Study: Immigrants Pay Tax Share

"There's sales tax, there's property tax, there's consumption taxes on alcohol, on cars, on gasoline, on utilities," said Jeffrey S. Passel, a demographer at the Pew Hispanic Center who co-authored the report.

Montgomery County Council member Tom Perez (D-Silver Spring) said the study demonstrates the economic importance of immigrants to the region and provides elected officials data that lend context to the immigration debate.

"We're invariably asked the question, 'Why are you spending $130,000 in Gaithersburg to fund a day-labor center? You're giving money to people who supply no services to people and who pay no taxes,' " Perez said. "That is a factually incorrect assertion."

In 1999, immigrant households in the region earned $29.5 billion, or 19 percent of the area's total income. Their average income was $78,000, compared with native household incomes of $88,000. Immigrant households paid 28 percent of their income in taxes while natives paid 31 percent, the report says.

Of the taxes immigrants paid, nearly three-quarters went to the federal government, 17 percent to the state and 12 percent to localities, amounts similar to those of native-born taxpayers, the report states.

More than half of all immigrant tax contributions were paid by naturalized citizens, whose households earned an average of $91,000. Legal permanent residents made $78,000. Like natives, both groups paid nearly one-third of their income in taxes.

Households of illegal immigrants -- who constituted 22 percent of the immigrant population in 2000 -- and those with temporary protected status earned an average of $53,000 and paid 19 percent in taxes.

Immigrants with good English skills, advanced education and legal status make the most money and pay the most taxes among non-native born people, the study found. Michael Fix, vice president and director of studies at the nonpartisan Migration Policy Institute and a co-author, said that shows better integration -- learning English and getting legal status, for example -- leads to higher salaries and tax payments.

"It's a dog-bites-man story," Fix said. "But it's one that isn't often heard."

It is one reason the Washington region's immigrant tax base is strong, the report suggests. According to a 2003 Brookings Institution study, the Washington region has the highest percentage of foreign-born English speakers and lowest immigrant poverty rate among the 10 U.S. metropolitan areas with the largest international populations.

The study recommends publicly funded English and adult education for immigrants, which it says would boost incomes and tax payments. It also advises granting work permits to illegal immigrants as a way to increase payroll tax contributions.

Some experts, including Camarota, disagree. Although legalizing those immigrants -- of whom many have low incomes -- would certainly result in more people filing taxes, it might also qualify them for more public services whose costs outweigh their tax payments, they say.

The study was underwritten by the Washington Area Partnership for Immigrants, a funding collaborative of the Community Foundation.

Staff writer Neil Irwin contributed to this report.