ALBUQUERQUE—A report released Wednesday by the Institute on Taxation and Economic Policy (ITEP) shows that comprehensive immigration reform would bring in new revenue for states.
The analysis estimates that unauthorized immigrants are already paying $10.6 billion a year in state and local taxes nationwide, including the $86 million they pay in New Mexico. The study also estimates that New Mexico stands to gain $6 million in increased revenue should undocumented immigrants currently in the U.S. be allowed to work here legally.
The ITEP analysis assumes a newly legalized immigrant population of 85,000 in New Mexico, 11.2 million nationally, would be fully participating in the federal, state, and local tax systems. The overall revenue gain for all states would be $2 billion a year.
States like New Mexico with an income tax would see the most significant revenue changes since it is in the income tax where compliance will increase under reform. Unauthorized immigrants currently pay approximately the same level of sales and property taxes as other U.S. residents in the same income brackets.
“The conclusions of this report are consistent with what we have been saying for many years—that undocumented immigrants make significant contributions to the state and local economies in which they live, work, and raise their families. They buy things,and they rent or own homes, and sales and property taxes are paid automatically,” Senior Researcher and Policy Analyst for New Mexico Voices for Children Gerry Bradley said. “Providing them with legal work status would ensure that they are paying income taxes as well. That can only be good for states and the federal government.”
New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. Visit http://www.nmvoices.org/ for more information.
The report also finds that undocumented immigrants currently pay $1.2 billion in personal income taxes, $1.2 billion in property taxes, and $8 billion in sales and excise taxes. A breakdown of tax payments by category for each state, before and after immigration reform, is included in the report.
The study, Undocumented Immigrants’ State and Local Tax Contributions, is available at www.itep.org/immigration.