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.
Think Policy Not Politics for Smart Immigration Reform, Says Professor
University of Houston political science professor Jeronimo Cortina is very optimistic about the future of race relations in this country — an outlook he says was inspired by his students. “Everyone sees themselves as equals,” says Cortina, who immigrated to the United States from Mexico in 2001. “They are used… Read More
New Jersey Town Re-elects — and Re-elects and Re-elects — its Muslim Immigrant Mayor
When Mohamed Khairullah arrived in America at age 16, he had to carry around an Arabic-English dictionary to figure out what his teachers and classmates were saying. Today Khairullah is the mayor of Prospect Park, New Jersey, a township with 5,600 residents and a $4.5 million budget. “My work ethic… Read More
Immigrants Offset Population Decline, Keep Midwest Economy Afloat
In 2017, the Chicago Council on Global Affairs published “Immigration a Demographic Lifeline in Midwestern Metros,” a report demonstrating how immigrants have helped offset U.S.-born population loss across the Midwest and revitalized an aging workforce. “Native-born Americans are getting older, so working-age natives —… Read More
International Students Generate Millions for Oklahoma University — and Town
Kyle McMichael is the international student advisor at Southeastern Oklahoma State University, located in the small town of Durant, 150 miles southeast of Oklahoma City. The mere presence of foreign students not only guarantees his job, it also represents roughly $3 million for the university in out-of-state tuition revenue. “They… Read More
Without Immigrants, America’s Restaurant Industry ‘Would Collapse’
Sam Toia is president and CEO of the Illinois Restaurant Association (IRA), which advocates on behalf of the industry and its workers. In the state of Illinois alone there are more than 27,000 restaurants, with total sales of $25.2 billion and more than 561,000 employees — nearly half of whom… Read More
Pakistani Doctor: A Muslim Woman ‘Can Make a Difference’
When Zartash Gul, Director of Myeloid Malignancies at University of Cincinnati Health, helps patients enter a potentially lifesaving drug trial, she tells herself: “I have come a long way. And the United States has allowed me to do this.” Gul had plans to set up a hospital in her… Read More
Immigrants Help Small Iowa Town Rebuild After Raid
In 2008 in Postville, Iowa, an immigration raid removed 389 undocumented workers from the Agriprocessors meatpacking plant. In the immediate aftermath, many other undocumented workers fled the town, which had a total population of only 2,000. The impact was devastating. “It interrupted our economy for at least… Read More
An Immigrant Helps Entrepreneurs, They Help the Economy
For Karla Boldery, a Mexican immigrant and business coach, how to make business development easier for immigrants is the million-dollar question. How to improve immigration reform, she says, is “the twenty-million-dollar question.” For the past seven years, Boldery has worked in innovation and technology business development. She received a… Read More
University Students Embrace Immigrant Culture — to America’s Benefit
In 15 years, Zoya Khan has taught more than 1,500 university students. “In my classes, I have first-generation students, honors students, single mothers,” she says. “It’s a diverse group, and I take pride in their achievements.” Khan, an associate professor of Spanish at the University of South Alabama, in Mobile,… Read More
Unintended Consequences: When U.S. Blocks Access, Fewer Unauthorized Immigrants Leave America
David Molina, a professor at the University of North Texas, is the product of two cultures. Born in Detroit, Molina was raised by an American mother and a Mexican father, who was in Michigan to complete a medical residency. The family moved to Mexico City when Molina was… 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
Make a contribution
Make a direct impact on the lives of immigrants.
