PRESS RELEASE
July 31, 2024
FOR IMMEDIATE RELEASE
CONTACT: Sharon Kayne, Communications Director, NM Voices for Children
505-361-1288 (direct), skayne@nmvoices.org
OR: Jon Whiten at ITEP, jon@itep.org or 917-655-3313
Immigration policies have taken center stage in public debates this year, but much of the conversation has been driven by emotion, not data. A new in-depth national study from the Institute on Taxation and Economic Policy (ITEP), released yesterday, aims to help change that by quantifying how much undocumented immigrants pay in taxes – both nationally and in each state.
Here in New Mexico, undocumented immigrants contributed $153,800,000 in state and local taxes in 2022 – a number that would rise to $174,100,000 if these taxpayers were granted work authorization, according to the study.
Other key findings:
- Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, $37.3 billion went to state and local governments.
- For every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue. On the flip side, for every 1 million undocumented immigrants who are deported, public services stand to lose $8.9 billion in tax revenue.
- Nationally, providing access to work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year, to $136.9 billion.
- More than a third of the tax dollars paid by undocumented immigrants are toward payroll taxes dedicated to funding programs – like Social Security and Medicare – that these workers are barred from accessing.
- Similarly, income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens; as one example, they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. However, many states – including New Mexico – have made their versions of these credits more immigrant-inclusive in recent years.
- In New Mexico and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1% of households living within their borders.
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP Senior Policy Analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
In New Mexico, more than 66% of the tax contributions are through sales and excise taxes, while 25% are through property taxes, and 2.4% are through personal or business income taxes.
“Immigrants make many extraordinary contributions to our communities and state, including the vital taxes that fund public services and infrastructure, enhancing the quality of all our lives,” said Gabrielle Uballez, executive director of New Mexico Voices for Children.
While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it does not attempt to quantify broader impacts resulting from the increased economic activity they generate. Considering these economic ripple effects would likely reveal undocumented immigrants contribute even more significantly to public revenues than the study currently indicates.
This study is a reminder that undocumented immigrants contribute to our economies and our shared public services and underscores that future immigration policy decisions will significantly impact public revenues.
ITEP’s full report, “Tax Payments by Undocumented Immigrants,” is available for download at https://itep.org/undocumented-immigrants-taxes-2024
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New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 625 Silver Ave. SW, Suite 195, Albuquerque, NM 87102; 505-244-9505 (p); www.nmvoices.org