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June 2007
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Immigrants and Taxes

Barbara Ehrenreich’s blog is always a good poverty read; for those of you not familiar with her work, she is the author of Nickel and Dimed: On (Not) Getting by in America and other fascinating books on the state of the American working class. Her post today caught my eye, as it dealt with immigrant issues related to taxes and public benefits. Among the valuable information she cited was a small quote from a larger fact sheet by the San Diego ACLU. The information on the ACLU website is so compelling that I wanted to repost it in its entirety here. [Quoted from here.]

  • The nation’s 34 million immigrants collectively pay more in taxes than they consume in public services and benefits, according to a National Research Council study. Washington Post, April 15, 2006
  • Undocumented immigrants annually pay an estimated $7 billion more than they take out into Social Security, and $1.5 billion more into Medicare. (New York Times, April 15, 2005.) A study by the National Academy of Sciences also found that tax payments generated by immigrants outweighed any costs associated with services used by immigrants.
  • All consumers, including the undocumented, pay state sales and consumption taxes when making purchases. Additionally, whether they own their own home or taxes are passed through to rents, everyone pays the same real estate taxes. The majority of state and local costs of schooling and other services are funded by these taxes.
  • The Social Security Administration has estimated that three quarters of undocumented immigrants pay payroll taxes, and they annually contribute $8.5 billion in Social Security funds that they will be unable to claim.
  • The Internal Revenue Service issues ‘Taxpayer Identification Numbers’ (ITIN) to allow undocumented workers to pay income taxes. Since 1996, 9.2 million of these numbers have been assigned. In 2005 alone, 1.2 million people paid taxes using this number. (Los Angeles Times, April 16, 2006.) At congressional hearings in July 2006, the commissioner of the IRS testified that between 1996 and 2003, undocumented immigrants paid almost $50 billion in federal taxes.
  • According to the National Association of Hispanic Real Estate Professionals, ITINs and conventional mortgages taken out by undocumented workers could be worth as much as $60 billion over the next five years; that is, immigrants also pay property taxes. Business Week, July 13, 2005

Food for thought.