New Report Shows Immigration Benefits Federal Finances.
A new bipartisan report from the Congressional Budget Office (CBO) challenges the standard argument against immigration restrictions. Many libertarians and conservatives claim that immigration increases welfare spending, leading to higher taxes or a fiscal crisis. However, the CBO’s latest findings suggest otherwise.
The report reveals that the increase in immigration since 2021 will actually save the federal government $970 billion between 2024 and 2034. This surprising conclusion is based on two key points: immigrants generally contribute more in taxes than they receive in benefits, and their presence boosts economic growth, which in turn increases tax revenue.
This study aligns with previous research. For instance, Chapter 6 of my book Free to Move discusses other studies with similar conclusions. Alex Nowrasteh of the Cato Institute also provided a comprehensive review last year, which included state and local budget impacts in addition to federal ones.
Even if immigration did negatively impact fiscal conditions, alternative solutions, such as limiting immigrants’ access to government benefits, could address these issues without resorting to harsh measures like exclusion. I explore this “keyhole solution” in detail in my book.
Beyond fiscal impacts, immigration brings other economic benefits, including growth, entrepreneurship, and innovation. Immigrants significantly contribute to these areas, particularly in entrepreneurship and innovation.
While fiscal arguments are crucial, they are not the only reasons for immigration restrictions. Opponents may cite concerns about cultural effects or crime. If these concerns are significant enough, they could outweigh the economic benefits. However, fiscal considerations remain a major factor in immigration policy debates, especially among those who advocate for free markets.