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Coming Out of the Shadows: Paying Taxes as a U.S. Immigrant

TIM, The Immigrant Experience, Immigration, Limus Woods, Contributing Writer

One of the rules in the deal that President Obama put out in his Immigration Reform Speech in November as part of the steps for undocumented workers to get right with the law (and attain temporary United States citizenship) would be that they pay taxes. Now, let’s be clear about the situation – all working immigrants are not in this category. In fact, over 11 million foreign employees in the United States already pay taxes. But still, these diligent workers continue to suffer the damaging status of being undocumented, and live in fear about the possibility of them and/or their family members and friends being deported at any given time.

   Working Immigrants Pay Taxes in Large States

   All you have to do is work in one of America’s busiest cities for a little while to see that our country is full of immigrants who grind hard every day. Still, you wouldn’t know at first sight who is undocumented or legally a citizen, and this is the mental burden that they have to carry around as their diligent work ethics continue to help our U.S. economy. Fact Tank did a study in 2014 that showed a timeline from 1990 – 2012 that contained the number of immigrants in each state. The top two didn’t change in that period; they were California and New York. And, most recently, the next three most populated places on the list were New Jersey, Florida and Nevada.

But, the question is how much money is contributed to the U.S. economy in those places that are heavily inhabited by working immigrants and their families? Well, according to the Institute on Taxation & Economic Policy, they will likely help the country’s money problems a lot more after their reform is established. For example, in Nevada they pay just under $124 million right now, but that number could rise by around $7 million if the workers became legal citizens. Post-reform in Florida, $747 million would be made compared to the $706 million that’s currently being brought in by the Sunshine State. Additional New Jersey taxes raked in would actually be about $80 million, New York’s current number would rise by $220 million, and California (the state with the most working immigrants in the entire U.S.) would collect another $300 million each year after reform.

   Common Perceptions of Immigrants and the Economy

Working immigrants are sometimes stereotyped into a negative category of people that are in the U.S. to get a free ride of some sort, but that simply is not true. Above, we talked about them paying income taxes, but didn’t mention that there are many very responsible undocumented U.S. immigrant employees that pay all types of taxes across the board. The American Immigrant Council found that they pay anywhere between $90 and $140 billion in property and sales taxes on the state as well as federal levels. The council also put to rest the notion that immigrants are simply here to use up welfare benefits, when their studies finally showed that compared to the close to $240 billion they pay annually in overall taxes, this group of people only collect about $5 billion in community benefits.

Some Americans who work side by side with tax-paying immigrants also at times get the stereotypical feeling that many people who are not originally from this country are only making money here so that they can send it back to their home nations. If you look at it in a different light, this is actually a type of foreign investment, seeing as how our alien residents’ businesses contribute to our economy over $160 billion annually. And, as far as the rumor goes that immigrants are taking jobs away from American citizens, we all have to remember that our quickest growth economically in the last hundred years (along with our lowest unemployment rates) concur as foreign business owners populate the states.

   Tax Paying Immigrants and Government Benefits  

Even as more and more immigrants “come out of the shadows” (as President Obama put it) and begin to pay taxes, chances are them getting benefits such as Food Stamps and Medicaid is still a work in progress. If the Republicans in Washington would work with our diligent Commander-in-Chief in favor of undocumented immigrant reform, then these are the small wrinkles that could be ironed out of an almost completely beneficial Executive Order. As of right now, though, those who hold a green card must do so for at least five years before they can apply for this type of assistance.

That being said, the real truth is that most immigrant workers (those who are still in the shadows as well as those that are documented) don’t make getting these types of “freebies” their number one priority. They love America for the same reasons that we all do; they want to simply be able to work hard, study, and become productive citizens in the world’s freest society.


   Contributing writer Limus Woods can be contacted at

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