Undocumented workers often are criticized as a burden on the state and the nation, and presidential campaign debate has spurred controversy regarding the issue.
However, a recent report maintains these workers contribute $794 million in tax payments to Illinois government. According to Undocumented Immigrants' State & Local Tax Contributions, authored by the non-profit Institute on Taxation and Economic Policy, undocumented immigrants contribute significantly to state and local taxes, collectively paying an estimated $11.84 billion in 2012.
Contributions ranged from less than $3.2 million in Montana, with an estimated undocumented population of 6,000 to more than $3.2 billion in California, home to more than 3.1 million undocumented immigrants. Undocumented immigrants’ nationwide average effective state and local tax rate (the share of income they pay in state and local taxes) in 2012 is an estimated 8 percent. The top 1 percent of taxpayers pay an average nationwide effective tax rate of just 5.4 percent.
Granting lawful permanent residence to all 11.4 million undocumented immigrants and allowing them to work in the United States legally would increase their state and local tax contributions by an estimated $2.2 billion a year, the institute estimated. Their nationwide effective state and local tax rate purportedly would increase to 8.7 percent, which would align their tax contributions with economically similar documented taxpayers.
To read the study, visit https://www.scribd.com/doc/289149523/Undocumented-Immigrants-State-Local-Tax-Contributions#download.