BY MATTHEW O’BRIEN, DIRECTOR OF RESEARCHSPENCER RALEY, RESEARCH ASSOCIATE ANDJACK MARTIN, ADVISORY BOARD MEMBER
The Fiscal Burden of Illegal Alienson U.S. TaxpayersTotal Fiscal Burden of Illegal AliensTotal Governmental Expenditures on Illegal
AliensTotal State & Local Expenditures
Total National Expenditures
Total National Expenditures
Total Tax Contributions by Illegal Aliens-total Fiscal Burden of Illegal Aliens on U.S. Taxpayers:
Total Federal Expenditures
Total State & Local Taxes Paid
Total Federal Taxes Paid
Total Tax Contributions
Total Tax Contributions
Introduction continually growing population of illegal aliens, along with the federal government’s ineffective efforts to secure our borders, present significant national security and public safety threats to the United States. They also have a severely negative impact on the nation’s taxpayers at the local, state, and national levels. Illegal immigration costs Americans billions of dollars each year. Illegal aliens are net consumers of taxpayer-funded services and the limited taxes paid by some segments of the illegal alien population are, in no way, significant enough to offset the growing financial burdens imposed on U.S. taxpayers by massive numbers of uninvited guests.Political and judicial efforts to accord illegal aliens the same government benefits available to U.S. citizens (e.g., the Supreme Court’s holding in Plyler v. Doe guaranteeing illegal alien children a free public education, at taxpayer expense) have increasingly stressed federal, state and local budgets — to the detriment of Americans, particularly the poor, elderly, and disabled. The impact on public school systems1 and criminal justice institutions2 has been particularly harsh. And the situation has been greatly exacerbated by government refusal to implement measures aimed at deterring, detecting and prosecuting illegal aliens who commit fraud to obtain benefits and/or to avoid deportation following a criminal conviction.This study examines the fiscal impact of illegal aliens as reflected in both federal and state budgets. It does not address the question of whether unchecked mass migration is a net boon to the United States. Most studies that extol the many benefits that allegedly accrue from illegal immigration suffer from a number of key problems:•Unreasonable assumptions about who is an illegal alien. Most relevant datasets don’t clearly distinguish who is an illegal alien and who isn’t. Studies that wish to portray illegal immigration in a favorable light frequently rely on narrow definitions of “illegal alien” to skew data in their favor.•Failure to examine whether the same, or even more significant, benefits would be achieved by filling vacant jobs, at market wages, with American employees.
•Refusal to acknowledge that there are many activities which create profit but remain illegal because of their negative effects on society as a whole. The exploitation of illegal alien labor to increase the profits of unscrupulous employers falls squarely into this category.•A deceptive and inappropriate focus on the amount of taxes remitted by illegal aliens, rather than the taxes actually paid by illegal aliens. The American system of taxation returns a significant portion of monies paid by people earning low incomes. As a result, most illegal aliens receive a refund of all tax payments along with additional net income from the federal government, in the form of tax credits.
•Erroneous claims that illegal aliens subsidize federal benefit programs through un-refunded tax payments remitted by illegal aliens who are unable collect a return. Most illegal aliens are able to file a tax return using an Individual Tax Identification Number (ITIN). In addition, neither the states or the federal government have any data indicating how much of the pool of unclaimed tax refunds is attributable to illegal aliens versus deceased taxpayers, foreign investors, etc.
The Fiscal Burden of Illegal Immigration on United States Taxpayers (2017)
Even in the absence of any complex studies, basic mathematics make it self-evident that illegal aliens are a drain on the U.S. economy. For example, in its report The Sinking Lifeboat: Uncontrolled Immigration and the U.S. Health Care System in 2009, FAIR found that, in some hospitals, as many as two-thirds of total operating costs are attributable to uncompensated care for illegal aliens.3 If those costs are being borne by American taxpayers, rather than the illegal aliens who received medical treatment, then those illegal aliens are consuming more services than they pay for, and the costs of providing those services are never recouped. That makes them a net drain on the economy.A careful examination of the federal budget shows an annual outlay of approximately $46 billion for expenses related to illegal immigration. A review of state budgets indicates even greater local costs, estimated at $89 billion annually. This means that the overall costs attributable to illegal aliens totals an annual bill of $135 billion. That equates to over $8,000 per illegal alien and dependent, per year.Some illegal aliens do pay certain taxes. However, employers usually hire illegal aliens to obtain cheap labor at wages well below the market rate for a given area. Many of those employers pay illegal aliens “under-the-table” and do not deduct payroll taxes. Due to their lack of immigration status, illegal aliens are unlikely to report their income to the Internal Revenue Service (IRS). Therefore, state and local governments, as well as the federal government, are not collecting enough taxes from illegal aliens to cover the costs of the services they consume. We estimate that illegal aliens actually pay just under $19 billion in combined state, local, and federal taxes. That means that the United States recoups only about 14 percent of the amount expended annually on illegal aliens. If the same jobs held by illegal aliens were filled by legal workers, at the prevailing market wage, it may safely be presumed that federal, state and local governments would receive higher tax payments. FAIR firmly believes that the costs of illegal immigration (and massive legal immigration) significantly outweigh any perceived benefit. Accordingly, this study focuses only on calculating the overall costs of illegal immigration. How Many Illegal Aliens Currently Reside in the United States?Estimating the fiscal burden of illegal immigration on the U.S. taxpayer depends on the size and characteristics of the illegal alien population.
FAIR defines “illegal alien” as anyone who entered the United States without authorization and anyone who unlawfully remains once his/her authorization has expired.It is challenging to determine how many illegal aliens are present in the United States at any given time. The Department of Homeland Security only counts those foreigners who enter and leave the country through lawful channels. Those who deliberately evade immigration authorities and sneak across the border remain uncounted. Once in the United States, most illegal aliens live in the shadows and interact with the government only on a very limited basis. Others commit ongoing immigration and identity fraud, claiming to be either green card holders or U.S. citizens. As a result, the U.S. government typically becomes aware of illegal aliens when they are encountered by state and local, or federal, law enforcement agencies. Unfortunately, the U.S. government has no central database containing information on the citizenship status of everyone lawfully present in the United States. Therefore it is often difficult for police, prison officials, and other enforcement entities to determine whether an individual they encounter is actually lawfully present in the United States, or whether that individuals is falsely claiming to be here legally.