Colorado Politics

Colorado turns a profit off undocumented residents, reports say

Colorado’s 163,000 undocumented immigrants pay plenty in taxes, according to a new report by the Institute on Taxation and Economic Policy.

The nonprofit think tank on state and federal tax policy estimates undocumented residents contributed $21.4 million in personal income taxes, $35.8 million in property taxes and $82.2 million in sales and excise taxes to the state in 2015.

That’s $139.5 million in state taxes, “dispelling myths that undocumented workers don’t pay taxes and showing the significant amount of revenue that would be impacted by hardline immigration policies,” said the Colorado Fiscal Institute, which released the report Thursday.

Undocumented Immigrants’ State & Local Tax Contributions estimates undocumented residents in the United States pay $11.74 billion annually in state and local taxes.

“On average, the nation’s estimated 11 million undocumented immigrants pay 8 percent of their incomes in state and local taxes every year,” the Institute on Taxation and Economic Policy states. “While it is unlikely to happen in the current political environment, undocumented immigrants’ state and local tax contributions could increase by up to $2.1 billion under comprehensive immigration reform, boosting their effective tax rate to 8.6 percent.”

Writing about the report Thursday, Tatiana Sanchez of the San Jose Mercury News interviewed Ira Mehlman, spokesman for the Federation for American Immigration Reform, which takes a strict view of immigration policy. He said the report is based on “flawed assumptions.”

He scoffed at the $11.74 billion in taxes, claiming state and local governments collectively spend about $84 billion a year for education, health care, public safety and other services.

The Denver-based National Conference of State Legislatures  cites a 2011 report by Elena Fairley and Rich Jones of the Bell Policy Center in Denver that indicates Colorado profits, if only slightly.

The study said undocumented residents paid the state about $167.5 million a year in various local and state taxes, while using $166.6 million in services.

“Our analysis shows that FAIR’s cost data is widely inflated, while the group’s tax estimate is fairly accurate,” Fairley and Jones wrote in 2011.

Costs come mostly from education, emergency medical care and incarceration, which they estimated to be about $116.6 million a year, according to their analysis.


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