Research suggests that immigrants provide a net
fiscal surplus to the federal government, as immigrants have high
labor force participation rates, and thus contribute strongly to
federal revenues through their federal income taxes. Immigrants’ Social
Security payments, in particular, are a net fiscal asset to the federal
government. Because an estimated one-third of immigrants return to
their countries of origin, many who make Social Security payments
do not access their full benefits upon retirement.
While immigrants are net contributors to the federal budget, low-skilled
immigrants create a short-term net fiscal strain on state and local
governments due to costs of education, public benefits, and healthcare,
and lower local property and state income tax payments. Higher-skilled
immigrants generally present smaller short-term strains on state
and local governments.
The different federal and state/local fiscal impacts raise the question
of whether some federal reimbursement should be made to states and localities,
particularly if new legislation allows paths for increased numbers
of permanent or temporary immigrants to enter the country.
Further, assisting states and localities in providing educational
and preventive health services to new immigrants can benefit receiving
communities as a whole, as well as the national economy, by creating
healthier, more economically productive residents. |
Immigrants and Welfare: The Impact of Welfare Reform on America’s Newcomers