September 21, 2021
The contributions immigrants make as both taxpayers and consumers are indispensable to the U.S. economy. Nationally, immigrants earned $1.3 trillion in 2014 and contributed $105 billion in state and local taxes and almost $224 billion in federal taxes. This left them with nearly $927 billion in spending power, which they frequently used to purchase goods and services, stimulate local business activity, and create jobs in the broader U.S. economy.
Household Income of Immigrants
In 2014, more than 72 percent of foreign-born population in the United States was working-aged, compared to less than half of U.S.-born residents. This reality allowed immigrants to earn well over a trillion dollars of income in 2014—a greater amount than their portion of the U.S. population overall.
|$1.3 trillion: Total Household Income of Foreign-Born, 2014.|
|14.2 percent: Foreign-Born Share of Total Household Income, 2014.|
|13.2 percent: Foreign-Born Share of the U.S. Population, 2014.|
A notable portion of the income earned by immigrants each year funnels directly back to our government in the form of tax revenues. In some states, immigrants contribute more than one out of every four tax dollars paid by local residents each year—making them invaluable to the health and success of taxpayer-funded services like public schools and police departments.
|$223.6 billion: Total Federal Tax Contributions of Foreign-Born, 2014.|
|$104.6 billion: Total State and Local Tax Contributions of Foreign-Born, 2014.|
|$328.2 billion: Tax Contributions of Immigrants Overall, 2014.|
|State||Total Tax Contributions of Foreign-Born||Share of Total Tax Revenue Paid by Immigrants|
Spending power is the disposable income left to households after deducting their annual tax contributions. The $9.3 billion in total spending power held by immigrant led households in 2014 allowed them to hold considerable power as consumers. By spending on goods and services, immigrants strengthen the U.S. economy and provide jobs to American workers as well as the businesses dependent upon paying customers.
|$926.9 billion: Total Spending Power of Foreign-Born, 2014.|
|14.3 percent: Share of total U.S. Spending Power held by immigrant-led households.|
|States||Total Spending Power, Foreign-Born||Share of Spending Power, Foreign-Born|
Bolstering the Housing Market
By purchasing homes in neighborhoods formerly in decline, immigrants in recent decades have had a positive impact on U.S. housing values overall. From 2000 to 2010, each of the 40 million immigrants in the United States added, on average, 11.6 cents to the value of a home in their local county. That seems small, but it adds up. In fact, it resulted in immigrants growing U.S. housing wealth by $3.7 trillion during that period.2 Immigrants are also expected to play a key role buying up homes as baby boomers downsize in the coming years: Almost 30 percent of American homeowners were older than age 65 in 2014.
2 Jacob Vigdor, “Immigration and the Revival of American Cities,” New American Economy, 2013 Available online.
|8.7 million: Number of Foreign-Born Homeowners, 2014.|
|15.7%: Share of U.S. housing wealth owned by immigrant-led households, 2014.|
|29.7%: Share of homeowners aged 65 or older, 2014.|
|15.7 million: Number of immigrants who have purchased new homes in the last four years.|
|County||Estimated Amount Immigrants Added to the Value of Average Home, 2000-2010|
|Harris County, TX||$26,702|
|Riverside County, CA||$20,587|
|Clark County, NV||$19,718|
|Maricopa County, AZ||$17,970|
|Broward County, FL||$14,491|
|San Bernardino County, CA||$13,167|
|King County, WA||$12,078|
|Miami-Dade County, FL||$11,672|
|Gwinnett County, GA||$11,448|
|Palm Beach County, FL||$10,658|
Regardless of where the immigrants came from, they contribute a tremendous amount of money to the U.S. economy as taxpayers and consumers. In this section, we show the amount earned and contributed in taxes by different ethnic and national origin groups within the foreign-born population.
|Subgroup||Total Income||Total Federal Tax Contributions||Total State and Local Tax Contributions||Total Spending Power|
|Asian and Pacific Islander Immigrants||$439.2B||$86.3B||$35.5B||$317.5B|
|Middle Eastern & Northern African Immigrants||$52.8B||$10.5B||$4.3B||$38.5B|
|Sub-Saharan African Immigrants||$47.8B||$8.3B||$4.0B||$35.5B|
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New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…