"...The newly released report by the Center for Immigration Studies (CIS) entitled
“Back Where We Started: An Examination of Trends in Immigrant Welfare Use
Since Welfare Reform” fails to adequately address several important public
policy questions central to evaluating immigrant use of benefits. Key policy
The CIS report suggests in its conclusion that the response to immigrant use of
public benefits should be to reduce the level of immigration. The implication is
that taxpayers would benefit from a reduction of immigration. But the report
itself does not support such a claim. In fact, comprehensive government-funded
studies have found that increasing immigration would result in a net tax benefit
for other Americans: although immigrants use benefits, they also pay taxes, and
their tax payments are far higher than their benefits usage.
The most comprehensive study of immigrants’ fiscal impact was conducted by
the National Research Council (NRC) in 1997. The NRC found that, on average,
taxpayers receive a net $80,000 gain (total taxes minus all fiscal costs) during the
lifetime of each immigrant who comes to the U.S. In other words, immigrants
more than pay their own way.
The increase in benefit usage identified by the CIS report from 1996-2001
occurred only in Medicaid and the State Children’s Health Insurance Program
(SCHIP). The tiny changes in immigrant use of these programs would not affect
the NRC assessment of immigrants’ overall positive fiscal impact."
"A study conducted by the National Research Council
(NRC) and National Academy of Sciences (NAS) concluded that
the total net benefit (taxes paid over benefits received) to the So-
cial Security system in today’s dollars from continuing current
levels of immigration will be nearly $500 billion for the 1998-
2022 period.16 With the baby-boomer generation approaching
retirement age, the projected increased burden on the Social Se-
curity system threatens to bankrupt the elderly population’s
safety net. And at a time when funds for Social Security are be-
coming increasingly scarce, the relevance of financial contribu-
tions made by immigrants needs to be considered.
The NRC/NAS study also reported that the average immigrant
imposes a net lifetime fiscal cost on state and local governments of
$25,000. A simple explanation for this finding is that most of the
taxes exacted from immigrants, such as income and social security
taxes, go to the federal government, whereas the services they use,
i.e. schools, hospitals, roads, etc., are provided by local governments.
One figure often absent from the analysis is the impact of
immigrants on the amount of state revenues received via the col-
lection of sales and consumption taxes. Since these taxes are re-
ceived regardless of legal status, there is no way to determine
exact figures, but it is clear that immigrants purchase goods and
services, and therefore contribute more than just the recorded
property and state income taxes. Overall, the NRC/NAS study’s
main conclusion is that on average, an additional immigrant gen-
erated a positive net contribution to the country of roughly $1,800.
Additional studies confirm these findings. The Urban Insitute
found that immigrants paid found that on the national level, im-
migrants paid $70.3 billion in taxes per year and received $42.9
billion in services.17
According to a 1998 study conducted by the
National Immigration Forum and the Cato Institute, “in their first
low-earning years in the U.S., immigrants typically are net drains
on the public coffers, but over time – usually after 10 to 15 years in
the U.S. – they turn into net contributors.”18 This study determined
that immigrant households and businesses provide $162 billion
per year in tax revenue to federal, state and local governments.
Immigrants clearly pay more in local, state and federal taxes
than they receive in most public services.Immigrant households
and businesses provide
$162 billion per year in tax
revenue to federal, state,
and local governments.
Author(s): Randolph Capps, Michael E. Fix
Posted: November 01, 2005
Citation URL: http://www.urban.org/url.cfm?ID=900898
Myth #1: Undocumented immigrants come to the United States to get welfare.
Undocumented men come to the United States almost exclusively to work. In 2003, over 90 percent of undocumented men worked—a rate higher than that for U.S. citizens or legal immigrants (Passel, Capps, and Fix 2004). Undocumented men are younger, less likely to be in school, and less likely to be retired than other men (Capps et al. 2003). Moreover, undocumented immigrants are ineligible for welfare, food stamps, Medicaid, and most other public benefits (Fix, Zimmermann, and Passel 2001).
Myth #6: Undocumented immigrants do not pay taxes.
Undocumented immigrants pay the same real estate taxes—whether they own homes or taxes are passed through to rents—and the same sales and other consumption taxes as everyone else. The majority of state and local costs of schooling and other services are funded by these taxes. Additionally, the U.S. Social Security Administration has estimated that three quarters of undocumented immigrants pay payroll taxes, and that they contribute $6-7 billion in Social Security funds that they will be unable to claim (Porter 2005).
Capps, Randy, Michael Fix, Jeffrey S. Passel, Jason Ost, and Dan Perez-Lopez. 2003. "A Profile of the Low-Wage Immigrant Workforce." Washington, DC: The Urban Institute.
Fix, Michael, Wendy Zimmermann, and Jeffrey S. Passel. 2001. "The Integration of Immigrant Families in the United States." Washington, DC: The Urban Institute.
Passel, Jeffrey S. 2005. "Unauthorized Migrants: Numbers and Characteristics." Washington, DC: Pew Hispanic Center. http://pewhispanic.org/files/reports/46.pdf.
Passel, Jeffrey S., Randy Capps, and Michael Fix. 2004. "Undocumented Immigrants: Facts and Figures." Washington, DC: The Urban Institute.
Porter, Eduardo. 2005. "Illegal Immigrants Are Bolstering Social Security with Billions." New York Times, April 5.