Immigration Reform Generates Revenue

State and local tax contributions of undocumented immigrants in Virginia would increase 42 percent to $259.6 million from $183 million under immigration reform, according to a new report released today by the Institute on Taxation and Economic Policy. Nationally, state and local contributions would increase by more than $2 billion.

According to the report, the boost comes mostly from allowing the 11.2 million undocumented immigrants to work legally and fully participate in the economy, including requiring them to pay state personal income taxes.

Undocumented immigrants already contribute substantially to Virginia’s economy through state income, sales, excise, and local property taxes – over 6 percent of their income. But as ITEP’s new report shows, the effect of immigration reform should boost incomes, increasing the amount subject to state personal income tax and increasing the amount spent in the local economy.

As immigration reform works its way through Congress, this latest data shows what we all know: that undocumented immigrants are supporting the state and local communities, and immigration reform would only boost the tax payments that flow directly back to funding Virginia’s roads, schools, hospitals, and police officers.

–Sookyung Oh, Policy Analyst