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.
Ecuadoran Businessman Helps New Americans Prosper in Northern California
As executive director of Canal Alliance, a nonprofit in San Rafael, California, Omar Carrera leads work that helps some 5,000 new Americans a year successfully integrate into their new country. “We can save lives because we can break the cycle of poverty, one family at a time,” says Carrera. who… Read More
Economic Impact of Dreamers is Tremendous, Says South Carolina Lawyer
In 1980, when Marie-Louise Ramsdale was 10 years old, her father, a metallurgical engineer, got a job in America and relocated the family from Britain to South Carolina. Ramsdale suffered from culture shock — “I had no idea what pizza was,” she says — but settled in quickly, thriving at… Read More
Florida Dreamer: Americans Do Not Understand How Complicated Immigration Process Is
In 2000, Juan Escalante’s parents fled the violence of their native Venezuela. His mother and father, owners of a small print shop, were subject to targeted carjackings and death threats. Finally, enough was enough. They wanted safety for their three young children. So, in search of a better life, they… Read More
Instructional Designer Knows the Value of a Diverse Workforce
In a global economy, businesses depend on international talent, says Fredeswinda Collazo, an instructional designer and former corporate learning officer. “The most successful companies are growing their talent from within and are inclusive of all cultures,” she says. Collazo, who was born in Puerto Rico, has always been a U.S. Read More
Arkansas Accountant: Immigrants Pay A Lot Into Local Economies
As the owner of All Services Consulting in Hot Springs, Arkansas, Jacquelynn Cadena helps immigrant entrepreneurs run their businesses efficiently and profitably. She advises them on bookkeeping, insurance, and filing taxes — whatever clients need to best serve their customers and the local economy. With hundreds of clients since she… Read More
Banker Overseeing Billions While Awaiting Citizenship Says Process Needs Repair
Arindam Majumdar has an engineering degree from India, an MBA in corporate finance and investments from the University of Iowa, and is pursuing a graduate degree in banking from the ABA Stonier Graduate School of Banking and a Wharton Leadership Diploma from the University of Pennsylvania. He has worked at… Read More
Iraqi Military Interpreter Yearns to Serve U.S. Through Teaching
Safwat Al Baali is grateful for his housekeeping job at the Cosmopolitan Hotel, on the glittery Las Vegas strip. After scraping by for seven months upon receiving political asylum, he is thrilled to be averaging $17.25 an hour with tips. “My life is so good now,” he says. Al Baali… Read More
By Helping New Immigrants, Argentinian Helps Washington State
When Mabel Lorenzi arrived in the United States from Uruguay to pursue a master’s degree in biochemistry in 1968, she received a warm welcome that helped her overcome the challenges of being a new immigrant. Lorenzi was a Fulbright Scholar, a program run by the U.S. Department of State to… Read More
Russian Immigrant Builds a School for Newcomers to Strengthen America
Andrey Dolbinin came to the United States from Russia as a college student in 1997. Now he is helping new arrivals adapt, while still maintaining ties to their culture. In 2003, he founded a private bilingual school called Slavic Christian Academy. “I saw the youngest students getting discouraged when they… 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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