Because misinformation is frequently circulated as fact when it comes to the immigration debate, the Rhode Island Catholic will regularly feature facts dispelling commonly-heard misconceptions about undocumented immigrants. This week we look at the issue of taxes.
Accusation: Undocumented immigrants do not pay taxes.
Actuality: In fact, undocumented immigrants pay billions of dollars in sales, property and income taxes each year. Legal and undocumented immigrants pay sales taxes and property taxes each year (rent or home ownership). Between one-half and three-quarters of undocumented immigrants pay federal and state income taxes, Social Security taxes, and Medicare taxes.
According to the Social Security Administration (SSA), undocumented workers pay as much as $7 billion in Social Security and Medicare taxes each year. This is placed in an “Earnings Suspense Fie,” an account used by SSA for returns without accurate social security numbers. It has been estimated that, since 1984, undocumented immigrants have contributed as much as $520 billion to this account.
Perhaps the most telling evidence that undocumented workers pay taxes is that they were legally barred from receiving tax rebates under the 2008 economic stimulus package passed by Congress.
In policy terms, it is rational to argue for a legalization of the undocumented workforce so that all would pay into the income tax system, not just one-half. It is in the nation’s fiscal interest to legalize these workers, so that they can file tax returns without fear and fully participate in the economy.