What's the Truth about Immigrants, Benefits, and Taxes?

Immigrants, including the undocumented, pay taxes

In 2003, over 90 percent of undocumented men worked—a rate higher than that for U.S. citizens or legal immigrants.{1} Immigrants, including undocumented immigrants, pay the same taxes as people born in the US do — sales taxes, property taxes, PICA, and income taxes.

A study in Oregon estimated that undocumented immigrants pay state income, excise, and property taxes, as well as federal Social Security and Medicare taxes, of "about $134 million to $187 million annually." In addition, Oregon employers paid about $97 million to $136 million annually on behalf of undocumented workers.{2}

An Iowa study found that undocumented immigrants pay $40 million to $62 million in state taxes each year, and they and their employers also pay an estimated $50 million to $77.8 million in federal Social Security and Medicare taxes.{3}

A study of the metropolitan Washington, DC area found that immigrant households paid almost $10 billion in taxes in 1999-2000, and they paid taxes roughly in proportion to their share of the overall population.{4}

The Social Security Administration (SSA) estimates that three quarters of undocumented immigrants pay payroll taxes. In the 1990's alone, the SSA collected $189 billion worth of wages from people with incorrect social security numbers. It is assumed that undocumented immigrants paid most of these taxes, but they do not qualify for social security benefits.{5}

Immigrants who pay taxes are still denied access to public benefits

Undocumented immigrants are not eligible for federal public benefits, such as income supplements (e.g., Social Security, Supplemental Security Income (SSI), and Temporary Assistance for Needy Families (TANF)), health care (Medicaid and Medicare), and food stamps.{6} Most documented immigrants cannot receive federal Medicaid, TANF, food stamps, or SSI during their first five years or longer in the U.S., regardless of how much they have worked or paid in taxes.

1. Urban Institute, "Undocumented Immigrants: Facts and Figures," 2004.
2. Oregon Center for Public Policy, "Undocumented Workers Are Taxpayers, Too," April 2007.
3. Iowa Policy Project, "Undocumented Immigrants in Iowa: Estimated Tax Contributions and Fiscal Impact," October 2007.
4. Urban Institute, Pew Hispanic Center, Migration Policy Institute, "Civic Contributions: Taxes Paid by Immigrants in the Washington, DC, Metropolitan Area, May 2006.
5. NY Times, "Illegal Immigrants Are Bolstering Social Security with Billions," April 5, 2005.
6. National Immigration Law Center.