Undocumented Immigrants Paid $1.5 Billion+ in Texas Taxes

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Brakeyshia Samms, State Policy Fellow

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.

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.

3 Comments

  • In 2013, illegal immigration cost Texas taxpayers about $12.1 billion annually. If we subtract out the tax dollars they pay this comes out to about $10 billion dollars. So no they are not helping to pay for schools, colleges, roads, parks, libraries, and other public services, they are taking $10 billion dollars a year away from those services. You are cherry picking evidence to support your narrative, you purposefully left out the fact that they take about 10 times the amount of money that they put back into the system and then used your half truth to deduce a falsehood that they are helping to pay for public services.

    ardc 09.05.2015
  • Source on annual cost of illegal immigration:
    http://www.fairus.org/DocServer/research-pub/TexasCostStudy_2014.pdf

    ardc 09.05.2015
  • @ardc you’re missing the point. Undocumented immigrants would contribute way more in taxes if they had a path to legal citizenship, because then they wouldn’t have to work under the table. People use the argument that immigrants are a drain on the economy, but in reality a lot of industries (especially agriculture and services) would be hard hit without the presence of the undocumented — this is a reality that isn’t captured in a simple analysis of net tax expenditures. It’s always interesting to me that people rail against immigrants for using more services than they pay in taxes while ignoring the fact that the same is true for the majority of states in the country:

    http://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/

    DiscoStu 12.05.2015

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