A just-released Institute on Taxation and Economic Policy report estimates that undocumented immigrants in Texas collectively paid $1.5 billion in property, sales, and excise taxes in 2012. (For other states that have a personal income tax, ITEP estimates that amount as well.)
Today’s ITEP report points out that, “[l]ike other people living and working in the United States, undocumented immigrants pay state and local taxes. In addition to paying sales and excise taxes when they purchase goods and services (for example, on…clothing and gasoline) undocumented immigrants also pay property taxes directly on their homes or indirectly as renters.”
Texas’ state and local tax system relies heavily on consumption taxes and property taxes—taxes that nearly everyone pays, regardless of immigration status or citizenship. This means that undocumented immigrants in Texas are even more likely than those in other states to pay the same taxes as any other Texas resident.
The ITEP report also estimates the effective tax rate undocumented immigrant families pay, or their taxes as a share of their annual income. In Texas, the effective tax rate is 8.7 percent, higher than the U.S. average of 8.0 percent. Given the unfair and regressive nature of Texas’ tax system, it’s no surprise that Texas immigrants’ effective tax rate is higher than the national average.
When you hear talk of Texas being an engine of job growth and the best place to do business, remember that undocumented immigrants have contributed to the success story of Texas. And regardless of their citizenship or immigration status, immigrants pay Texas state and local taxes, and help pay for schools, colleges, roads, parks, libraries, and other public services that we all use or from which we all benefit.