With the election cycle heating up, Immigration reform continues to be one of the most hotly debated topics between the two leading candidates Hillary Clinton and the Donald. A nonprofit group, The Institute on Taxation and Economic Policy (ITEP) is hoping to set public opinion straight on one area of undocumented immigrants and their contributions. According to a new updated report from ITEP, undocumented immigrants pay state and local taxes like any other American citizen. ITEP, The non-partisan research organization, updated its study, “Undocumented Immigrants’ State & Local Tax Contributions” and researchers found that undocumented immigrants in the US pay an estimated $11.64 billion in state and local taxes annually.
The new report shows that at least 50% of all undocumented immigrant households file income tax returns using Individual Tax Identification Numbers (ITINs), and many of those who don’t file returns still have taxes deducted from their paychecks. Of the $12 billion in state and local tax collections, it is estimated that roughly $6.9 billion comes from sales and excise taxes, $3.6 billion from property taxes and $1.1 billion from personal income taxes. On average, Undocumented Immigrants pay 8% of their incomes in state and local taxes, which is very substantial especially when compared to the top 1% of taxpayers who only pay an effective average tax rate of 5.4%, according to the report. Perhaps more noteworthy, the report found that if all undocumented immigrants where granted legal status, thus allowing them to work legally, their respective state and local tax contributions would increase by around $2.1 billion a year while their nationwide tax rate would increase to 8.6%. There are currently roughly 11 million undocumented immigrants living in the US.