As Donald Trump prepares to take office again next week, he has vowed to draw a hard line on immigration, promising to launch the “largest domestic deportation operation in American history” as soon as he reaches the White House. Trump’s border czar Tom Homan, speaking on Donald Trump Jr.’s podcast in November, summed up his plan with the phrase “shock and awe,” a term used in military strategy to describe the overwhelming use of power and spectacular displays of force to paralyze the enemy and destroy their will. For all the tough talk and fearmongering from Trump and his allies, however, many are starting to point out what has been known for some time: undocumented immigrants are net contributors to our institutions, shoring up the tax base while being ineligible for many of the benefits enjoyed by citizens.
A report from the Institute on Taxation and Economic Policy from last year found that undocumented immigrants paid nearly $100 billion in taxes in 2022, with a roughly 60/40 split between the federal and state or local governments. This amounts to $8.9 billion per one million undocumented immigrants. What’s more, the ITEP report finds that more than a third of the funds raised go to programs like Social Security ($25.7 billion in 2022), Medicare ($6.4 billion), and unemployment insurance ($1.8 billion), all of which they are barred from accessing. ITEP’s analysis also shows that New York raised $3.1 billion from undocumented immigrants residing in its borders in 2022, one of the six states that raised more than $1 billion from this source.
Immigrants’ net contributions are of particular consequence for programs like Social Security, as the New York Times reports that the tens of billions raised every year for the program from undocumented migrants provides a positive pushback against factors working against its financial solvency, particularly falling birthrates. As older generations live longer and younger generations have fewer children, the fund is paying out more than it takes in, raising the need for additional taxable payroll to make up the shortfall. According to the Social Security Administration’s own calculations, reports the Times, “for every 100,000 net immigrants each year, the funding gap is improved by 0.09 percent of taxable payroll.”
While immigrant contributions are certainly helping the program, amending Social Security in other ways should not be overlooked, as its sources of funding have been adjusted in the past and could be again through, for example, raising the cap on payroll tax, or lifting it altogether.
The other side of undocumented immigrants’ outsize contributions to America’s institutions is the cost and damage associated with mass deportations that president-elect Trump and his administration officials have promised. A meta-analysis of economic studies on the labor market effects of deportations from the Brookings Institute found that “research consistently points to deportations hurting the U.S. labor market and leading to worse labor market outcomes for U.S.-born workers.” The direct cost of deporting over 11 million undocumented immigrants, as president-elect Trump has repeatedly vowed to do, is estimated at nearly $1 trillion over ten years by the American Immigration Council, while a report from the Senate’s Joint Economic Committee last month found that it “would cause catastrophic harm to the economy.”
