$101.5 million is the amount of state and local income taxes illegal immigrants in New Mexico paid last year.
" I think that there’s this myth that’s perpetuated that immigrants don’t pay their taxes, and we know that immigrants are paying taxes through their earnings; they’re paying taxes through their purchasing power; they’re paying taxes through purchasing homes and renting."—Rachel LaZar, executive director of El Centro de Igualdad y Derechos, an Albuquerque immigrants’ rights group
A new study released by the Immigration Policy Center will set straight anyone who imagines that illegal immigrants side step tax day. An estimated 50 percent of illegal immigrants participate in that singularly frustrating task each year, according to research compiled by the center.
In addition to state and federal income taxes, illegal immigrants pay gross receipts property taxes—both directly, as home buyers, and indirectly, as renters.
Although the study doesn't provide data on the estimated cost of services provided to New Mexico's illegal immigrants over the same period, the Council of Economic Advisers' 2005 Annual Report of the President, which it cites, offers some insight. The value of services provided to new immigrants "slightly" exceeds the taxes they pay but, in subsequent years, immigrants pay more than the services they use are worth, the report states.
Gerry Bradley, research director of New Mexico Voices for Children, says because so many illegal immigrants pay taxes using fake Social Security numbers, they miss out on receiving tax refunds. Illegal immigrants can apply for individual tax identification numbers, but are often afraid to, LaZar says. She adds that illegal immigrants also are unable to cash in on the Social Security benefits into which they paid.
"Immigrants, historically, have put much more money into the system than they have taken out," LaZar says. "I think that's where the concern comes in that the contributions of immigrants aren't being recognized…we need to recognize the positive economic contributions that immigrant communities are making."
According to research published on the Harvard Latino Law Review website, 5-10 percent of the tax returns the federal government receives each year carry mismatched names and Social Security numbers that require extra administrative work to process. LaZar says this issue is a symptom of the broken immigration system.
“This points to the fact that we need to look to the economic contribution of immigrants when we make policy decisions,” LaZar says.