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Tax Day: Tax Contributions of Immigrants in the United States

Today is Tax Day—the widely dreaded annual deadline for filing federal income taxes. This year, it falls on the same day that the Supreme Court is scheduled to hear oral arguments in the U.S. v Texas immigration case about President Obama’s executive actions to expand Deferred Action for Childhood Arrivals (DACA+) and the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program.

Today is, therefore, an especially good time to remember the significant tax contributions of immigrants living in the United States. While immigrants are sometimes perceived as a drain on social services, research shows that through their tax payments, they are instead net supporters of these services.

PNAE’s 2014 “The Power of the Purse” report, for example, highlights the important economic role that native and foreign-born Hispanics play as consumers and taxpayers. The report finds that, in 2013, foreign-born Hispanics contributed over $86 billion in national tax revenues, including around $32 billion in state and local taxes. The report also highlights the key role that Hispanic (both native and foreign-born) households play in supporting U.S. entitlement programs, like Social Security and Medicare. For example, Hispanic immigrants contributed over $46 billion to Social Security and more than $10 billion to Medicare.

Meanwhile, PNAE’s “Staying Covered” report found that between 1996 and 2011, the overall immigrant population in the United States contributed $182.4 billion to the Medicare trust fund—a surplus that contrasts sharply with the $68.6 billion net deficit generated by the U.S.-born population over the same period.

PNAE has also recently released a series of research briefs that highlight, among other things, the tax contributions of immigrants in cities and counties across the United States including Denver, Cincinnati, and Salt Lake County.

Finally, a recent study by the Institute on Taxation and Economic Policy (ITEP) highlighted the tax contributions of undocumented immigrants. The report found that, at the state and local level alone, the country’s undocumented immigrant population pays around $11.64 billion in taxes each year. According to the study, this contribution would increase to the tune of $2.1 billion each year if the 11 million undocumented immigrants currently living in the United States were granted legal status.

This Tax Day, therefore, let’s set the record straight and acknowledge the important role that immigrants—both legal and undocumented—play as consumers, taxpayers, and net contributors to America’s social services.

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