Q: In New York State, how do undocumented immigrants impact state and local tax collections?

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Q: In New York State, how do undocumented immigrants impact state and local tax collections?

A: ITEP estimated that the ~850,000 undocumented immigrants in NY pay $1.1 billion in NY state and local taxes (e.g., sales tax, property tax, state and local income tax, gasoline taxes, utility bill taxes, etc.) and that their NY effective tax rate is 8.9% (i.e., for every $100 of income, they pay $8.90 in NY state and local taxes). This compares to the top 1% of NY income earners effective tax rate of 8.1%. In the US overall, the effective tax rate is 10.8% for the bottom 99% of income earners and 8.8% for the top 1% of income earners (see the chart above). It is likely that more than half of undocumented immigrants file federal and state tax returns using ITINs (individual tax identification numbers), and more would likely file if they were to become citizens.

- originally published in the 7/31/2017 newsletter

Stephanie Lee