Myths and facts about immigration

(Editor’s Note: This is the second in a seven-part series of immigration reform articles prepared by the Indiana Catholic Conference. Capsule forms have been prepared for use in parish bulletins. Diocesan newspapers throughout the state have agreed to publish the series in its longer form.)

Perceived myth: Immigrants don’t pay taxes.

Known fact: Immigrants pay taxes in the form of income, property, sales and other taxes at the federal and state level.

As far as income tax payments go, sources vary in their accounts, but a range of studies find that immigrants pay between $90 billion and $140 billion a year in federal, state and local taxes.

Undocumented immigrants pay income taxes as well, as evidenced by the Social Security Administration’s “suspense file” (taxes that cannot be matched to workers’ names and Social Security numbers), which grew by $20 billion between 1990 and 1998 (Source: www.immigrationforum.org/about/articles/tax_study.htm).

How do immigrants pay taxes?

Immigrants pay taxes in a number of ways, including income and sales tax.

The majority of undocumented immigrants pay income taxes using Individual Taxpayer Identification Numbers (ITINs) or false Social Security numbers.

Studies show that immigrants contribute more in taxes and Social Security payments than they consume in public resources.

The most authoritative study conducted by the National Research Council found that the average immigrant pays nearly $1,800 per year more than he or she uses in services, such as education and health care.

In addition, the Social Security system reaps the biggest windfall from taxes paid by immigrants. The Social Security Administration reports that it holds ­approximately $420 billion from the earnings of immigrants who are not in a position to claim benefits (Testimony by Social Security Administration officials, March 2004).

In addition to state income taxes, all immigrants, including undocumented immigrants, pay the same sales taxes and property taxes—whether they own homes or taxes are passed through to rents—as everyone else. The majority of state and local costs of schooling and other services are funded by these taxes.

The National Research Council also estimates that the economic benefits of immigration run as high as $10 billion a year. Immigrants contribute to the economy by working in jobs and performing services vital to our way of life, and contribute to the common good through their service and their taxes. †