How much do undocumented immigrants cost tax payers a year
Executive summary
Estimates of the annual fiscal cost of undocumented immigrants to U.S. taxpayers vary dramatically depending on methodology and scope: conservative advocacy groups like FAIR place the annual net cost at roughly $151 billion (about $1,156 per U.S. taxpayer), while academic and policy analyses emphasize large tax contributions and long‑run fiscal benefits that complicate a simple “cost” number (ITEP finds substantial state and local tax payments; Cato finds immigrants have generated a long‑run fiscal surplus) [1] [2] [3] [4] [5].
1. What the headline numbers say: $151 billion versus other tallies
A frequently cited headline figure comes from FAIR and related outlets asserting that illegal immigration imposes at least $150.7–$151 billion in net annual costs on federal, state and local budgets and translates to roughly $1,156 per American taxpayer (or about $957 after accounting for taxes paid by undocumented immigrants) [1] [3] [2]. Other organizations and studies produce much lower or higher numbers depending on which programs are counted, whether children born in the U.S. to undocumented parents are included, and whether short‑term emergency spending or projected long‑term lifetimes costs are emphasized [1] [6].
2. Tax payments and fiscal contributions: a countervailing picture
Research focused on tax payments documents that undocumented immigrants are net contributors in many ways: the Institute on Taxation and Economic Policy (ITEP) estimates undocumented immigrants paid an average effective state and local tax rate of 8.9 percent and contributed sizable state and local revenues through sales, excise, property and payroll taxes [4]. More broadly, Cato’s long‑run analysis concludes immigrants generated a fiscal surplus of about $14.5 trillion from 1994–2023 and that, per person, immigrants often impose lower public‑service costs than U.S.‑born residents [5].
3. One‑time and policy‑dependent costs: detention, Medicaid, hospitals, and deportation
Specific spending categories drive much of the headline costs: state hospital and emergency care reporting in Texas tallied over $1 billion linked to undocumented immigrants in one fiscal year after new reporting rules [7], and analyses of expanded enforcement or mass deportation scenarios find enormous price tags—an American Immigration Council estimate suggests a program to arrest and remove one million people per year would cost at least $88 billion annually and approach nearly $1 trillion over time [8]. Congressional and advocacy materials also point to increased Medicaid and emergency care outlays tied to migration flows, though those tallies depend on program rules and whether paroled or temporarily protected migrants are included [9] [8].
4. Why estimates diverge: scope, time horizon, and who counts
Differences in annual cost estimates stem from choices about inclusion—whether to count only direct public benefits (e.g., welfare, Medicaid), emergency care, K‑12 education for U.S.‑born children of undocumented parents, or the broader lifetime fiscal impact of new arrivals—and from whether tax payments and economic spillovers are netted against spending [1] [6] [4]. Advocacy groups such as FAIR and FAIR‑aligned congressional offices emphasize current budgetary outlays and emergency costs [1] [3], whereas think tanks such as Cato or tax researchers like ITEP highlight tax contributions and long‑term fiscal effects [5] [4].
5. What can be stated with confidence and what remains contested
It is demonstrable that undocumented immigrants both impose identifiable public costs in particular areas (emergency medical care, some education and local services) and pay substantial taxes at state and local levels [7] [4]. It is also clear that methodological framing—short‑term budgetary spending versus lifetime fiscal accounting, inclusion of second‑generation impacts, and policy choices about deportation or legalization—produces very different annual “cost” figures, which explains why credible sources offer numbers that range from single‑digit billions to hundreds of billions annually [8] [1] [6].
6. Bottom line
There is no single, uncontested annual dollar figure that captures “how much undocumented immigrants cost taxpayers a year”; prominent recent public estimates cluster around $150 billion annually when counting current outlays emphasized by groups like FAIR (about $1,156 per U.S. taxpayer), while tax‑incidence studies and long‑run models show substantial tax contributions and even net fiscal surpluses over longer horizons—meaning any policy or public debate must start by defining the time frame and programs being measured [1] [3] [4] [5].