Undocumented immigrants paid nearly $26 billion into the Social Security coffers in a single year, according to a new report.
A new analysis from the Institute on Taxation and Economic Policy (ITEP) found that undocumented residents paid $25.7 billion into Social Security funds and $6 billion to Medicare in 2022; both programs they are not entitled to use. In total, undocumented immigrants paid $96.7 billion, or about $9,000 per person, 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, it was found that undocumented immigrants paid higher state and local tax rates than the wealthiest 1% of families living in the same state.
“Income tax payments by undocumented immigrants are determined by laws that require them to pay more than similarly situated American citizens,” the report states. “Undocumented immigrants are often barred from receiving significant tax credits and sometimes do not claim refunds owed to them due to lack of awareness, concern about their immigration status, or insufficient access to tax preparation assistance.”
Social Security is funded by a combination of payroll taxes and government reserve funds. It is by far the largest direct expense in the annual U.S. government budget, totaling $1.3 trillion, or about 5% of the 2023 GDP. Workers, whether native or not, contribute to the fund at a rate of 12.4% split equally between the individual and their employer.
Research organizations and experts have found that illegal immigration benefits the Social Security system by adding money to its funds from workers who are not eligible to receive retirement, disability, or survivor benefits.
“Illegal immigration improves the finances of Social Security and Medicare for a simple reason: although illegal immigrants are generally not eligible to receive Social Security and Medicare benefits, many still pay taxes into the system. These taxes act as free contributions to the trust funds, as long as illegal immigrants remain ineligible for benefits.”
Source: Newsweek