Fact check: What is the estimated annual cost of illegal immigration to US taxpayers?

1. Why numbers diverge: methodology battles that change the bottom line

Different studies measure different things, which explains why estimates are not directly comparable: some compute short‑term net fiscal flows, others tally gross public spending or tax contributions, and a few model long‑run macroeconomic effects. The Congressional Budget Office produced a year‑specific, transaction‑level accounting for 2023 and reported a $9.2 billion direct net cost and an additional $19.3 billion in state and local spending, focusing on immediate outlays like education and shelter ^[1]. By contrast, the Heritage Foundation presents a broader annual “net fiscal cost” figure of about $110 billion that aggregates federal, state, and local impacts under different assumptions and implicitly emphasizes border policy effects ^[2]. These methodological choices — time horizon, units counted, demographic assumptions, and whether to offset costs with taxes paid or economic contributions — drive large variation in headline figures.

2. Taxes paid vs. services consumed: income to the treasury that complicates "cost" claims

Researchers tracking tax payments find substantial tax contributions by undocumented residents, which reduce net fiscal burdens if credited against spending. The Institute on Taxation and Economic Policy estimated undocumented people paid about $97 billion in federal, state, and local taxes in 2022, including significant Social Security contributions that often do not translate into immediate benefits ^[3]. The American Immigration Council reported $89.8 billion in taxes and estimated $299 billion in spending power for undocumented households in 2023, framing immigration as a fiscal and economic input rather than only a cost ^[4]. Counting these revenues matters: studies that omit or undercount tax contributions will show higher net costs; studies that count long‑term entitlement use may show different net profiles.

3. Short‑term surge costs versus long‑term fiscal dynamics — which matters more?

Recent years’ migration surges produced large, concentrated short‑term fiscal demands — education, emergency shelter, and border security — that drove the CBO’s 2023 net cost figures for federal and state/local governments ^[1]. Policy‑simulation work, like the Penn Wharton Budget Model, emphasizes that drastic policy shifts (for example, mass deportation) would carry massive fiscal consequences in the opposite direction, raising primary deficits by hundreds of billions over multi‑year windows because removal reduces tax bases and increases transition costs ^[5]. These modeling results show the fiscal story is dynamic: short‑run costs from surges can be large, while long‑run assimilation, labor market effects, and retirement program contributions can change net balances over decades.

4. Who's reporting these numbers and what are the likely agendas?

The studies cited come from institutions with identifiable perspectives: the CBO is a nonpartisan budget office offering transaction‑based estimates for a specific year ^[1]; the Heritage Foundation is a conservative think tank that frames immigration costs as a policy failure and emphasizes border management ^[2]; ITEP and the American Immigration Council report sizable tax payments and economic contributions and tend to highlight fiscal offsets and benefits ^{[3] [4]}; Penn Wharton models fiscal outcomes of hypothetical deportation policies and highlights macroeconomic tradeoffs ^[5]. Each organization’s method choices and policy framing influence headline numbers, so treating every single figure as definitive is misleading.

5. What the range of credible, recent estimates actually looks like

Putting the major recent findings side by side produces a practical range rather than a single figure: transaction‑level accounting for the 2023 surge shows roughly $9–28.5 billion in combined federal + state/local net costs when adding the CBO’s direct and state/local figures ^[1]; tax‑revenue tallies show $89.8–97 billion in taxes paid annually ^{[4] [3]}; advocacy‑driven net estimates can claim ~$110 billion or more depending on inclusions ^[2]. The appropriate interpretation depends on whether one prioritizes immediate budgetary impacts, long‑term fiscal balance, or broader economic contributions.

6. What’s missing from many public comparisons — demographic and economic offsets

Many headline calculations omit crucial factors that change fiscal math: the age structure of undocumented populations (younger workers generate payroll taxes but use fewer elderly benefits), undocumented contributions to GDP and consumption, and the shadow economy effects that alter reported tax bases. Studies that model deportation scenarios underscore how removing workers shrinks tax receipts and raises deficits ^[5], while studies emphasizing tax payments show sizable offsets to public spending ^{[3] [4]}. Without consistent treatment of these dynamics, cross‑study comparisons will continue to produce wide, contested ranges.

7. Bottom line for readers: interpret estimates as conditional, not definitive

There is no single agreed “annual cost” of illegal immigration; recent credible estimates depend on framing: the CBO gives a narrowly defined 2023 net cost of about $9.2 billion plus $19.3 billion in state/local spending, while other analysts highlight tax contributions of $90–97 billion or headline net claims near $110 billion depending on scope ^{[1] [3] [2] [4]}. Policymakers and the public should evaluate these numbers by asking which costs and revenues are included, the time horizon used, and the likely policy agenda of the producing organization; that context, more than any single number