“Undocumented immigrants contribute significantly to state and local taxes, collectively paying an estimated $11.64 billion a year. Contributions range from almost $2.2 million in Montana with an estimated undocumented population of 4,000 to more than $3.1 billion in California, home to more than 3 million undocumented immigrants.
Undocumented immigrants nationwide pay on average an estimated 8 percent of their incomes in state and local taxes (this is their effective state and local tax rate). To put this in perspective, the top 1 percent of taxpayers pay an average nationwide effective tax rate of just 5.4 percent.
Granting legal status to all undocumented immigrants in the United States as part of a comprehensive immigration reform and allowing them to work legally would increase their state and local tax contributions by an estimated $2.1 billion a year. Their nationwide effective state and local tax rate would increase to 8.6 percent.
The state and local tax contributions of the undocumented immigrants who could be directly impacted by President Obama’s 2012 and 2014 executive actions would increase by an estimated $805 million a year once fully in place. The effective state and local tax rate for this population would increase from 8.1 to 8.6 percent. State and local revenue gains from the executive actions are smaller than gains from granting legal status to all undocumented immigrants because the actions (if upheld) would only affect around 46 percent of the undocumented population and the actions do not grant a full pathway to lawful permanent residence or citizenship.”Feb. 2016