The Fiscal Impact of Immigration Reform: The Real Story

Opponents to comprehensive immigration reform often talk about the burden it will cause taxpayers. Daniel Griswold director, Center for Trade Policy Studies, Cato Institute gives us the real story.

One frequently heard criticism of comprehensive immigration reform is that it will prove too costly to taxpayers. The mostly low-skilled workers who would be admitted and legalized under the leading reform plan now being considered by the U.S. Congress would typically pay fewer taxes than native-born Americans and presumably consume more meanstested welfare services. Critics of reform argue that legalizing several million undocumented workers and allowing hundreds of thousands of new workers to enter legally each year will ultimately cost American taxpayers billions of dollars.

One recent study from the Heritage Foundation, for example, claims that each "low-skilled household" (one headed by a high-school dropout) costs federal taxpayers $22,000 a year. Spread out over 50 years of expected work, the lifetime cost of such a family balloons to $1.1 million. If immigration reform increases the number of such households in the United States, it will allegedly cost U.S. taxpayers several billion dollars a year.1

It is certainly true that low-skilled workers do, on average, consume more in government services than they pay in taxes, especially at the state and local levels. But some of the estimates of that cost have been grossly exaggerated. Moreover, the value of an immigrant to American society should not be judged solely on his or her fiscal impact.

Read the rest of the article here.