As the reality of President-elect Donald Trump's goal for mass deportations of undocumented immigrants begins to set in, the implications for both individuals and the broader economy demand our attention. Stephen Miller, Trump's pick for deputy chief of staff, has articulated plans to initiate “the largest deportation operation in American history” shortly after Inauguration Day. While this rhetoric paints undocumented immigrants as scapegoats, it obscures the significant contributions these individuals make to federal, state, and local economies—particularly through their tax contributions.

Undocumented Immigrants and Tax Contributions

Contrary to the narrative that undocumented immigrants are a drain on resources, they actively contribute to the economy through a variety of tax payments. Like their documented neighbors, undocumented immigrants pay sales and excise taxes on everyday goods and services, such as groceries, gasoline, and utilities. They also contribute property taxes, whether they own homes or rent, as landlords often pass property tax costs to tenants. Moreover, undocumented workers pay payroll taxes through automatic paycheck withholdings and income taxes, often filing returns using Individual Taxpayer Identification Numbers (ITINs) issued by the IRS.

According to an analysis by the Institute on Taxation and Economic Policy, the undocumented population paid nearly $97 billion in taxes in 2022 alone. Of this, over $54 billion went to the federal government, and more than $37 billion was paid to states and localities. To put this in perspective, the U.S. stands to lose $8.9 billion in tax revenue for every 1 million undocumented immigrants deported under a mass deportation program.

Funding Communities and Vital Programs

Undocumented immigrants help fund critical public services, including education, infrastructure, and public safety. Their tax dollars support teacher salaries, road and bridge repairs, and other quality-of-life improvements. Additionally, they pay into programs such as Social Security, Medicare, and unemployment insurance, even though they are ineligible to receive benefits from these programs in most circumstances. These individuals are also excluded from accessing key federal tax credits like the Earned Income Tax Credit and, in many cases, the Child Tax Credit.

At the state level, undocumented immigrants contribute primarily through sales and excise taxes ($15.1 billion), followed by property taxes ($10.4 billion) and income taxes ($7 billion). On average, undocumented immigrants pay an effective state and local tax rate of 8.9 percent, which is higher than the 7.2 percent paid by many of the wealthiest Americans. In fact, undocumented immigrants in 40 states pay higher effective tax rates than the wealthiest residents in their respective states.

Economic and Social Costs of Mass Deportation

Mass deportations would not only devastate families and communities but also impose significant costs on the U.S. economy. Removing 20 percent of the construction workforce or over 1.6 million workers in the food industry would likely lead to higher prices for housing and food—costs that would ultimately burden American consumers.

The immigration debate in the United States is complex and demands greater nuance and understanding. Undocumented immigrants contribute to our communities and economies in many underappreciated ways. Instead of resorting to drastic and punitive measures, policymakers should pursue long-term solutions grounded in human dignity, compassion, and economic reality. Only then can we craft immigration policies that reflect the values and needs of our nation.