Report: Undocumented NJ Immigrants Pay Nearly $500M in State and Local Taxes

Immigration400Undocumented immigrants living in New Jersey pay nearly $500 million in state and local taxes, and would pay an additional $81 million more if they are granted legal status under a proposed overhaul of the nation’s immigration system, according to a new report from a Washington, D.C. nonprofit.

The Institute on Taxation and Economic Policy (ITEP) says in the report that immigrants here illegally pay more than $10 billion nationwide in taxes, an amount that would increase by roughly $2 billion under the immigration bill that has passed the Democratic-controlled U.S. Senate but is now stalled in the Republican-led House.

“Contrary to a lot of the rhetoric we’re hearing on Capitol Hill right now, undocumented immigrants are far from being a drain on public finances,” said Matthew Gardner, the group’s executive director.

Source: ITEP

Source: ITEP

In fact, the roughly 550,000 undocumented immigrants in New Jersey contribute $476,352,000 in state and local taxes, the report says.

ITEP wrote the report using estimated undocumented immigrant populations and the estimated effective tax rates of low- and moderate-income families in each state. It also used research completed after the 1986 overhaul of the nation’s immigration laws that showed wage increases between 6 and 15 percent for newly legal immigrants.

The Congressional Budget Office estimates that wages for currently undocumented immigrants would raise 12 percent if the Senate bill becomes law.

The bill would offer a 13-year path to citizenship for the estimated 11 million immigrants here illegally, an element that irks House Republicans who label the move “amnesty.” It would also raise ceilings on how many immigrants could come from any one country.

House Speaker John Boehner, of Ohio, said this week he will not allow the Senate bill to be voted on in the House, which he said is working on its own immigration bill.

Gordon MacInnes, president of liberal think tank New Jersey Policy Perspective, said he doesn’t know if the new report on the bill’s effect on local, state and federal taxes will have any impact on House Republican opposition to granting legal status to undocumented immigrants.

“I don’t know what moves Republicans in the House,” said MacInnes, whose group co-released the report with the Institute on Taxation and Economic Policy.

NJ-GraphicTemplateMacInnes said the report puts to rest any notion that immigrants enter the country illegally “to raid the treasury.”

“Basically, they are here to work,” he said.

Undocumented immigrants in New Jersey would pay an additional $17.9 million in sales tax; $4.7 million extra in property taxes; and a whopping $58.6 million more in incomes taxes if President Obama signs the Senate bill into law, the report says.

Meanwhile, undocumented immigrants’ effective tax rate would rise from 5.1 percent to 5.4 percent in New Jersey if the bill becomes law, according to the report.

“There would be a much broader benefit than some people realize,” MacInnes said.

According to Gardner, because so many immigrants who are in the country illegally live in the shadows, it’s hard to know their precise tax contribution.

“But that contribution is certainly far from zero,” he said.


Terrence McDonald is a reporter for the Jersey Journal and a founding member of The Immigration Project. Photo of “We Work for America” via Flickr.


For more coverage of this report, see also:

Report: Immigration Reform Could Boost NJ Tax Revenues by $80M Yearly NJ Spotlight*

New Report Says Immigration Reform Would Boost State Tax Revenue WBGO News

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One response to “Report: Undocumented NJ Immigrants Pay Nearly $500M in State and Local Taxes”

  1. That’s about $860 a person, annually.
    That’s not very much, and far far below the state average, and money doesn’t only go one way. Money in sales tax, ok…money out schools, hospitals, law enforcement, social services, ect.
    To put it in perspective, from New Jersey residents the state collects $5700 per person, as is.

    I don’t think the issue is that they are bad lazy good for nothing moochers , it’s just that it’s a massive influx of low income low education people into a population that was already playing catch up to take care of its existing low income population.