Undocumented Residents Pay $587 Million a Year in NJ Taxes

Contributions Would Increase by $73 Million Under Reform

New Jersey’s undocumented immigrants contribute $587 million in state and local taxes, the sixth highest level of all the states. And those contributions would increase by $73 million – the eighth most of all states – under comprehensive immigration reform. These are the key Garden State findings in a new 50-state study released today by the Institute on Taxation and Economic Policy.

“Undocumented New Jerseyans are entrepreneurs, homeowners and vital contributors to the state’s economy and communities,” said Erika Nava, Policy Analyst at New Jersey Policy Perspective. “Facts matter – and this report is yet more proof that undocumented immigrants are an asset to our state and our nation.”

Other key findings of the report:

  • Undocumented residents across the country pay a total of $11.7 billion in state and local taxes.
  • New Jersey’s undocumented immigrants pay a higher effective state/local tax rate (7.7 percent) than the state’s top 1 percent of households (those with incomes over $758,000 a year, who pay an effective state/local tax rate of 7.1 percent).
  • New Jersey’s undocumented immigrants pay $49 million in personal income taxes; $272 million in property taxes and $266 million in sales and excise taxes.
  • After comprehensive immigration reform, the personal income tax contributions of New Jersey’s currently undocumented residents would increase by 40 percent (or $20 million); their property tax contributions would rise by 10 percent (or $27 million) and their sales/excise tax contributions would increase by 10 percent (or $27 million).

“Just as the horrendous impact of breaking up families under a mass deportation policy should not be ignored, nor should policymakers overlook the significant contributions undocumented immigrants make to our state and local revenues and the economy,” said Meg Wiehe, ITEP Director of Programs at the Institute on Taxation and Economic Policy. “Keep in mind most state and local taxes are collected from people regardless of immigration status. Undocumented immigrants, like everyone else, pay sales and excise taxes when they purchase goods and services. They pay property taxes directly on their homes or indirectly as renters. And many undocumented immigrants also pay state income taxes.”

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