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Study Finds Undocumented Immigrants in Maine Paid $15.6 Million in Taxes

by Hyacinth

Undocumented immigrants in Maine contributed $15.6 million in state and local taxes in 2022.

A study released Tuesday by the Institute on Taxation and Economic Policy, a left-leaning nonprofit think tank, found that undocumented immigrants paid nearly $100 billion in federal, state, and local tax revenue in 2022, despite being largely excluded from the programs their taxes support. These findings contradict anti-immigrant rhetoric that claims undocumented immigrants are harming social programs.

Mufalo Chitam, executive director of the Maine Immigrants’ Rights Coalition (MIRC), which represents over 100 immigrant organizations across the state, emphasized the importance of this data. “There hasn’t been data that speaks to the value of immigrants, so it is refreshing to see this timely study and findings, especially when the value of immigrants in our state or country is being questioned,” Chitam said.

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MIRC members, including Ruben Torres, advocacy, communications, and policy manager, believe the findings reinforce what they have long understood: undocumented immigrants are integral members of the community who significantly contribute to the state’s economy.

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The study, using 2022 estimates, showed that undocumented immigrants contributed $96.7 billion in taxes nationwide. These taxes include property taxes, sales taxes, federal payroll taxes, and income tax returns filed with Individual Taxpayer Identification Numbers. In Maine, the contributions break down as 38% from property taxes, 31% from sales and excise taxes, and 28% from personal or business income taxes.

Despite contributing to payroll taxes that fund Medicare, Social Security, and Unemployment Insurance, undocumented immigrants are not eligible for these benefits. They also face barriers to obtaining tax refunds, such as scams by unscrupulous tax preparers targeting immigrant communities, noted Jackie Vimo, senior analyst of economic justice policy at the National Immigration Law Center.

“There are many laws preventing undocumented workers from accessing benefits,” said Richard C. Auxier, principal policy associate at the Urban-Brookings Tax Policy Center, a nonpartisan think tank not involved in the study. “They get a lot of political attention. At the end of the day, they’re just normal people paying normal taxes.”

Addressing the Labor Shortage

The study also found that if undocumented immigrants had access to work authorization, they would contribute an additional $40.2 billion annually in federal, state, and local taxes. This increase would result from higher wages associated with employment authorization and easier compliance with income tax laws.

In Maine, tax contributions from undocumented immigrants would rise to $19.8 million if they were granted work authorization. The Maine Center for Economic Policy’s analysis last fall highlighted Maine’s plateauing workforce, partly due to an aging population, and suggested immigration as a solution to grow the workforce. President and CEO Garrett Martin reiterated this point in light of the latest tax findings.

“One of the best ways to ensure employers have the workers they need and Maine has the revenue to fund our needs is to give all New Mainers the legal authority to live and work here as quickly as possible,” Martin said.

Other policy experts have cited a national labor shortage—8.1 million job openings and 6.8 million unemployed workers—as a reason to embrace the economic contributions of undocumented immigrants. States such as South Dakota, North Dakota, Maryland, Vermont, Maine, and South Carolina face significant labor shortages, according to a Washington Post analysis of Bureau of Labor Statistics data.

“Immigrants are already filling that [labor] gap, and if we have mass deportations where millions of immigrants are torn from their families and the country they have made home, we will face not only the human impact but also severe economic and workforce shortages,” Vimo said.

MIRC has long advocated for the economic integration of immigrants to create a thriving economy. Chitam pointed to a decade-old report from MIRC and the World Affairs Council of Maine that emphasized this point. Recently, Maine’s elected officials and immigrant rights groups have pushed to expedite the process for immigrants to obtain work permits. Under the Immigration and Nationality Act, asylum seekers must wait 180 days after filing an asylum claim to begin working.

Chitam and Torres said MIRC will continue advocating for policies that recognize immigrants’ value and provide opportunities for full economic participation, including pushing for more efficient work authorization processes. “This would not only increase tax contributions but also empower immigrants to secure better jobs, support their families, and contribute more effectively to our society,” Torres said.

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