cannot access [1] [7]. Organizations such as the American Immigration Council and ITEP emphasize that these tax payments support public services even as many undocumented people remain excluded from certain programs [2] [8].
4. Net fiscal impact — consensus and disagreement
Several advocacy and research groups conclude that immigrants’ fiscal contributions exceed their use of public services. The American Immigration Council and summarizing outlets report that immigrants’ contributions are “much greater than the cost of the public services they use,” citing wider immigrant economic impact studies [4] [3]. However, full consensus is limited because net fiscal calculations depend on which services are counted (K–12 education, emergency healthcare, higher education, welfare eligibility), the time horizon (short-term vs. lifetime), and demographic factors such as age and family composition; available sources describe the conclusion but do not present a single universally accepted net-cost figure [3] [1].
5. State-level variation and distributional issues
Tax and cost impacts vary substantially by state. ITEP and related reporting show states like California, Texas and New York collect the largest absolute tax amounts from undocumented residents, and in some states undocumented residents pay a higher effective state/local tax rate than the top 1% of households [5] [6] [4]. Local revenues and service burdens are uneven: school-age children of undocumented parents, emergency health care use, and law enforcement costs are concentrated in certain localities, complicating simple national comparisons [8] [4].
6. Methodological caveats that shape conclusions
Major studies use different data sources (tax filings linked to ITINs, CPS/Census estimates, spending proxies) and assumptions about eligibility and service use. ITEP warns their approach may underestimate some tax contributions and highlights that legalizing undocumented workers would likely raise wages, compliance and tax revenue [1] [9]. Journalists and fact-checkers note caveats about year-to-year comparisons and the limits of available data when comparing immigrant tax totals to corporate tax payments or program expenditures [10] [7].
7. Political and policy context that affects behavior and revenues
Recent policy changes and enforcement actions can change the picture: reporting highlights that increased interior immigration enforcement and IRS-DHS data-sharing may discourage tax filing and reduce revenue, and projections estimate large revenue losses if mass deportations occurred [11] [12]. Advocacy groups stress that excluding contributors from benefits raises ethical and economic questions about fairness and program sustainability [2] [11].
Conclusion — what readers should take away: multiple, independent studies show undocumented immigrants pay tens of billions annually in taxes (roughly $90–97 billion in the cited work) and that many analysts conclude these payments exceed the direct costs of services they use; however, precise net fiscal impact varies by method, state, and which costs are counted, and recent policy shifts could materially change future tax compliance and revenue [1] [2] [3].