Are illegal immigrants not paying taxes and exploiting benefits?
Executive summary
Undocumented immigrants pay substantial taxes — researchers estimate roughly $96.7 billion in federal, state, and local taxes in 2022 — yet they are largely barred from collecting many federal social insurance benefits they help fund [1] [2] [3]. The simple political claim that they “don’t pay taxes and freely exploit benefits” does not match the data: they pay into the system but receive limited federal benefits, though they may use some public services at local levels [2] [3] [4].
1. Undocumented immigrants are taxpayers — large and measurable contributions
Multiple recent analyses find undocumented residents contribute tens of billions annually to public coffers: ITEP’s 2022 estimate places federal, state and local tax contributions at $96.7 billion, and other advocates’ tallies for 2023 are in the same ballpark (roughly $89–90 billion) — figures that include payroll, income, sales, property and excise taxes [1] [5] [6]. State-level breakouts show California, Texas and New York alone generate billions in revenue from undocumented residents, and ITEP notes tax payments would likely rise if work authorization were granted [5] [1].
2. They pay into social insurance programs they cannot generally claim
Analysts emphasize a glaring asymmetry: undocumented workers often have payroll taxes withheld and contribute to Social Security and Medicare funding, but are typically ineligible to collect benefits tied to those programs — a point underscored by the Tax Policy Center and ITEP, which flags roughly $33.9 billion of the 2022 tax total as funding social insurance programs those workers cannot access [3] [2]. That dynamic—paying into programs without receiving corresponding federal benefits—is central to the argument that undocumented immigrants are not “exploiting” the federal welfare system.
3. Use of local services and exceptions complicates the picture
While federal entitlements are largely off-limits, undocumented people still interact with local public services: children born in the U.S. receive public K–12 education, and undocumented residents access emergency medical care and other locally provided services in many jurisdictions, meaning communities shoulder some service costs even as they collect tax revenue from these households [4] [7]. Reporting and advocacy groups note that most undocumented households are of working age and contribute through consumption and payroll taxes, so their fiscal footprint is not limited to payroll withholding [6] [7].
4. “Net cost” debates and methodological limits
Claims about whether undocumented immigrants are a net fiscal drain depend on scope, timeframe, and methodology: some scholarly summaries argue unauthorized immigrants contribute more in taxes than they cost in services, while other partisan analyses emphasize enforcement and budgetary costs [7] [8]. Importantly, the ITEP study that provides the $96.7 billion figure explicitly does not attempt to quantify broader economic ripple effects or the full net fiscal impact over lifetimes, and state/local analyses vary in what costs they include, leaving room for differing conclusions [1].
5. Bottom line — direct answer to the claim
The assertion that undocumented immigrants “do not pay taxes and are exploiting benefits” is inaccurate as stated: they pay substantial federal, state and local taxes (estimated near $100 billion in 2022) and they actually fund programs—many of which they are legally barred from accessing [1] [2] [3]. That said, undocumented people can and do use some public services at local levels (for example K–12 schooling and emergency care), and rigorous assessments of net fiscal impact depend on which taxes and services are counted and over what horizon [4] [1] [7]. The truth is nuanced: taxpayers who cannot claim many federal benefits are contributing to the system even as communities absorb certain local service costs.