Undocumented immigrants in California are paying billions in taxes. Here’s how much

Amid pledges for mass deportations of undocumented immigrants by presidential candidate Donald Trump, a new study has highlighted the increasingly positive economic effects of this community.

The report from the Institute on Taxation and Economic Policy, a Washington-based progressive research group, found undocumented immigrants nationwide paid an estimated $96.7 billion in taxes in 2022. About $37.3 billion was spent on state and local taxes, and the rest went to federal taxes.

California’s economy particularly benefits from the undocumented workforce. The population paid an estimated $8.5 billion in state and local taxes in 2022, according to this latest report.

Ariel Ruiz Soto, a senior policy analyst at the Migration Policy Institute, a nonpartisan research group, said the numbers are unsurprising because California has the largest population of undocumented immigrants. More than 2 million undocumented immigrants are estimated to live in the state.

“There’s a lot of technology jobs that are being filled by immigrants, but also in the farming industry and the agriculture industry that’s so pivotal to California and the U.S. economy,” Ruiz Soto said.

Much of those federal taxes fund programs such as Social Security and Medicare — services this population is barred from using. While it’s been evident for years that undocumented immigrants pay taxes, the extent of their total contributions has grown more clear over the last decade.

This latest report is particularly striking because it includes federal tax contributions, a change from the institute’s 2017 study.

“It was interesting and eye-opening to see that that number had increased so much,” said Marco Guzman, a co-author for the report at a Monday briefing.

The report also directly pushes back against Trump’s past and current statements.

He has repeatedly voiced erroneous and unsubstantiated costs of undocumented immigrants. Over the last year, the presidential candidate has pledged to conduct the largest mass deportation event in American history if re-elected. A basis for Trump’s argument is that undocumented workers reduce wages and take jobs for American-born workers.

For every one million undocumented immigrants deported, the country could potentially lose $8.9 billion in tax revenue, per the report.

“Despite all (that) immigrants contribute to this economy, they’re currently at the center of a concerted dehumanization campaign in which some extremist politicians have chosen to scapegoat people in pursuit of power,” said Jackie Vimo, a senior analyst for the National Immigration Law Center.

The study also examined the potential effects of providing work authorization to the undocumented population. Under a scenario where work authorization is provided to all current undocumented immigrants, their tax contributions nationally would rise an additional $40.2 billion per year to $136.9 billion. California’s tax revenue would increase by $1.8 billion.

“Having that status is not just a symbolic effect,” Ruiz Soto said. “It also provides a significant upgrading of their skills and more confidence to boost their opportunities to advance in their current jobs.”