Undocumented immigrants paid nearly $26 billion into Social Security coffers in a single year, a new report has found.
New analysis by the Institute on Taxation and Economic Policy (ITEP) found that undocumented residents paid £25.7 billion into Social Security funds and $6 billion into Medicare in 2022; both programs that they are not entitled to use. In total, undocumented immigrants paid $96.7 billion, or roughly $9,000 per person, in taxes in 2022.
Altogether, undocumented people paid a total of $96.7 billion in taxes in 2022, with $59.4 billion paid to the federal government and the remaining $37.3 billion paid to state and local authorities. In 40 states, undocumented immigrants were found to pay higher state and local tax rates than the top 1 percent of households living in the same state.
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"Income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens," the report says. "Undocumented immigrants are often barred from receiving meaningful tax credits and sometimes do not claim refunds they are owed due to lack of awareness, concern about their immigration status, or insufficient access to tax preparation assistance."
Social Security is funded through a combination of payroll taxes and government reserve funds. It is by far the largest direct expense of the U.S. government's annual budget, amounting to $1.3 trillion, or about 5 percent of the 2023 GDP. Workers, whether native or otherwise, pay into the fund at a rate of 12.4 percent divided equally between the individual and their employer.
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Research organizations and experts have found that illegal immigration benefits the Social Security system by adding money to its funding pots from workers that are not eligible to collect retirement, disability or survivor benefits.
"Illegal immigration unambiguously benefits the Social Security and Medicare trust funds," the nonpartisan Center for Immigration Studies said in a 2023 report on the subject.
"Illegal immigration improves the finances of Social Security and Medicare for a simple reason: although illegal immigrants are generally not eligible to collect Social Security and Medicare benefits, many still pay taxes into the system. These taxes function as free contributions to the trust funds, as long as the illegal immigrants remain ineligible for benefits."
Dr. Shayak Sarkar, professor of law at the University of California Davis School of Law, told Newsweek: "Existing immigrants already in the United States are contributing to the SSA [Social Security Administration] even without work authorization, and others with work authorization are oddly barred from contributing.
"Some undocumented immigrant workers make Social Security contributions through payroll taxes deducted from their paychecks—even if they will never ultimately make a claim for Social Security."
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Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more