Undocumented Immigrants' State and Local Tax Contributions

7/24/2019 Undocumented Immigrants' State and Local Tax Contributions

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Undocumented ImmigrantsState & Local Tax Contributions

Lisa Christensen Gee

Matthew Gardner

Meg Wiehe

Updated February 2016


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About The Institute on Taxation & Economic Policy

Te Institute on axation and Economic Policy (IEP) is a non-profit, non-partisan researchorganization that works on federal, state, and local tax policy issues. IEPs mission is to ensure thatelected officials, the media, and the general public have access to accurate, timely, and straightfor-ward information that allows them to understand the effects of current and proposed tax policies.IEPs work focuses particularly on issues of tax fairness and sustainability.

Acknowledgments

IEP extends special thanks to David Dyssegaard Kallick at the Fiscal Policy Institute, MichaelLeachman at the Center on Budget and Policy Priorities, Jeanne Batalova at the Migration PolicyInstitute and anya Broder and K amal Essaheb at the National Immigration Law Center for theirguidance on this report.

THE INSTITUTE ON TAXATION & ECONOMIC POLICY1616 P Street, NW Suite 200, Washington, DC 20036

Tel: 202.299.1066 www.itep.org


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1 Institute on Taxation and Economic PolicyIFebruary 2016

Public debaes over ederal immigraion reorm ofen suffer rom insufficien and inaccurae inormaionabou he ax conribuions o undocumened immigrans paricularly a he sae level. Te ruh is haundocumened immigrans living in he Unied Saes pay billions o dollars each year in sae and localaxes. Furher, hese ax conribuions would increase significanly i all undocumened immigrans cur-renly living in he Unied Saes were graned a pahway o ciizenship as par o a comprehensive immi-

graion reorm.

Accurae inormaion abou he ax conribuions o undocumened immigrans is needed now morehan ever. Congress has ye o pass comprehensive immigraion reorm legislaion. Presiden Obamaook execuive acion in 2012 and announced his inenion o ake acion in 2014 o gran relie o eligibleindividuals who came o he Unied Saes as children (DACA) and o eligible parens o children whoare ciizens or lawul permanen residens (DAPA). Te 2014 execuive acions are acing review by heSupreme Cour in he spring o 2016. And immigraion is a leading issue among he 2016 presidenial

candidaes.

o beter inorm he ongoing debaes on immigraion policy reorm, his repor provides sae-by-saeand naional esimaes on he curren sae and local ax conribuions o he 11 million undocumenedimmigrans living in he Unied Saes as o 2013, he increase in conribuions i all hese axpayers weregraned legal saus as par o comprehensive reorm, and he increase in conribuions o he more han 5million undocumened immigrans who could be direcly affeced by Presiden Obamas 2012 and 2014execuive acions.1

Key Findings:

Undocumened immigrans conribue significanly o sae and local axes, collecively paying anesimaed $11.64 billiona year.2 Conribuions range rom almos $2.2 million in Monana wih anesimaed undocumened populaion o 4,000 o more han $3.1 billion in Caliornia, home o morehan 3 million undocumened immigrans.

Undocumened immigrans naionwide pay on average an esimaed 8 percen o heir incomes in

sae and local axes (his is heir effecive sae and local ax rae). o pu his in perspecive, he op 1percen o axpayers pay an average naionwide effecive ax rae o jus 5.4 percen.3

1Migraion Policy Insiue (MPI) analysis o U.S. Census Bureau daa rom he 200 9-2013 ACS pooled, and he 2008 Survey o Income and Program Paricipa-

ion (SIPP) by Colin Hammar and James Bachmeier o emple Universiy and Jennier Van Hook o Pennsylvania Sae Universiy, Populaion Research Insi-

ue.

2See he mehodology secion or more inormaion on he calculaion o esimaed undocumened immigran sae and local ax paymens.

3Insiue on axaion and Economic Policy, Who Pays? A Disribuional Analysis o he ax Sysems in All 50 Saes, January 2015. Available: www.whopays.org


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Undocumented Immigrants State & Local Tax Contributions 2

Graning legal saus o all undocumened immigrans in he Unied Saes as par o a comprehensiveimmigraion reorm and allowing hem o work legally would increase heir sae and local ax conri-buions by an esimaed $2.1 billiona year. Teir naionwide effecive sae and local ax rae wouldincrease o 8.6 percent.

Te sae and local ax conribuions o he undocumened immigrans who could be direcly impacedby Presiden Obamas 2012 and 2014 execuive acions would increase by an esimaed $805 milliona year once ully in place. Te effecive sae and local ax rae or his populaion would increase rom8.1 o 8.6 percent. Sae and local revenue gains rom he execuive acions are smaller han gains romgraning legal saus o all undocumened immigrans because he acions (i upheld) would only affecaround 46 percen o he undocumened populaion and he acions do no gran a ull pahway o law-ul permanen residence or ciizenship.

Undocumented Immigrants Pay State and Local Taxes:Current Contributions

Like oher people living and working in he Unied Saes, undocumened immigrans pay sae and lo-cal axes. Tey pay sales and excise axes when hey purchase goods and services (or example, on uili-ies, clohing and gasoline). Tey pay propery axes direcly on heir homes or indirecly as reners. Manyundocumened immigrans also pay sae income axes. Te bes evidence suggess ha a leas 50 perceno undocumened immigran households currenly file income ax reurns using Individual ax Idenifica-

ion Numbers (IINs), and many who do no file income ax reurns sill have axes deduced rom heirpaychecks. 4

Collecively, undocumened immigrans in he Unied Saes pay an esimaed oal o $11.64 billion insae and local axes a year (see able 1 or sae-by-sae esimaes). Tis includes more han $6.9 billion insales and excise axes, $3.6 billion in propery axes, and jus under $1.1 billion in personal income axes.

Anoher way o measure he sae and local axes ha undocumened immigrans pay is hrough heir effec-ive ax rae, which is he share o oal income paid in axes. Te effecive ax rae is useul or more accurae

sae-o-sae comparisons because i accouns or differences beween saes ax srucures and populaionsize. Undocumened immigrans naionwide average effecive ax rae is an esimaed 8 percen. o pu hisin perspecive, he op 1 percen o axpayers pay an average naionwide effecive ax rae o jus 5.4 percen.5

4See his repors mehodology secion or more inormaion abou curren personal income ax compliance.

5Insiue on axaion and Economic Policy (see oonoe 3).


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Granting Legal Status to All Undocumented Immigrants Would BoostTheir State and Local Tax Contributions

Creaing a pahway o ciizenship or he 11 million undocumened immigrans living in he Unied Saesand allowing hem o work here legally would boos heir curren sae and local ax conribuions by morehan $2.1 billion a year (See able 1). Personal income ax collecions would increase by more han $1 bil-lion a year. Sales and excise axes would increase by $695 million, and propery axes would grow by $360

million. As a resul, he overall sae and local axes paid by undocumened immigrans as a share o heirincome would increase rom 8 percen o 8.6 percen.

3 Institute on Taxation and Economic PolicyI February 2016

State Current State and Local

Taxes

State and Local Taxes if

Granted Full Legal Status Tax Change State

Current State and Local

Taxes

State and Local Taxes if

Granted Full Legal Status Tax Change

Alabama $63,783,000 $81,984,000 +$18,201,000 M on ta na $2,207,000 $3,047,000 +$840,000

Alaska $3,512,000 $3,863,000 +$351,000 Ne braska $42,096,000 $49,529,000 +$7,433,000

Arizona $2 31 ,4 50 ,00 0 $ 27 3,9 02 ,0 00 + $42 ,45 2, 00 0 Ne vad a $91,035,000 $100,138,000 +$9,103,000

Arkansas $58,605,000 $71,934,000 +$13,329,000 New Hampshire $8,205,000 $9,076,000 +$871,000

California $3,170,401,000 $3, 619,437,000 +$449,036,000 New J ersey $5 90 ,3 02 ,00 0 $66 7,6 08 ,0 00 +$77,306,000

Colorado $1 34 ,5 82 ,00 0 $ 17 0,4 50 ,0 00 +$35,868,000 New M exico $67,999,000 $76,022,000 +$8,023,000

Connecticut $1 36 ,2 33 ,00 0 $ 15 7,7 72 ,0 00 + $21 ,53 9, 00 0 Ne w Y or k $1,108,625,000 $1, 355,008,000 +$246,383,000

Delaware $11,966,000 $17,244,000 +$5,278,000 North Carol in a $2 75 ,8 40 ,00 0 $36 8,5 14 ,0 00 +$92,674,000

Dist. of Col. $27,083,000 $33,157,000 +$6,074,000 North Dakota $ 3,759,000 $4,311,000 +$552,000

Florida $5 88 ,0 86 ,00 0 $ 64 6,8 94 ,0 00 + $58 ,80 8, 00 0 Oh io $84,857,000 $110,595,000 +$25,738,000

Georgia $3 58 ,7 53 ,00 0 $ 46 4,4 30 ,0 00 +$105,677,000 Okl ah oma $77,268,000 $94,278,000 +$17,010,000

Hawaii $30,231,000 $39,881,000 + $9 ,6 50 ,0 00 Or eg on $78,169,000 $114,882,000 +$36,713,000

Idaho $26,248,000 $31,468,000 +$5,220,000 P en nsyl va nia $ 139 ,4 04 ,00 0 $1 90,9 31 ,0 00 +$51,527,000

Illinois $743,288,000 $897,781,000 +$154,493,000 Rhode Island $33,438,000 $40,442,000 +$7,004,000

Indiana $89,253,000 $116,970,000 +$27,717,000 South Carolina $ 67,697,000 $86,085,000 +$18,388,000

Iowa $37,381,000 $46,292,000 +$8,911,000 South Dakota $4,252,000 $4,677,000 +$425,000Kansas $69,278,000 $80,435,000 +$11,157,000 Ten nessee $1 05 ,2 77 ,00 0 $1 15,8 36 ,0 00 +$10,559,000

Kentucky $37,368,000 $53,352,000 + $15 ,98 4, 00 0 T ex as $1,542,397,000 $1,696,637,000 +$154,240,000

Louisiana $61,060,000 $74,726,000 + $13 ,66 6, 00 0 U tah $67,102,000 $87,109,000 +$20,007,000

Maine $4,344,000 $5,483,000 + $1, 139 ,0 00 V er mo nt $3,918,000 $4,543,000 +$625,000

Maryland $3 08 ,0 55 ,00 0 $ 39 3,6 69 ,0 00 +$85,614,000 Virginia $2 45 ,8 57 ,00 0 $3 24 ,1 48 ,0 00 +$78,291,000

Massachusetts $2 01 ,3 69 ,00 0 $ 26 2,0 80 ,0 00 +$60,711,000 Washington $2 92 ,1 69 ,00 0 $3 21 ,3 85 ,0 00 +$29,216,000

Michigan $83,833,000 $109,845,000 +$26,012,000 West Virginia $ 4,204,000 $5,596,000 +$1,392,000

Minnesota $77,066,000 $94,713,000 +$17,647,000 Wisconsin $80,863,000 $98,333,000 +$17,470,000

Mississippi $21,872,000 $26,930,000 + $5, 058 ,0 00 Wy om in g $3,625,000 $3,987,000 +$362,000

Missouri $48,273,000 $62,690,000 +$14,417,000 All States $11,643,936,000 $13,770,107,000 +$2,126,171,000

Table 1: Undocumented Immigrants' State and Local Tax ContributionsCurrent vs. Full Legal Status for All Undocumented Immigrants


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Te mos significan revenue gain (50 percen) would come rom he personal income ax, due o boh in-creased earnings and ull compliance wih he ax code.6 Muliple sudies have shown ha legal immigranshave higher wages han undocumened immigrans, hus gaining legal saus could lead o a boos in wages.Te wage boos is in par due o beter job opporuniies ha would be made available o workers wih legalsaus and also in par o an increase in higher-level skills and beter raining. Mos comprehensive reorm

measures o dae have included srong incenives or requiremens or undocumened immigrans granedlegal saus o ully comply wih ax law.

See Appendix 1 for state-by-state estimates of the current and post-reform state and local tax contri-

butions of the total undocumented immigrant population. Te appendix includes effective tax rates

and totals for personal income, property, and sales and excise taxes.

President Obamas Executive Actions Would Increase State and Local

Tax Revenues

Presiden Obama ook execuive acions in 2012 and 2014 o provide emporary relie rom deporaionand gran work permis o eligible undocumened immigrans. Under he Deerred Acion or ChildhoodArrivals (DACA) program, his relie was made available o up o 1.2 million eligible undocumened immi-grans who came o he counry as children. Under he 2014 execuive acion, Presiden Obama expandedDACA by anoher 275,000 undocumened immigrans and announced he Deerred Acion or Parenso Americans and Lawul Permanen Residens (DAPA) program, which would allow 3.6 million eligibleundocumened parens o apply or relie rom deporaion and or work auhorizaion.7 Pending Supreme

Cour review o he 2014 execuive acion, more han 5 million undocumened immigrans could benefirom hese execuive acions, amouning o abou 46 percen o he oal populaion o undocumened im-migrans living in he Unied Saes.

I ully implemened, graning emporary immigraion relie o hese 5 million undocumened immigranshrough DACA and DAPA would boos heir curren sae and local ax conribuions by more han $805million (See able 2). Personal income ax collecions would increase by $442 million a year. Sales and ex-cise axes would increase by $239 million, and propery axes would grow by $123 million. As a resul, he

overall sae and local axes paid by his populaion as a share o heir income would increase rom 8.1 per-cen o 8.6 percen. Te mos significan revenue gain (55 percen) would come rom he personal incomeax, due o boh increased earnings and ull compliance wih he ax code. Since he undocumened immi-grans who would benefi rom he execuive acions would be allowed o apply or a hree-year renewable

6See his repors mehodology or a deailed descripion o wage boos and ax compliance assumpions applied o he change in sae and local ax conribuions pos-

reorm.7Migraion Policy Insiue (see oonoe 1).


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work permi, some amoun o wage boos could be expeced. Due o he mandaes o he execuive acionsand he srong incenives undocumened immigrans have or compliance wih he ax laws, i is also logicalo assume ull ax compliance or his impaced populaion (see he mehodology secion or more inor-maion).

See Appendix 2 for state-by-state estimates of the current and post-reform state and local tax contri-butions of the 5 million undocumented immigrants directly affected by President Obamas execu-

tive actions. Te appendix includes effective tax rates and totals for personal income, property, and

sales and excise taxes.


State Current State and Local

Taxes

Taxes Under Full

Implementation of Exec.

Actions

Tax Change State Current State and Local

Taxes

Taxes Under Full

Implementation of Exec.

Actions

Tax Change

Alabama $27,462,000 $34,497,000 + $7 ,0 35 ,0 00 M ont an a $659,000 $889,000 +$230,000Alaska $1,049,000 $1,127,000 +$78,000 Nebraska $20,479,000 $23,548,000 +$3,069,000

Arizona $119,232,000 $137,894,000 + $18 ,66 2, 00 0 Ne vad a $43,538,000 $46,804,000 +$3,266,000

Arkansas $30,388,000 $36,452,000 +$6,064,000 New Hampshire $2,450,000 $2,648,000 +$198,000

California $1,591,470,000 $1,775,584,000 +$184,114,000 New J ersey $227,307,000 $251,232,000 +$23,925,000

Colorado $68,932,000 $85,320,000 +$16,388,000 New M exico $34,971,000 $38,209,000 +$3,238,000

Connecticut $50,457,000 $57,106,000 + $6 ,6 49 ,0 00 Ne w Y or k $421,968,000 $504,025,000 +$82,057,000

Delaware $4,895,000 $6,894,000 +$1,999,000 North Carol in a $122,595,000 $160,062,000 +$37,467,000

Dist. of Col. $7,583,000 $9,073,000 +$1,490,000 North Dakota $1,122,000 $1,258,000 +$136,000

Florida $222,598,000 $239,292,000 + $16 ,69 4, 00 0 Oh io $34,761,000 $44,274,000 +$9,513,000

Georgia $158,837,000 $200,952,000 +$42,115,000 Okl ah oma $35,736,000 $42,613,000 +$6,877,000

Hawaii $10,581,000 $13,641,000 + $3 ,0 60 ,0 00 Or eg on $40,104,000 $57,600,000 +$17,496,000

Idaho $15,241,000 $17,856,000 +$2,615,000 P en nsyl va nia $52,277,000 $69,972,000 +$17,695,000

Illinois $373,792,000 $441,224,000 +$67,432,000 Rhode Isl an d $13,584,000 $16,056,000 +$2,472,000

Indiana $41,267,000 $52,854,000 +$11,587,000 South Carolina $27,352,000 $33,991,000 +$6,639,000

Iowa $17,175,000 $20,786,000 +$3,611,000 South Dakota $1,269,000 $1,365,000 +$96,000

Kansas $35,172,000 $39,908,000 + $4 ,7 36 ,0 00 T en ne sse e $43,349,000 $46,613,000 +$3,264,000

Kentucky $14,947,000 $20,856,000 +$5,909,000 Texas $785,948,000 $844,894,000 +$58,946,000

Louisiana $18,318,000 $21,908,000 +$3,590,000 Utah $36,992,000 $46,930,000 +$9,938,000

Maine $1,297,000 $1,600,000 +$303,000 Ver mont $1,170,000 $1,325,000 +$155,000

Maryland $107,092,000 $133,744,000 +$26,652,000 Virginia $89,583,000 $115,426,000 +$25,843,000

Massachusetts $70,751,000 $89,989,000 +$19,238,000 Washington $143,220,000 $153,961,000 +$10,741,000

Michigan $35,434,000 $45,374,000 +$9,940,000 West Virginia $1,255,000 $1,633,000 +$378,000

Minnesota $36,155,000 $43,424,000 + $7, 269 ,0 00 Wi sc ons in $37,239,000 $44,256,000 +$7,017,000

Mississippi $7,571,000 $9,110,000 + $1, 539 ,0 00 Wy om in g $1,082,000 $1,163,000 +$81,000

Missouri $21,172,000 $26,871,000 +$5,699,000 All States $5,308,882,000 $6,114,086,000 +$805,204,000

Current vs. Post Implementation of Exec utive Actions

Table 2: State and Local Tax Contributions of Undocumented Immigrant Population Impacted by Executive Actions


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MethodologyWhile he spending and income behavior o undocumened immigran amilies is no as well documened as hao US ciizens, he esimaes in his repor represen a bes approximaion o he axes amilies headed by undocu-mened immigrans likely pay.

Te IEP mehodology used o calculae he curren and poenial ax conribuion o undocumened immigranuses six main daa poins:

1. Esimaed undocumened immigran populaion in each sae2. Esimaed impaced populaion under he 2012 and 2014 Execuive Acions in each sae3. Average size o undocumened immigran amilies/axpaying unis4. Range o annual undocumened immigran amily/axpayer income in each sae5. Esimaed number o undocumened immigrans who are homeowners6. Esimaed effecive ax raes (axes as share o income) or income, sales, and propery axes paid by low- and

moderae-income amilies in each sae

Addiional assumpions are made (and described below) abou he change in ax conribuions ha would occurin wo insances: i all 11 million undocumened immigrans were graned legal saus under comprehensive im-migraion reorm; and i 5 million undocumened immigrans were graned emporary deerred acion by PresideObamas 2012 and 2014 execuive acions.

See Appendix 3 for state-by-state details on data used to assist in calculating the state and local tax contribu

tions.

1. Estimated undocumented immigrant population in each stateEsimaes o each saes undocumened immigran populaion are rom he Migraion Policy Insiue (MPI).8 Acording o MPI, an esimaed 11 million undocumened immigrans resided in he U.S. as o 2013 (an esimae his roughly 400,000 lower han MPIs esimae rom 2012 daa.)

2. Estimated impacted population under the 2012 and 2014 Executive Ac-tions in each state

Esimaes o each saes impaced undocumened immigran populaion under he 2012 and 2014 execuive ac-ions are rom he MPI.9 According o MPI, an esimaed 5 million undocumened immigrans (46 percen o heoal undocumened populaion) are poenially eligible o receive immigraion relie under he execuive acions.

8Ibid.9Ibid.



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3. Average size of undocumented immigrant families/taxpaying unitsTe Pew Research Cener calculaed a naionwide esimae o he number o people per undocumened immigranamily. Te mos recen esimae, 2.29, is used o find an esimaed number o undocumened amilies, or axpayingunis, by sae.10 IEP divided populaion esimaes or each sae (oal and affeced populaions) by he averageamily size o find an esimaed number o undocumened amilies/axpaying unis living in each sae and he num-ber o amilies/axpaying unis impaced by he 2012 and 2014 execuive acions.

4. Range of annual undocumented immigrant family/taxpayer income ineach stateEsimaes o he income disribuion o undocumened amilies are rom MPI daa on he number o undocu-mened amilies in five discree income groups.11 IEP used he midpoin o he income ranges in each group asan esimae o average income wihin each group and muliplied by he number o amilies/axpaying unis in eachgroup o calculae aggregae income in hese groups.

5. Estimated number of undocumented immigrants who are homeownersIEP used MPI daa on undocumened amilies homeownership raes or each sae. We hen calculaed separaepropery ax incidence analyses or homeowners and reners in each sae. Applying he homeowner effecive axraes o he homeowner populaion and he rener ax raes o he rener populaion yielded a combined properyax esimae or all undocumened amilies in each sae.12

6. Estimated effective tax rates (taxes as share of income) for income, sales,and property taxes paid by low- and moderate-income families in eachstate13

IEPs microsimulaion compuer model is a sophisicaed program ha applies he sae and local ax laws in eachsae (including income, sales, excise and propery ax laws) o a saisically valid daabase o ax reurns o generaeesimaes o he effecive ax raes paid by axpayers a various income levels under sae and local ax law in place aso December 31, 2014. In January o 2015, IEP released he 5h ediion o Who Pays?which esimaes he effec ohe sae and local ax laws as o January 2015 on axpayers a 2012 income levels. Tis repor applies effecive axraes calculaed in he 2015 Who Pays? repor o he undocumened populaion wih one excepion. Te effeciveax raes in five saes: Caliornia, Maine, Massachusets, New Jersey, and Rhode Island were slighly modified or heanalysis o include he enacmen or enhancemen o sae EICs in 2015 (his change applies only o he analysis

pos-reorm or boh graning legal saus o all undocumened immigrans and under he execuive acions anddoes no impac he curren ax conribuions).

10 Passel and Cohn, Unauhorized Immigran Populaion, Naional and Sae rends, 2010, Pew Research Cener, Feb. 1, 2011.

11Migraion Policy Insiue (see oonoe 1).12Ibid.13 Insiue on axaion and Economic Policy (see oonoe 3).



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Te ollowing assumpions were made o calculae he sales, propery, and income axes o he undocumened im-migraion populaion:

Sales tax: Sales axes are colleced by reailers every ime a purchase is made on a axable good or service. Iis reasonable o assume ha undocumened immigrans pay sales ax a similar raes o U.S. ciizens and legalimmigrans wih similar incomes. Tis analysis adjuss he esimaed annual incomes or each sae downward

by 10 percen or purposes o calculaing he sales ax paid o accoun or remitances. Research shows haundocumened immigrans send abou 10 percen o heir income o amilies in heir counries o origin, so hisporion o undocumened axpayers income is unavailable or axable consumpion.14

Property tax: Te firs sep in calculaing propery axes was o ideniy he share o undocumened immigranamilies who are homeowners or reners in each sae. Tis analysis used sae-by-sae daa rom he MPI oesimae homeownership raes or undocumened immigrans in each sae. Te model assumes ha or reners,hal o he cos o he propery ax paid iniially by owners o renal properies is passed hrough o reners.

Income tax:Various sudies have esimaed beween 50 and 75 percen o undocumened immigrans cur-renly pay personal income axes using eiher alse social securiy (SSN) or individual ax idenificaion (IIN)numbers.15 Tis analysis assumes a 50 percen compliance rae or curren axes and 100 percen pos-reorm(or boh graning legal saus o all undocumened immigrans and under he execuive acions).

Undocumened immigrans are currenly ineligible o receive he ederal Earned Income ax Credi (EIC)and sae versions o he credi because hey lack he legal auhoriy o work in he U.S. Accordingly, he impaco sae EICs has been removed rom he curren personal income ax esimaes. Tis has he effec o increas-

ing he effecive income ax raes paid by hese undocumened axpayers under curren law.

Addiional indicaors used o make calculaions or anicipaed sae and local ax changes i legal saus is graned aspar o comprehensive immigraion reorm or under he execuive acions:

Wage boost:Tis sudy assumes ha having he auhoriy o work legally in he Unied Saes would increaseundocumened immigrans wages and hus increase he axes paid by hose same immigrans, based on re-search by he Fiscal Policy Insiue. Examining a number o sudies on immigran wages, his research consis-enly ound ha legal immigrans had higher wages han undocumened immigrans and gaining legal

14 See, or example, Manuel Orozco, Remitances o Lain America and he Caribbean: Issues and Perspecives on Developmen, Repor Commissioned by he Organizaion o American

Saes, Sepember 2004.

15See among ohers: Feinleib, Joel and David Warner, Te Impac o Immigraion on Social Securiy and he Naional Economy, Social Securiy Advisory Board, Issue Brie No. 1, Decem

ber 2005 (Available a www.ssab.gov/brie-1-immigraion.pd ); Singer, Paula and Linda Dodd-Major, Idenificaion Numbers and U.S. Governmen Compliance Iniiaives, ax Analyss

Special Repor, 2004; and Cornelius, Wayne and Jessica Lewis,Impacs o Border Enorcemen on Mexican Migraion: Te View fom Sending Communiies, La Jolla, Cali.: Universiy o

Caliornia a San Diego, Cener or Comparaive Immigraion Sudies, 2007.



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saus could boos wages anywhere beween 6 and 15 percen.16 A Congressional Budge Office repor onhe economic impac o immigraion reormesimaed he evenual wage boos o be 12 percen.17An analysisrom he Cener or American Progress esimaes ha he 5 million workers who would direcly benefi romhe presidens acion will see a wagepremium o 8.5 percen. 18Tis sudy assumes a conservaive esimae o a10 percen wage hike under graning legal saus o all 11 million undocumened immigrans and a 7.5 percenwage hike under he erms o he presidens execuive acions since he work saus would only be emporary.

An increase in income would also conribue o a sligh increase in he sales, propery, and income ax paymenso he currenly undocumened immigran populaion.

Personal income tax compliance:As explained above, curren esimaes o undocumened immigransincome ax compliance raes range rom 50 o 75 percen. o calculae he anicipaed income ax gain romallowing undocumened immigrans o work in he U.S. legally (under ull legal saus or he execuive acions),his analysis assumes ull compliance wih sae personal income ax laws pos-reorm given he srong incen-ives or ax compliance likely o be included in a comprehensive reorm measure. I is imporan o noe hahe same ax rules and provisions ha apply o he general populaion will apply o undocumened immigrans

filing income axes.

Earned Income ax Credit eligibility: Pos-reorm (or boh graning legal saus o all undocumened immi-grans via comprehensive reorm and under he execuive acions), he sudy assumes ha working immigransgraned he legal righ o live and work in he U.S. and who are oherwise eligible or he EIC will claim hecredi.

Tis analysis also assumes ha working immigrans meeing EIC eligibiliy crieria and graned he legal righ

o work under comprehensive immigraion reorm and he execuive acions will claim he sae versions o hecredi. Te saes wih permanen EICs included in his repor are: Caliornia, Colorado, Connecicu, Disrico Columbia, Delaware, Iowa, Illinois, Indiana, Kansas, Louisiana, Massachusets, Maryland, Maine, Michigan,Minnesoa, Nebraska, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Rhode Island, Virginia,Vermon, and Wisconsin. Tis sudy includes he impac o he newly enaced EIC in Caliornia and improve-mens made o EICs in Maine, Massachusets, New Jersey, and Rhode Island since he publicaion o he 2015repor.

16 Kallick, David Dyssegaard, Tree Ways Immigraion Reorm Would Make he Economy More Producive, Fiscal Policy Insiue, June 4, 2013 (see Appendix A: A Review o he

Lieraure on Legalizaion and Earnings). Available a: htp://fiscalpolicy.org/wp-conen/uploads/2013/06/3-ways-reorm-would-improve-produciviy.pd. See also his repor

mehodology secion or more inormaion on he wage effecs o graning legal saus o he enire undocumened populaion as well as he wage effecs on hose affeced by he

presidens execuive acions.

17Congressional Budge Office, Cos Esimae or S. 744 (Border Securiy, Economic Opporuniy, and Immigraion Modernizaion Ac), June 2013. Available a: htp://cbo.gov/sies/

deaul/files/cbofiles/atachmens/s744.pd

18Oakord, Parick and Philip E. Wolgin, Te Economic and Fiscal Benefis o Deerred Acion, 2014, Cener or American Progress. Available a: htps://www.americanprogress.org/

issues/immigraion/news/2014/11/21/102041/he-economic-and-fiscal-benefis-o-deerred-acion/

9 Institute on Taxation and Economic PolicyIFebruary 2016


12/24

Changes from ITEPs April 2015 Undocumented Immigrants State & LocalTax Contributions Report

Te analysis presened in his repor is an updae o an IEP repor published in 2015. Te 2016 repor uses 2013esimaes on he undocumened immigran populaion (size, income, homeownership, and populaion impacedby he execuive acions) whereas he 2015 repor used 2012 daa. Mos noably, he number o undocumened

immigrans declined by more han 400,000 beween 2012 and 2013, a decade-long rend ha has been well docu-mened amongs numerous researchers. Te decline in he undocumened immigran populaion and subsequenlylower aggregae income led o a small drop in he oal amoun o sae and local axes undocumened immigranspay in his sudy compared o he 2015 sudy.



13/24

Current $46,296,000 $10,748,000 $6,739,000 $63,783,000

Full Legal Status $50,925,000 $23,647,000 $7,412,000 $81,984,000

Current $1,590,000 $1,922,000 $3,512,000

Full Legal Status $1,749,000 $2,115,000 $3,863,000

Current $155,014,000 $17,552,000 $58,883,000 $231,450,000


Current $44,115,000 $6,790,000 $7,700,000 $58,605,000


Current $1,951,824,000 $155,623,000 $1,062,954,000 $3,170,401,00

Full Legal Status $2,147,006,000 $303,181,000 $1,169,250,000 $3,619,437,00

Current $79,453,000 $20,373,000 $34,756,000 $134,582,000


Current $67,193,000 $15,392,000 $53,649,000 $136,233,000


Current $4,393,000 $3,999,000 $3,574,000 $11,966,000


Current $16,605,000 $5,718,000 $4,760,000 $27,083,000

Full Legal Status $18,266,000 $9,656,000 $5,236,000$33,157,000

Current $454,050,000 $134,036,000 $588,086,000


Current $218,843,000 $63,457,000 $76,453,000 $358,753,000


Current $19,185,000 $6,024,000 $5,022,000 $30,231,000


Appendix 1: Detailed State and Local Tax Contributions of Total Undocumented Immigrant Populati

Current vs. Full Legal Status for All Undocumented Immigrants

Sales and Excise Tax

Total

Personal Income Tax

TotalProperty Tax Total

Total State and Lo

TaxesState Current vs. Full Legal Status

Alabama

Alaska No Income Tax

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Dist. of Col.

Florida No Income Tax

Georgia

Hawaii

11 Institute on Taxation and Economic Policy I February 2016


14/24




Total

Personal Income Tax


Total State and Lo


Current $15,537,000 $2,359,000 $8,352,000 $26,248,000


Current $344,326,000 $93,465,000 $305,497,000 $743,288,000


Current $53,794,000 $19,145,000 $16,314,000 $89,253,000


Current $21,709,000 $6,019,000 $9,653,000 $37,381,000


Current $43,982,000 $6,541,000 $18,755,000 $69,278,000


Current $20,981,000 $11,134,000 $5,253,000 $37,368,000


Current $46,877,000 $7,678,000 $6,505,000 $61,060,000


Current $2,568,000 $665,000 $1,111,000 $4,344,000


Current $153,958,000 $71,017,000 $83,079,000 $308,055,000


Current $87,506,000 $45,589,000 $68,274,000 $201,369,000


Current $45,416,000 $17,681,000 $20,736,000 $83,833,000


Current $45,493,000 $13,387,000 $18,186,000 $77,066,000


daho

llinois

ndiana

Maryland

Massachusetts

Michigan

owa

Kansas

Kentucky

Louisiana

Maine

Minnesota

Undocume


15/24




Total

Personal Income Tax


Total State and Lo


Current $16,666,000 $2,610,000 $2,595,000 $21,872,000


Current $28,068,000 $8,718,000 $11,487,000 $48,273,000


Current $663,000 $563,000 $981,000 $2,207,000

Full Legal Status $730,000 $1,238,000 $1,079,000 $3,047,000

Current $22,831,000 $4,048,000 $15,216,000 $42,096,000


Current $69,387,000 $21,648,000 $91,035,000


Current $2,172,000 $5,987,000 $8,205,000


Current $267,243,000 $49,370,000 $273,688,000 $590,302,000


Current $50,204,000 $3,950,000 $13,846,000 $67,999,000


Current $568,456,000 $182,416,000 $357,754,000 $1,108,625,00

Full Legal Status $625,301,000 $336,177,000 $393,529,000$1,355,008,00

Current $162,322,000 $59,173,000 $54,345,000 $275,840,000


Current $2,903,000 $161,000 $695,000 $3,759,000

Full Legal Status $3,194,000 $353,000 $764,000 $4,311,000

Current $47,519,000 $15,684,000 $21,654,000 $84,857,000


North Carolina

North Dakota

Ohio

New York

Mississippi

Missouri

New Jersey

New Mexico

Montana

Nebraska

Nevada No Income Tax

New Hampshire No Income Tax on Wages



16/24




Total

Personal Income Tax


Total State and Lo


Current $52,790,000 $9,693,000 $14,785,000 $77,268,000


Current $14,868,000 $28,340,000 $34,962,000 $78,169,000


Current $66,902,000 $34,169,000 $38,333,000 $139,404,000


Current $18,286,000 $4,081,000 $11,071,000 $33,438,000


Current $43,861,000 $10,563,000 $13,274,000 $67,697,000


Current $3,391,000 $861,000 $4,252,000

Full Legal Status $3,730,000 $947,000 $4,677,000

Current $88,060,000 $17,188,000 $105,277,000


Current $1,047,664,000 $494,733,000 $1,542,397,00

Full Legal Status $1,152,431,000 $544,206,000 $1,696,637,00

Current $39,131,000 $12,088,000 $15,883,000 $67,102,000


Current $1,990,000 $426,000 $1,502,000 $3,918,000

Full Legal Status $2,189,000 $701,000 $1,652,000 $4,543,000

Current $124,534,000 $56,756,000 $64,567,000 $245,857,000


Current $223,135,000 $69,034,000 $292,169,000


Tennessee

Virginia

Washington No Income Tax

No Income Tax on Wages

Texas No Income Tax

Utah

Vermont

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota No Income Tax

Undocume


17/24




Total

Personal Income Tax


Total State and Lo


Current $2,895,000 $883,000 $426,000 $4,204,000

Full Legal Status $3,184,000 $1,944,000 $468,000 $5,596,000

Current $41,762,000 $11,098,000 $28,002,000 $80,863,000


Current $2,936,000 $688,000 $3,625,000

Full Legal Status $3,230,000 $757,000 $3,987,000

Current $6,951,347,000 $1,095,221,000 $3,597,367,000 $11,643,936,0

Full Legal Status $7,646,482,000 $2,166,521,000 $3,957,104,000 $13,770,107,0

Change +$695,135,000 +$1,071,300,000 +$359,737,000 +$2,126,171,0

% Total Change 33% 50% 17%

Institute on Taxation and Economic Policy, A Distributional Analysis of the Tax Systems in All Fifty States, 5th Edition, January 2015. www.whopays.org

All States

West Virginia

Wisconsin

Wyoming No Income Tax



18/24

Current $19,933,000 $4,628,000 $2,901,000 $27,462,000

Executive Actions $21,428,000 $9,950,000 $3,119,000 $34,497,000

Current $475,000 $574,000 $1,049,000

Executive Actions $510,000 $617,000 $1,127,000

Current $79,856,000 $9,042,000 $30,334,000 $119,232,000


Current $22,875,000 $3,521,000 $3,992,000 $30,388,000


Current $979,772,000 $78,119,000 $533,579,000 $1,591,470,00

Executive Actions $1,053,255,000 $148,731,000 $573,598,000 $1,775,584,00

Current $40,695,000 $10,435,000 $17,802,000 $68,932,000


Current $24,886,000 $5,701,000 $19,870,000 $50,457,000


Current $1,797,000 $1,636,000 $1,462,000 $4,895,000


Current $4,649,000 $1,601,000 $1,333,000 $7,583,000

Executive Actions $4,998,000 $2,642,000 $1,433,000$9,073,000

Current $171,863,000 $50,734,000 $222,598,000

Executive Actions $184,753,000 $54,539,000 $239,292,000

Current $96,892,000 $28,095,000 $33,850,000 $158,837,000


Current $6,715,000 $2,109,000 $1,758,000 $10,581,000


Appendix 2: Detailed State and Local Tax Contributions of Undocumented Immigrant Population Impac

Current vs. Post Implementation of Executive Actions


Total

Personal Income Tax


Total State and Lo

TaxesState Current vs. Executive Actions

Alabama

Alaska No Income Tax

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Dist. of Col.

Florida No Income Tax

Georgia

Hawaii

Undocume


19/24




Total

Personal Income Tax


Total State and Lo


Current $9,021,000 $1,370,000 $4,849,000 $15,241,000


Current $173,158,000 $47,002,000 $153,631,000 $373,792,000


Current $24,872,000 $8,852,000 $7,543,000 $41,267,000


Current $9,974,000 $2,765,000 $4,435,000 $17,175,000


Current $22,330,000 $3,321,000 $9,522,000 $35,172,000


Current $8,392,000 $4,454,000 $2,101,000 $14,947,000


Current $14,063,000 $2,303,000 $1,952,000 $18,318,000


Current $767,000 $199,000 $332,000 $1,297,000

Executive Actions $824,000 $419,000 $357,000 $1,600,000

Current $53,522,000 $24,688,000 $28,882,000 $107,092,000


Current $30,745,000 $16,018,000 $23,988,000 $70,751,000


Current $19,197,000 $7,473,000 $8,765,000 $35,434,000


Current $21,342,000 $6,281,000 $8,532,000 $36,155,000


daho

llinois

ndiana

Maryland

Massachusetts

Michigan

owa

Kansas

Kentucky

Louisiana

Maine

Minnesota



20/24




Total

Personal Income Tax


Total State and Lo


Current $5,769,000 $904,000 $898,000 $7,571,000

Executive Actions $6,202,000 $1,943,000 $966,000 $9,110,000

Current $12,310,000 $3,824,000 $5,038,000 $21,172,000


Current $198,000 $168,000 $293,000 $659,000

Executive Actions $213,000 $361,000 $315,000 $889,000

Current $11,107,000 $1,969,000 $7,402,000 $20,479,000


Current $33,185,000 $10,353,000 $43,538,000


Current $649,000 $1,788,000 $2,450,000

Executive Actions $697,000 $1,922,000 $2,648,000

Current $102,907,000 $19,011,000 $105,389,000 $227,307,000


Current $25,819,000 $2,031,000 $7,121,000 $34,971,000


Current $216,367,000 $69,432,000 $136,169,000 $421,968,000


Current $72,143,000 $26,299,000 $24,153,000 $122,595,000


Current $867,000 $48,000 $207,000 $1,122,000


Current $19,466,000 $6,425,000 $8,870,000 $34,761,000


North Carolina

North Dakota

Ohio

New York

Mississippi

Missouri

New Jersey

New Mexico

Montana

Nebraska

Nevada No Income Tax

New Hampshire No Income Tax on Wages

Undocum


21/24




Total

Personal Income Tax


Total State and Lo


Current $24,416,000 $4,483,000 $6,838,000 $35,736,000


Current $7,628,000 $14,540,000 $17,937,000 $40,104,000


Current $25,088,000 $12,813,000 $14,375,000 $52,277,000


Current $7,429,000 $1,658,000 $4,498,000 $13,584,000


Current $17,721,000 $4,268,000 $5,363,000 $27,352,000


Current $1,012,000 $257,000 $1,269,000

Executive Actions $1,088,000 $276,000 $1,365,000

Current $36,260,000 $7,078,000 $43,349,000


Current $533,851,000 $252,097,000 $785,948,000


Current $21,572,000 $6,664,000 $8,756,000 $36,992,000


Current $594,000 $127,000 $448,000 $1,170,000


Current $45,377,000 $20,680,000 $23,527,000 $89,583,000


Current $109,380,000 $33,840,000 $143,220,000


Tennessee

Virginia

Washington No Income Tax

No Income Tax on Wages

Texas No Income Tax

Utah

Vermont

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota No Income Tax



22/24




Total

Personal Income Tax


Total State and Lo


Current $864,000 $264,000 $127,000 $1,255,000


Current $19,232,000 $5,111,000 $12,896,000 $37,239,000


Current $877,000 $205,000 $1,082,000

Executive Actions $942,000 $221,000 $1,163,000

Current $3,189,881,000 $470,356,000 $1,648,645,000 $5,308,882,00

Executive Actions $3,429,122,000 $912,671,000 $1,772,293,000 $6,114,086,00

Change +$239,241,000 +$442,315,000 +$123,648,000 +$805,204,000

% Total Change 30% 55% 15%

Institute on Taxation and Economic Policy, A Distributional Analysis of the Tax Systems in All Fifty States, 5th Edition, January 2015. www.whopays.org

All States

West Virginia

Wisconsin

Wyoming No Income Tax

Undocume


23/24

STATEEstimated Total Undocumented

Immigrant Population1

Est. Share of Undocumented

Immigrant Population who are

Homeowners2

Average Undocumented Family

Income3

Est. Executive Action Impacted

Undocumented Immigrant

Population4

Share of Total Undocume

Population

Alabama 72,000 30% $28,300 31,000 43%

Alaska 6,000 33% $30,100 1,800 30%

Arizona 264,000 38% $25,000 136,000 52%

Arkansas 54,000 39% $27,300 28,000 52%

California 3,034,000 27% $29,900 1,523,000 50%

Colorado 164,000 33% $28,200 84,000 51%

Connecticut 108,000 26% $34,700 40,000 37%

Delaware 22,000 29% $32,200 9,000 41%

Dist. of Col. 25,000 22% $34,200 7,000 28%Florida 605,000 34% $30,300 229,000 38%

Georgia 393,000 33% $28,500 174,000 44%

Hawaii 20,000 42% $38,600 7,000 35%

daho 31,000 46% $26,900 18,000 58%

llinois 519,000 39% $31,800 261,000 50%

ndiana 93,000 39% $27,100 43,000 46%

owa 37,000 39% $29,200 17,000 46%Kansas 65,000 44% $29,700 33,000 51%

Kentucky 45,000 22% $26,700 18,000 40%

Louisiana 60,000 20% $29,800 18,000 30%

Maine 5,000 33% $30,100 1,500 30%

Maryland 233,000 35% $36,400 81,000 35%

Massachusetts 185,000 23% $34,800 65,000 35%

Michigan 97,000 40% $28,400 41,000 42%Minnesota 81,000 36% $29,200 38,000 47%

Mississippi 26,000 22% $25,700 9,000 35%

Missouri 57,000 39% $28,400 25,000 44%

Montana 4,000 33% $30,100 1,200 30%

Nebraska 37,000 38% $29,000 18,000 49%

Nevada 138,000 33% $30,100 66,000 48%

Appendix 3: Data Used to Estimate State and Local Tax Contributions of Undocumented Immigrants

EXECUTIVE ACTION IMPACTED POPULATIONTOTAL UNDOCUMENTED IMMIGRANT POPULATION



24/24

STATEEstimated Total Undocumented

Immigrant Population1

Est. Share of Undocumented

Immigrant Population who are

Homeowners2

Average Undocumented Family

Income3

Est. Executive Action Impacted

Undocumented Immigrant

Population4

Share of Total Undocume

Population

Appendix 3: Data Used to Estimate State and Local Tax Contributions of Undocumented Immigrants

EXECUTIVE ACTION IMPACTED POPULATIONTOTAL UNDOCUMENTED IMMIGRANT POPULATION

New Hampshire 10,000 33% $30,100 3,000 30%

New Jersey 509,000 24% $34,500 196,000 39%

New Mexico 70,000 46% $24,300 36,000 51%

New York 867,000 19% $32,800 330,000 38%

North Carolina 342,000 33% $27,100 152,000 44%

North Dakota 4,000 33% $30,100 1,200 30%

Ohio 83,000 29% $29,300 34,000 41%

Oklahoma 80,000 37% $28,300 37,000 46%

Oregon 115,000 30% $27,900 59,000 51%Pennsylvania 136,000 33% $31,300 51,000 38%

Rhode Island 32,000 23% $31,400 13,000 41%

South Carolina 99,000 29% $28,400 40,000 40%

South Dakota 4,000 33% $30,100 1,200 30%

Tennessee 119,000 28% $26,300 49,000 41%

Texas 1,464,000 42% $27,700 746,000 51%

Utah 78,000 40% $28,700 43,000 55%Vermont 4,000 33% $30,100 1,200 30%

Virginia 247,000 33% $35,200 90,000 36%

Washington 204,000 33% $30,400 100,000 49%

West Virginia 5,000 33% $30,100 1,500 30%

Wisconsin 76,000 34% $29,600 35,000 46%

Wyoming 5,000 33% $30,100 1,500 30%

All States 11,022,000 33% $30,100 5,044,000 46%

Ibid.

Ibid.

Ibid

Migration Policy Institute (MPI) analysis of U.S. Census Bureau data from the 2009-2013 ACS pooled, and the 2008 Survey of Income and Program Participation (SIPP) by Colin Hammar and James Bachmeier of Temple University and Jennifer Van Hook of Th

ennsylvania State University, Population Research Institute.

Documents

Undocumented Immigrants' State and Local Tax Contributions