Just Taxes Blog by ITEP

Morally and Economically, Including Undocumented Immigrants Is the Right Thing to Do

April 17, 2020

.ITEP Staff

COVID-19 is bringing to light various truths that too many of us hadn’t considered when going about our daily lives. Service industry jobs from stocking shelves, ringing up purchases and delivering goods are essential, and we haven’t valued these workers enough.

Immigrants, legal and undocumented, are among those providing this and other immense value to our economy. Some of them are also part of the class of workers who cannot work from home and are losing their economic livelihoods. But as Congress quickly drafted legislation in late March to provide economic relief to business, displaced workers and low- and middle-income people, it left undocumented immigrants out.

This week, individuals and families began receiving one-time relief checks. Enacted in March, the Coronavirus Aid Recovery and Economic Security (CARES) Act provides $1,200 economic impact payments to adults earning $75,000 or less and $500 for each child in a household. But by requiring everyone in the household to have a Social Security number, Congress denied this financial relief to undocumented immigrants, including those who have citizen children and spouses. This includes at least 7.8 million immigrant adults and children who live in households that pay federal income taxes using an Individual Taxpayer Identification Number (ITIN).

Just as many are now recognizing the immense value of service workers and rightly demanding that we protect their health and wellbeing, we must also recognize the contributions of undocumented immigrants and protect their wellbeing. Frankly, we should do so out of human decency, but there is also a clear economic argument.

For the last decade, ITEP has produced distributional analyses showing undocumented immigrants’ contributions to our state and local tax systems. Our most recent report found that undocumented immigrants paid more than $11.7 billion in state and local taxes. The 8 percent average effective state and local tax rate paid by undocumented immigrants is on par with what middle-income taxpayers contribute. They also pay federal income, payroll and excise taxes.

The CARES Act also generously expanded unemployment insurance benefits, but undocumented immigrants remain ineligible to receive benefits unless they have been granted temporary work authorization.

Undocumented immigrants are already excluded from Medicaid and the Affordable Care Act, giving them virtually no health coverage in the midst of a pandemic. They are also excluded from food aid and 2.4 million working immigrant households who would otherwise be eligible are left out of the Earned Income Tax Credit, the primary way we help working families escape poverty in the United States.

Fortunately, some state and federal policymakers are putting forth plans to include undocumented immigrants in their responses to COVID-19. California Gov. Gavin Newsom announced earlier this week that the state will provide $75 million—with another $50 million from philanthropy—to pay up to $1,000 to each undocumented immigrant household left out of the CARES Act, helping about 150,000 California workers and their families. Advocates in at least six states are pushing to include working immigrant families in unemployment insurance, tax credits, food assistance, or cash payments similar to the California plan. With support from unions and community organizers, Rep. Ilhan Omar (D-MN) and others have called for an extension of the CARES-Act rebates to ITIN filers and their families. If they prevail, we can all feel that our country is better living up to its ideals.

People have long come to the United States in search of work, opportunity, and a better life for themselves and their children. Once here, immigrants contribute to the fabric of our country and our economy. Incorporating them into our social contract—including our COVID-19 relief—is the morally right and economically smart thing to do.


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