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By Pamela Chan
March 17, 2016
Credit : Flickr user 401(K) 2012.

With heavy talks about border control and the deportation of over 11 million undocumented individuals living in the United States looming in and around Capitol Hill, there has been more than plenty of public debate over whether or not DACA/DAPA recipients make any sort of significant contribution to this country as residents.

A new report from the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan research group that works on federal, state and local tax policy issues, seems to prove many of the naysayers wrong, noting that the country’s undocumented population has actually paid more than $11.64 billion in state and local taxes each year—despite 26 states still arguing that Obama overstepped constitutional authority with his DACA and DAPA expansion and that the pending programs continue to financially burden them.

By making use of state-by-state and national estimates of the undocumented population living in U.S. as of 2013, the authors of the study, Lisa Christensen Gee, Matthew Gardner, and ITEP State Tax Policy Director Meg Wiehe, found that granting legal status to the millions of immigrants currently awaiting their fates could in fact boost current state and local tax contributions by more than $805 million.

Furthermore, the report found that fully granting legal status to all undocumented immigrants at the federal level as part of a comprehensive immigration reform package would likely increase similar contributions “by more than $2.1 billion.” At the same time, it would also increase the effective state and local tax rate for this population from 8.1 to 8.6 percent.

“Regardless of the politically contentious nature of immigration reform, the data show undocumented immigrants greatly contribute to our nation’s economy, not just in labor but also with tax dollars,” Wiehe said in a press release.

Much like previous studies, the ITEP findings show (once again) that immigrants — even those that have no legal status — continue to pay taxes and contribute to a government from which they receive far fewer benefits than that of citizen taxpayers.

“Like other people living and working in the United States, undocumented immigrants pay state and local taxes… They pay sales and excise taxes when they purchase goods and services (for example, on utilities, clothing and gasoline). They pay property taxes directly on their homes or indirectly as renters. Many undocumented immigrants also pay state income taxes.

The best evidence suggests that at least 50 percent of undocumented immigrant households currently file income tax returns using Individual Tax Identification Numbers (ITINs), and many who do not file income tax returns still have taxes deducted from their paychecks.”

What’s more is that because so many unauthorized immigrants live in the shadows and are reluctant to claim specific services and benefits they have paid taxes for, their tax dollars also contribute money into the Social Security system, according to ITEP research from 2015.

These findings further highlight on all the potential benefits that could come from proper immigration reform. “With immigration policy playing a key role in state and national debates and President Obama’s 2014 executive action facing review by the Supreme Court, accurate information about the tax contributions of undocumented immigrants is needed now more than ever,” notes Wiehe. The country could essentially see a “positive effect on effects on labor market growth and productivity” if as many as five million undocumented immigrants are granted the ability to legally work in the country, substantially aiding our economy as a whole.

“Leaders challenging these executive actions on immigration should be ashamed,” says Lynn Tramonte, the deputy director of America’s Voice. “They are playing politics with their constituents’ lives and are denying their states needed tax revenue. It is time for the Supreme Court to put this partisan lawsuit to bed, and save our states from the irresponsible ‘leaders’ who put us down this path.”

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