According to a report from the Cato Institute, immigrants, on average, contribute more in taxes than typical American children, the disabled, retirees, students, or workers.
This report, carefully curated, seems designed to catch the attention of busy politicians and reporters who are often influenced by competing interests from pro-immigration lobbyists and advocates for American prosperity.
The report released on April 15th claimed, “Immigrants pay more in taxes than the average person.”
However, the report cleverly shifts many of the costs associated with immigration onto Americans. While highlighting taxes paid by working immigrants, it overlooks the expenses incurred for immigrant children, like welfare and education.
The selected group of immigrants analyzed in the report appears to be more likely to be employed than the general American population, including a wide range from immigrant infants to elderly individuals.
These selective comparisons are acknowledged by the authors but not clearly explained.
One main reason immigrants contribute more in taxes is their higher likelihood of employment compared to the general American populace. So, even if their hourly wages are lower, they tend to work longer hours, leading to a higher overall income.
Stephen Camarota, a research director at the Center for Immigration Studies, adds that younger immigrants are often more likely to have children and utilize welfare services, which then places financial burdens on Americans instead.
“The aid immigrants receive for their U.S.-born children isn’t directly linked to immigration,” he mentioned.
Cato’s report states, somewhat subtly, that:
From 1994 to 2023, immigrants reportedly earned around $100,000 over 29 years and paid about 17 percent more in taxes per capita compared to U.S.-born individuals.
This messaging seems aligned with the interests of lobbying groups supporting Rep. Maria Salazar’s (R-Fla.) low-workforce bill, which seeks to boost corporate profits through extensive immigration rather than advancing high-tech industries.
The report’s libertarian perspective tends to gloss over various civic and macroeconomic costs related to reliance on immigration.
In the U.S., immigration is said to lower wages, escalate housing costs, and hinder family stability, which is crucial for sustained economic growth.
The federal immigration strategies are detrimental to communities and threaten democracy, trade, and political stability.
Additionally, immigration subsidizes businesses because lawmakers are compelled to borrow funds, shifting the costs onto taxpayers, facilitating low-wage immigrants in meeting basic needs.
Immigration can also lead to chaotic diversity that complicates the governance capabilities of everyday Americans compared to the well-funded lobbying efforts seen in Washington, D.C.
These conditions may produce political motives that lead some politicians to sidestep the challenging task of improving productivity and wealth for Americans. Consequently, both Democrats and some Republicans have shown a tendency to favor transferring future wealth and opportunities from average Americans to immigrants. The emphasis on remittances further detracts from the ability of Democrats to boost the U.S. and global economy through productivity and trade.
To Cato, this accounting approach is logical. Supporters likely perceive substantial short-term economic advantages from the influx of immigrant workers and consumers, regardless of the long-term implications for Americans.
For instance, a group of economists supporting immigration recently claimed investors are profiting approximately $20 billion annually from the 1.4 million immigrants currently under Temporary Protected Status.
The legal brief mentioned that employed TPS recipients earn about $36,039 annually, without noting that their lower wages often offset costs funded by taxpayer assistance programs.
According to these economists, immigrants in low-skill jobs are more probable to earn lower wages; yet, they significantly contribute to additional revenue for their employers compared to their American counterparts.
Cato’s approach is so favorable toward immigration that some advocates even frame the associated costs as positives.
For example, if migration raises housing and property tax costs, Cato interprets this as economic growth. While assessing the tax contributions of legalized immigrants, the report seems to overlook the potential future costs of welfare and assistance programs as these individuals age.
When immigrants lower average wages in America, Cato defaults to blaming Americans for reduced tax contributions. Immigrants are said to work under lower standards, leading to decreased salaries and an uptick in welfare needs among Americans, according to Camarota.
In sum, Cato’s response to the numerous civil and economic repercussions stemming from migration appears overly simplistic, suggesting that they presume an ability to eliminate the financial outlay propelled by immigration.
If immigration exacerbates the budget deficit, a proposed solution would be to further isolate the welfare state instead of the country, allowing Americans to enjoy economic benefits without incurring costs.
All the while, Cato’s arguments, sometimes criticized for comparing unlike entities, are promoted by media allies such as Google and Facebook, while political partners seek to counteract President Trump’s strategies for a high-tech economy with reduced immigration.
President Trump’s initiative represents a significant departure from the long-standing establishment approach, which, for years, has believed the simplest route to economic growth was by importing more workers, renters, and consumers from various regions globally.
