Taxes and Spending Power
The contributions immigrants make as both taxpayers and consumers are indispensable to the U.S. economy. Nationally, immigrants earned $1.3 trillion in 2014 and contributed $105 billion in state and local taxes and almost $224 billion in federal taxes. This left them with nearly $927 billion in spending power, which they frequently used to purchase goods and services, stimulate local business activity, and create jobs in the broader U.S. economy.
Adding ‘One More at the Table’ Reaps Rewards, Says Financial Advisor
When Colleen Beckemeyer was growing up in St. Louis, family Thanksgivings had an international flair. Her father was a professor of finance at St. Louis University and made a point of inviting students from places like Spain, Thailand, and Hong Kong to join them for dinner. “They were always so gracious… Read More
Immigrants Want the Opportunity to Work for Their Families, Texas Judge Says
Armando Rodriguez, a Mexican-American from Houston’s rough-and-tumble Fifth Ward, has had a career marked by many firsts. He was the first person in his family to become a lawyer — though all of his siblings graduated from college. And after being elected in 1974 as a justice of the peace… Read More
Mexican Contractor Started From Scratch, Now Builds Jobs
In August 2017, Salvador Ayala fulfilled a lifelong dream. The Bucks County, Pennsylvania, business owner purchased a house for his family — in cash. “That was a huge accomplishment for me,” says Ayala, a former undocumented immigrant from Mexico, who now owns Sal Home Improvement, a painting and remodeling company… Read More
Student Cried for Joy the Day DACA Announced, Now She’s Fighting to Preserve it
Jessica Moreno Cacho is not only a Dreamer — she’s a doer. She was brought to the United States undocumented from her native Peru by her parents when she was just 8 years old. Her dad had been out of work for more than a year, and crime rates were… Read More
Young Advocate: Without Newcomers, Economy Would Not Survive
After his father’s cancer returned in 2016, Phillip Germain, then 18 and a college student, took care of him. It was a pivotal moment for the young man. His father’s care was contingent upon affordable healthcare through the Affordable Care Act, Medicare, and Social Security. In short: public policy decisions… Read More
Korean Immigrant Joins City Council to Fight for North-Atlanta Businesses
When John Park, a resident of Brookhaven, Georgia, saw that his neighbors’ interests were being overlooked by local officials, he decided to take action. “The city government was skewed too much toward business interests and not the people who live here,” says Park, who works full time as a disease surveillance specialist… Read More
Without DACA, University Graduate Could Wait Decades to Legally Work in U.S.
Marisol Estrada, an undocumented immigrant from Mexico, has lived in the United States since she was 5 years old. With a dream to enter the legal profession, she studied hard, choosing at her Savannah, Georgia, high school to take the International Baccalaureate, a two-year, rigorous college preparatory program recognized by… Read More
Greenville, South Carolina, Chamber Lobbies Congress to Let Dreamers Stay
Carlos Phillips, CEO of the Greenville Chamber of Commerce, says most of his chamber’s 2,200 businesses support federal action to protect Dreamers, the young people eligible for Deferred Action for Childhood Arrivals (DACA). These undocumented immigrants — brought to the country as children, raised and educated here — are an… Read More
DACA Recipient Fears Losing Ability to Support Her Younger Siblings
When Blanca Carrillo Salmeron, an undocumented immigrant in Norman, Oklahoma, received protection from deportation under the Deferred Action for Childhood Arrivals (DACA) order in 2013, a year after it was signed, the whole family breathed a sigh of relief. Carrillo Salmeron’s parents were also undocumented, and they had four other… Read More
Iraq War Vet: Immigrants Critical to Fargo’s Growth
Around the 2016 presidential election, when some politicians in North Dakota introduced anti-immigration bills, the Fargo City Council and local business community pushed back. The reason: The city’s economic health depends on new Americans. “We have between 5,000 and 8,000 open jobs in Fargo-Moorhead, and we can’t honestly afford to… Read More
Household Income of Immigrants
In 2014, more than 72 percent of foreign-born population in the United States was working-aged, compared to less than half of U.S.-born residents. This reality allowed immigrants to earn well over a trillion dollars of income in 2014—a greater amount than their portion of the U.S. population overall.
Tax Contributions
A notable portion of the income earned by immigrants each year funnels directly back to our government in the form of tax revenues. In some states, immigrants contribute more than one out of every four tax dollars paid by local residents each year—supporting taxpayer-funded services like public schools and police departments.
States Where Immigrants Contributed the Largest Share of Total Tax Revenues, 2014
Spending Power
Spending power is the disposable income left to households after deducting their annual tax contributions. The $9.3 billion in total spending power held by immigrant led households in 2014 allowed them to hold considerable power as consumers. By spending on goods and services, immigrants strengthen the U.S. economy and provide jobs to American workers as well as the businesses dependent upon paying customers.
Foreign-Born Population’s Amount and Share of Spending Power by State, 2014
Medicare and Social Security
Our Social Security and Medicare programs are already facing serious financial challenges—a pattern expected to worsen as large numbers of Baby Boomers retire and leave the workforce altogether. While the United States had roughly 16 workers paying into our entitlement programs for every one retiree in 1950, that number is projected to drop to just two workers for every retiree by 2035.1 Immigrants are already playing an important role supplementing our entitlement programs: One NAE study found that between 1996 and 2011 immigrants contributed $182.4 billion more to Medicare’s Hospital Insurance Trust Fund—the core trust fund in the program—than was expended on their care.
Sources:
1 “10 Truths About America’s Entitlement Programs, Address by R. Bruce Josten Executive Vice President of Government Affairs U.S. Chamber of Commerce,” U.S. Chamber of Commerce, accessed September 21, 2016. Available online.
Bolstering the Housing Market
By purchasing homes in neighborhoods formerly in decline, immigrants in recent decades have had a positive impact on U.S. housing values overall. From 2000 to 2010, each of the 40 million immigrants in the United States added, on average, 11.6 cents to the value of a home in their local county. That seems small, but it adds up. In fact, it resulted in immigrants growing U.S. housing wealth by $3.7 trillion during that period.2 Immigrants are also expected to play a key role buying up homes as baby boomers downsize in the coming years: Almost 30 percent of American homeowners were older than age 65 in 2014.
Sources:
2 Jacob Vigdor, “Immigration and the Revival of American Cities,” New American Economy, 2013 Available online.
Immigrant Subgroups
Regardless of where the immigrants came from, they contribute a tremendous amount of money to the U.S. economy as taxpayers and consumers. In this section, we show the amount earned and contributed in taxes by different ethnic and national origin groups within the foreign-born population.
Taxes & Spending Power of Major Immigrant Subgroups
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