$1.4 Billion to Houston from Immigration Legalization

houston texasNew Report Says Legalization Would Result in $1.4 billion in Revenues for Houston, Texas

A new report issued this month by the Greater Houston Partnership (GHP), a business advocacy organization, confirms that legalization of unauthorized workers would result in those workers earning higher wages and paying more taxes. Potential Tax Revenues from Unauthorized Workers in Houston’s Economy uses data from the Pew Hispanic Center to estimate the number of unauthorized immigrant workers, by industry, in the Houston area. Then, assuming that legalized workers would earn the prevailing wage in their industry, GHP estimates their projected incomes to which it applies the standard tax rate.

GHP estimates that, if all unauthorized workers in the Houston region were legalized and they and their employers paid Social Security, Medicare, unemployment insurance, and federal income taxes, additional tax revenues would exceed $1.4 billion. The report also demonstrates that even with less than 100% legalization, there are still significant potential revenues. For example, if only 25% acquire legal status, an additional $356.1 million in tax revenues would be generated.

immigration impact

This study examines an important question about what legalizing the currently undocumented would do. However, it does have a few problems stemming from some of the assumptions made about the undocumented population.

The report assumes unauthorized workers and their employers are not currently paying any taxes and that only legalization would require them to pay taxes. However, we know that many undocumented workers and their employers already pay Social Security, Medicare, unemployment, and federal income taxes. Once legalized, many would likely get better jobs with higher wages, not the prevailing wage, meaning they would pay even more in taxes than the report estimates.

The report should also include sales and property taxes which are already paid by unauthorized immigrants right now. The gains from these taxes would also likely increase because legalized workers making higher incomes would spend more on consumption and pay more tax.

Despite those concerns, the new GHP report adds to the literature that legalization is an economic plus for our communities.

michele waslinHopefully, this report will encourage more people to look at what immigration brings to an economy as opposed to the usual discussion over how much unauthorized immigrants cost—discussions which often cite dubious sources. Conveniently absent from many of those discussions is the fact that these immigrants are workers, taxpayers, and consumers who benefit the economy in significant ways. More importantly, in contrast to spending billions of dollars on mass deportation, legalization would lead to higher tax revenues and higher consumption which boosts the economy.

Michele Waslin
Immigration Impact 

About Michele Waslin

Michele Waslin, Ph.D., is the Senior Policy Analyst at the Immigration Policy Center. She has authored several publications on immigration policy and post-9/11 immigration issues. Ms. Waslin appears regularly in English and Spanish-language media. Previously, she worked as Director of Immigration Policy Research at the National Council of La Raza (NCLR) and Policy Coordinator at the Illinois Coalition for Immigrant and Refugee Rights. She received her Ph.D. in 2002 in Government and International Studies from the University of Notre Dame, and holds an M.A. in International Relations from the University of Chicago and a B.A. in Political Science from Creighton University. (mwaslin@ailf.org)

Comments

  1. Jack Black says:

    The report assumes unauthorized workers and their employers are not currently paying any taxes and that only legalization would require them to pay taxes.

    What a stupid assumption.

    Illegal aliens are hired by employers who have NO INTENTION of ever paying their employee taxes such as workers compensation and Social Security. Those employees aren’t going to suddenly going to stop working under the table just because you hand them amnesty and citizenship.

    Once legalized, many would likely get better jobs with higher wages, not the prevailing wage, meaning they would pay even more in taxes than the report estimates.

    Great, thanks a lot. Let’s give millions of illegal aliens amnesty so they can take away even more jobs from Americans.

    Liberals: someone who complains that right wing voters vote against their own interests. Heh, look around so-called “progressives.” All you’re doing is helping the companies that profit from cheap labor.

    The more you push the Democrats to give amnesty, the more you hurt our working and middle classes. There’s nothing progressive about helping cheaters jump ahead of those willing to cooperate with societies rules.

  2. I have a better idea: Kick out illegal aliens and employ citizens and legal residents instead. Support those who are willing to abide by the rules and stop trying to force our country to give AMNESTY to lawbreakers.

    Legal immigrants get screwed when we allow corporations to employ illegal aliens. The rest of our workforce pays the price also, since illegal aliens are unwilling to report employers for illegal workplace practices. The middle class pays again because illegal aliens can have babies that we have to support for the rest of their lives.

    Why do liberals keep pushing for amnesty instead of supporting those who want to come and work here legally?

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