A new in-depth national study from the Institute on Taxation and Economic Policy found that undocumented folks living in Idaho pay higher state and local tax rates than Idaho’s wealthiest citizens.
According to the study, undocumented immigrants in Idaho contributed $72 M in state and local taxes in 2022. In Idaho and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders.
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP Senior Policy Analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
Undocumented immigrants pay sales and excise taxes on goods and services like utilities, household products, and gasoline. They pay property taxes either directly on their homes or indirectly when these taxes are folded into the price of their monthly rent. And they pay income and payroll taxes through automatic withholding from their paychecks or by filing income tax returns using Individual Taxpayer Identification Numbers (ITINs). In Idaho, of the total state and local taxes undocumented immigrants pay, 44 percent of the tax contributions are through sales and excise taxes, 28 percent are through property taxes, and 27 percent are through personal or business income taxes.
“ITEP’s study shines a light on how undocumented immigrants pay higher tax rates than the top 1 percent in Idaho,” said May Roberts, Policy Analyst at the Idaho Center for Fiscal Policy. “This information is important for lawmakers to consider when making policies that affect our tax structure and undocumented folks living in Idaho.”
While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals. Taking those economic ripple effects into account would likely reveal that undocumented immigrants have an even larger significance in public revenues than is documented here.
This study is another reminder that undocumented immigrants are contributing to our economies and our shared public services, and that immigration policy choices made in the years ahead will have significant consequences for public revenues.
The full report can be read here: https://itep.org/undocumented-immigrants-taxes-2024/
