As immigration policy discussions remain prominent in public discourse, a new national study from the Institute on Taxation and Economic Policy (ITEP) has found that undocumented immigrants in Florida paid over $1.8 billion in state and local taxes in 2022. This figure could rise to approximately $2 billion if these taxpayers were granted work authorization.
The study also revealed that in Florida and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households within their borders.
“Due in large part to Florida’s upside-down tax code, immigrants without a documented status pay 7.9 percent of their income, on average, to state and local taxes, while the wealthiest 1 percent of state residents pay just 2.7 percent,” said Alexis Tsoukalas, PhD, senior policy analyst at Florida Policy Institute (FPI). “Think about that for a moment — hundreds of thousands of everyday people contributing more than their share to public services they cannot even access; meanwhile, those with the most to give — and who benefit the most — are contributing the least of their income.”
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, senior policy analyst at ITEP and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
In Florida, 57.5 percent of the taxes paid by undocumented immigrants come from sales and excise taxes; 39.3 percent from property taxes; roughly 2 percent from business income taxes; and 1.2 percent from other taxes.
Other key findings include:
- Nationally, undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. Of this amount, $37.3 billion went to state and local governments.
- For every one million undocumented immigrants residing in the country, public services receive $8.9 billion in additional tax revenue. Conversely, for every one million undocumented immigrants deported, public services stand to lose $8.9 billion in tax revenue.
- Providing work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year to a total of $136.9 billion.
- Federal income tax payments by undocumented immigrants are affected by laws requiring them to pay more than similarly situated U.S. citizens; for example, they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. However, many states have made their versions of these credits more immigrant-inclusive recently.
While this study is the most comprehensive analysis of taxes paid by undocumented immigrants so far, it does not attempt to quantify broader impacts resulting from increased economic activity created by these individuals. Considering those economic ripple effects would likely reveal an even larger significance for public revenue contributed by undocumented immigrants.
This study serves as another reminder that undocumented immigrants contribute significantly to state economies and shared public services and highlights how future immigration policy choices will have substantial consequences for public revenue.