While political debates focus on border security and mass deportations, a new report from the Institute on Taxation and Economic Policy (ITEP) highlights an uncomfortable truth: undocumented immigrants contribute significantly to the U.S. economy, yet they receive little in return.

According to ITEP, undocumented immigrants paid a staggering $96.7 billion in federal, state, and local taxes in 2022. That’s more than the tax contributions of some of the wealthiest corporations and individuals in the country. Despite this, they remain ineligible for key social programs funded by their own tax dollars.

Undocumented Immigrants Pay More in Taxes Than Some Billionaires and Corporations

The idea that undocumented immigrants drain public resources is a political talking point, not a reality. According to a 2024 analysis by Americans for Tax Fairness (ATF), these immigrants actually pay a higher tax rate than some of America’s richest individuals and largest corporations.

  • In 2022, undocumented immigrants paid a federal tax rate of 5.27%—higher than what some ultra-wealthy Americans pay, according to ProPublica’s tax data.
  • At the state and local levels, undocumented immigrants paid an effective tax rate of 10.1%, higher than the 7.2% rate paid by the top 1% of earners.
  • Despite their contributions, undocumented workers are barred from receiving benefits like Social Security, Medicare, and unemployment insurance—even though they paid $33.9 billion into these programs in 2022.

Meanwhile, corporations like Tesla and some Fortune 500 companies collectively paid 90% less in federal taxes than undocumented workers did, ATF reported. Yet, political rhetoric continues to paint these immigrants as an economic burden.

Undocumented Immigrants Pay Taxes—But Don’t Get the Benefits

For undocumented immigrants, the U.S. tax system is a one-way street. They pay in, but they don’t get much, if anything, in return.

According to ITEP:

  • $25.7 billion went to Social Security—yet undocumented immigrants are ineligible to collect benefits.
  • $6.4 billion went to Medicare—another program they’re barred from accessing.
  • $1.8 billion went to unemployment insurance taxes—even though they don’t qualify for benefits if they lose their jobs.

At the state and local levels, the majority of their tax contributions come from sales and excise taxes ($15.1 billion), property taxes ($10.4 billion), and income taxes ($7.0 billion). These payments help fund public services like schools, emergency response, and infrastructure—services that benefit all U.S. residents, regardless of immigration status.

Six States Rely Heavily on Undocumented Immigrant Tax Revenue

A handful of states see significant tax contributions from undocumented workers. According to ITEP, six states received more than $1 billion in tax revenue from undocumented immigrants in 2022:

  1. California: $8.5 billion
  2. Texas: $4.9 billion
  3. New York: $3.1 billion
  4. Florida: $1.8 billion
  5. Illinois: $1.5 billion
  6. New Jersey: $1.3 billion

These states, particularly those with large immigrant populations, depend on undocumented workers to help fund essential services. Despite this reliance, political leaders in these states continue to push anti-immigrant policies.

Mass Deportations Could Cripple the U.S. Economy

Donald Trump’s proposed mass deportations could have devastating consequences—not just for undocumented immigrants but for the U.S. economy. According to an analysis cited by AZ Central, deporting millions of workers could shrink the economy by $1.1 to $1.7 trillion—a collapse even worse than the 2008 financial crisis.

Undocumented immigrants make up nearly 5% of the total U.S. workforce and are essential to industries like agriculture, construction, and hospitality. If they were removed from the labor force, businesses would struggle to fill positions, wages would rise sharply, and supply chains would be disrupted.

“Undocumented workers play a crucial role in our communities and contribute positively to the economy,” said David Kass, executive director of Americans for Tax Fairness.

Work Authorization Could Increase Tax Revenue by $40 Billion

Instead of mass deportations, ITEP’s report suggests that providing work authorization to undocumented immigrants would boost tax revenue by $40.2 billion annually.

  • $33.1 billion would go to the federal government
  • $7.1 billion would go to states and localities

Work authorization would not only increase tax compliance but also raise wages, leading to higher income tax payments. With legal status, undocumented immigrants could contribute even more to the economy—without the fear of deportation.

The Bottom Line: The U.S. Needs Undocumented Immigrants

The numbers don’t lie. Undocumented immigrants are economic contributors, not burdens. They pay billions in taxes, often at higher rates than wealthy Americans and corporations. Yet, they remain scapegoats in political debates while being denied the very benefits their tax dollars support.

As Kass put it, “Without undocumented immigrants, this country would collapse. They keep the economy running, yet they’re constantly blamed for problems they didn’t create.”

If the government truly wants to strengthen the economy, mass deportations aren’t the answer—fair immigration policies are.

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