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Undocumented Immigrants Paying Taxes?

In terms of the President’s income taxes, Twitter (and other more mainstream media)[1] has been of course alight with all sorts of buzz as to how much you pay in income taxes relative to the President, how much I pay, and so on.  But the one Tweet that did catch my eye, and it quickly became more than one, is how much in income taxes undocumented immigrants pay to the federal government each and every year.  According to this Tweet (and it was from someone who I do not follow, but who was re-tweeted by someone I do follow), undocumented immigrants paid $27,000,000,000.00 in taxes in 2017. (I have no idea whether this Tweet is factually accurate.)  President Trump, according to the New York Times’ article, paid a mere $750.00 in federal income taxes.  So I’ve done some digging.

Let me paint a picture for you.  Often I will have a potential client in my office who is looking for a way to lawfully stay in the United States.  While assessing his or her circumstances, more often than not they will tell me that they’ve worked in the United States for a number of years (sometimes many many years) and have always paid taxes.  They’re also able to document that for me too.  They pay taxes for any number of reasons, including just wanting to do the right thing.

 Undocumented immigrants pay taxes either using an Individual Taxpayer Identification Number (“ITIN”), which over the years has evolved in terms of who was eligible to obtain one.  Some, of course, use other people’s Social Security Numbers.  Some use fake Social Security Numbers.  The takeaway, however, is that they’re paying taxes into a system that most will not get any benefit from.

Current data is difficult to come by.  In a 2014 Internal Revenue Service (“IRS”) Nationwide Tax Forum, the IRS estimated that individuals using ITIN’s paid over $9 billion in withheld payroll taxes annually. According to the IRS, in 2015, 4.4 million people paid $23.6 billion in total taxes using an ITIN.[2] Because undocumented pay into a system that they are not eligible to collect benefits from when they retire, in 2010, $12 billion more was collected from Social Security payroll taxes of undocumented workers than were paid out in benefits.[3]

 According to the Institute on Taxation and Economic Policy (“ITEP”), undocumented immigrants paid $11.6 billion in state and local taxes in 2013, which includes $7 billion in sales taxes, $1.1 billion in state income taxes, and $3.6 billion in property taxes.[4]

 The clear take away is that undocumented immigrants are paying a substantial amount of incomes taxes (both state and federal), as well as other types of taxes too (e.g., property taxes, sales tax, etc.), including, according to one report, tens of thousands of dollars by prior employees of one or more of Trump’s own companies.[5]

We can debate all day long whether the President’s position that he’s practicing smart tax avoidance, using lawful means to deduct legitimate business expenses, losses, etc., is appropriate.  There is, however, something that does not sit well with me (anyway) when undocumented immigrants are paying so much into a system that they will likely never benefit from, and our President is paying in so little.

Let that sink in.


[1] See, e.g., https://www.washingtonpost.com/nation/2020/09/28/trump-taxes-returns-comparisons/.

[2] National Taxpayer Advocate, Annual Report to Congress, Vol. 1, Internal Revenue Service, 2015, 199-200, https://taxpayeradvocate.irs.gov/Media/Default/Documents/2015ARC/ARC15_Volume1.pdf.

[3] “Effects of Unauthorized Immigration on the Actuarial Status Of the Social Security Trust Funds,” by Stephen Goss, Alice Wade, J. Patrick Skirvin, Michael Morris, K. Mark Bye, and Danielle Huston (Actuarial Note, No. 151, April 2013),  Social Security Administration, Office of the Chief Actuary, Baltimore, Maryland.

[4] “Undocumented Immigrants’ State & Local Tax Contributions”, by  Lisa Christensen Gee, Matthew Gardner, and Meg Wiehe, Washington, DC: Institute on Taxation and Economic Policy, February 2016, http://www.itep.org/pdf/immigration2016.pdf, p. 2.

[5] See, e.g., https://www.nydailynews.com/news/politics/ny-undocumented-trump-workers-paid-taxes-20200930-xjak5swyq5hjnnuop5cu7ipal4-story.html


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ABOUT THE CONTRIBUTOR

David W. Meyers, Esq. is managing partner of Meyers & Meyers, LLP. David works with individuals, businesses and higher education institutions helping them resolve any issues regarding immigration, citizenship and naturalization for themselves or their employees.

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