Friday, 30 August 2013

Illegal Immigrants Will Expand Tax Base

If undocumented immigrants are allowed to work legally it would boost the US state and local tax contributions by an estimated $2 billion annually. The Institute on Taxation and Economic Policy (ITEP) says that the country's 11.2 million undocumented immigrants or tax immigrants collectively contribute $10.6 billion in state and local taxes (as in 2010) through sales and excise taxes, also via property and income taxes. The number could jump to more than $12.6 billion.

If the undocumented immigrants if allowed to work would pay more in state income tax and participate fully in federal, state and local tax systems. ITEP study indirectly says that legalization would allow the undocumented workers to have better bargain with employers and increase their income and tax contributions.

The controversial Immigration reforms currently before Congress would grant the legal right to work many unauthorized U.S. workers. All leading research reports say that a change would prove economically beneficial.

Leading Studies

Congressional Budget Office study argues that immigration reform bill would reduce the deficit by $197 billion over the next decade.

Brookings Institution's Hamilton Project found an increase in immigrant workers may lead high wages for U.S workers. Majority of Americans argue that granting legal status to undocumented immigrants would do good for the economy and country.

Immigration Tax is the economic impact of legalizing 11 million immigrants who entered the country illegally. Upon naturalization they will be required to pay back taxes. This was the main stumbling blocks keeping conservative lawmakers from backing the path to citizenship.

A study shows that the economic impact of legalizing immigrants is a positive one and not a financial drain. By giving immigrants a chance to work legally in the U.S. state and local revenues will spurt by $2 billion a year. The income tax flows would increase by $1.6 billion, sales tax contributions by $420 million and immigrants will pay an additional $76 million in property taxes. 

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