Because of the too-often polarizing debate about immigration reform, the real economic contributions that immigrants make are often overlooked. Studies from many nonpartisan sources (the Pew Research Center, USDA, United States Department of Labor, and leading economists and researchers) have shown that undocumented immigrants are important to the U.S. economy, and vital to certain economic segments like agriculture.
The Institute on Taxation and Economic Policy (ITEP) report key findings show that undocumented immigrants contribute significantly to state and local taxes, collectively paying an estimated $11.64 billion a year. Nationwide, undocumented immigrants pay on average an estimated 8 percent of their incomes in state and local taxes (this is their effective state and local tax rate). To put this in perspective, the top 1 percent of taxpayers pay an average nationwide effective tax rate of just 5.4 percent.
The study also finds that granting legal status to all undocumented immigrants in the United States as part of a comprehensive immigration reform and allowing them to work legally would increase their state and local tax contributions by an estimated $2.1 billion a year. Their nationwide effective state and local tax rate would increase to 8.6 percent. If President Obama's executive actions on immigration are allowed to be fully implemented, ITEP calculates that up to 5.2 million undocumented immigrants could be granted relief, and would cumulatively contribute an estimated $805 million per year in state and local taxes.