BUSINESS
07/10/2013 12:01 am ET Updated Oct 11, 2013

Undocumented Immigrants Would Pay Billions More In Taxes If Allowed To Work Legally: Study

Allowing undocumented immigrants to work legally in the U.S. would boost their state and local tax contributions by an estimated $2 billion annually, a new study finds.

The study, conducted by the Institute on Taxation and Economic Policy (ITEP), a non-partisan research organization, says that the country's 11.2 million undocumented immigrants already collectively contributed $10.6 billion in state and local taxes in 2010 -- mostly through sales and excise taxes, but also via property and income taxes -- and that that number could jump to more than $12.6 billion.

How? If allowed to work legally, undocumented immigrants would pay more in state income taxes, as well as participate fully in federal, state and local tax systems. ITEP's analysis also assumes that legalization would allow the undocumented to better bargain with employers, increasing their income and, in turn, tax contributions.

Immigration legislation currently before Congress would grant the legal right to work to many unauthorized U.S. workers. Regardless, multiple research reports find such a change would prove economically beneficial. Among them:

- A study by the the non-partisan Congressional Budget Office that found the immigration reform bill would shrink the deficit by $197 billion over the next decade.
- A study by the Brookings Institution's Hamilton Project that found an increase in immigrant workers may lead to a boost in wages for U.S-born workers.

The majority of the American people appear behind such a change as well. Some 75 percent of Americans say that granting undocumented immigrants legal status would be good for the economy, Pew Research reported in June.

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