Commentary: Undocumented immigrants are well documented. Just ask the IRS

The phrase “undocumented immigrant” is deeply misleading, if not outright inaccurate. It implies that there is a mass of people in the U.S. that essentially live off the grid, apart from society, existing only in informal economies and off-the-book transactions. In fact, immigrants who lack permission to be in the U.S. are enmeshed in society with plenty of formal and official documents to their name, from tax returns to mortgages.

No, immigrants haven’t figured out how to circumvent the rules. The reality is that the system encourages people coming to America seeking a better life to participate in society to the fullest extent possible, which is in the country’s best economic interests even if they don’t have permission to be here. And that means paying taxes – lots of them. That Institute on Taxation and Economic Policy estimated in July that this group paid almost $100 billion in federal, state and local taxes alone in 2022.

President Donald Trump’s slash-and-burn immigration policy involves deporting most, if not all, of the 11.7 million undocumented immigrants the Center for Migration Studies estimates are living in the U.S. What the administration probably doesn’t realize is that this policy will, in fact, become a sort of self-fulfilling prophesy by pushing this group off the grid, turning the undocumented in name into the undocumented in reality.

The clearest illustration of how inaccurate the “undocumented” epithet comes from the tax system. The most obvious is that as consumers they pay sales taxes on the goods and services they buy. According to the Institute on Taxation and Economic Policy, this amount is estimated to be $15.1 billion. That’s less than the $13.2 billion Congress sent to states for the Elementary and Secondary School Emergency Relief Fund in the CARES Act at the start of the pandemic. (1)

Not only that, but the estimated 8.3 million undocumented immigrants that work pay more than twice that -- $33.9 billion -- in payroll taxes toward Social Security, Medicare and Unemployment Insurance. And it’s not like these programs return the money to employers if the worker provided a fake Social Security number to obtain employment. In that sense, this money represents a windfall for the government, collecting taxes from those who are not included in benefit calculations for Social Security.

And – SURPRISE! -- undocumented immigrants pay federal income taxes. Some of this comes from automatic withholding, but the government has also issued 5.2 million active ITINs, or Individual Tax Identification Numbers that the Internal Revenue Service issues to people filing a tax return who are not U.S. citizens and who are not eligible for a Social Security number. This amount totaled upwards of $20 billion last year, which is the amount the government spends on the National School Breakfast and Lunch programs.

ITINs can also be used to obtain a driver’s license, bank account or mortgage, among other things. Speaking of mortgages, undocumented immigrants have high enough homeownership to pay $10 billion in property taxes a year.

All these tax dollars not only put into perspective how laden with documents the undocumented are, but what is at stake with the policies of the second Trump administration. The biggest, most intangible cost stems from encouraging 11.7 million people in the U.S. to remove themselves from society. Just this month the Department of Homeland Security revoked past policy that prevented immigration enforcement actions — arrests and raids — from taking place at schools, churches and hospitals. The goal is clearly for any interaction an undocumented immigrant has with a public institution to be an avenue for arrest, rather than assimilation.

So why take the risk of paying taxes, enrolling children in school, seeking basic medical care, calling 911 in an emergency, cooperating with police investigations, attending church, obtaining car insurance, paying traffic fines, reporting employers who violate labor laws or landlords who violate housing laws? Trump administration policies upend the notion that undocumented immigrants in the U.S. are supposed to be good citizens, even if they aren’t actual citizens. The result will the cost the U.S. tax dollars while risking public health and safety.

Proponents of mass deportations would surely defend the idea of second-class non-citizenship as a good thing. These people are in America, but they aren’t Americans. Such logic reveals another cost they haven’t considered. Americans are notoriously undecided on immigration policy. Polling firm Ipsos recently found that two-thirds of Americas supported deportation, but none of the actual policies that would achieve it, such as using the military. A Pew Research Center study found that 60% of voters think undocumented immigrants should be allowed to stay in the U.S. Gallup’s long history of polling on views toward immigration show that most Americans think immigration is a good thing for the country and are essentially torn on being tough or kind. For example, the majority support fortifying a wall on the southern U.S. border and hiring more border agents, but a larger majority support a path to legal residence.

Perhaps not since the Eisenhower administration’s infamous “Operation Wetback,” which relied on mass raids and roundups to deport more than a million individuals to Mexico in 1954, have Americans been forced to reconcile their views on immigration. Maybe these latest mass deportations, which will be shown in real time on social and traditional media, will force their hand. Will the dislike of rule breakers — they’re here without permission! — win out? Or will an instructive and humbling lesson in how undocumented immigrants actually follow the rules and that the real atrocity is being perpetuated by an intrusive and cruel government win out?

Isolating almost 12 million residents will cost the U.S. more than most realize, as the more immigrants withdraw from society’s norms, the harder those norms are to uphold. Here’s hoping that those costs may finally push Congress to pass actual, meaningful immigration reform.

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(1) These funds are collectively referred to as ESSER I, (as in Elementary and Secondary School Emergency Relief). In December of 2020, the Coronavirus Response and Relief Supplemental Appropriations sent another $54 billion, referred to as ESSER II. The American Rescue Plan then sent $122 billion, referred to as ESSER III, or ARP ESSER.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Kathryn Anne Edwards is a labor economist and independent policy consultant.