$8.9 million revenue boost with immigration reform

A new report projects a 24 percent increase in state and local tax revenues from undocumented immigrants in Iowa if they were granted permanent legal residence.

The 50-state study by the Institute on Taxation and Economic Policy examines current tax contributions by undocumented immigrants and projects how state revenues would rise either with the Obama Administration’s executive actions, or with passage of comprehensive reform that has stalled in Congress.

Find the report, Undocumented Immigrants’ State and Local Tax Contributions, here. It offers a sensible approach on how to quantify tax contributions by these immigrants — whose tax contributions often go unrecognized in political talking points. But undocumented immigrants pay sales and property taxes just like anyone else, and many have income taxes deducted from their paychecks.

As stated by ITEP’s state tax policy director, Meg Wiehe, “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.”

The report estimates current state and local taxes by undocumented immigrants in Iowa are $37.38 million, but would rise to $46.29 million — an increase of $8.91 million — with comprehensive immigration reform.

Full implementation of the 2012 and 2014 executive actions would create a smaller impact in Iowa, estimated to be a $3.61 million increase from the $17.18 million paid now by those affected.

According to ITEP, the 11 million undocumented immigrants currently living in the United States collectively paid $11.64 billion in state and local taxes. ITEP finds their combined nationwide state and local tax contributions would increase by $805 million under full implementation of the administration’s 2012 and 2014 executive actions and by $2.1 billion under comprehensive immigration reform.

 

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Posted by Mike Owen, Executive Director of the Iowa Policy Project
Contact: mikeowen@iowapolicyproject.org

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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