In the past year, the fiscal impacts of immigrants have again become a matter of public and political debate. Attention has focused on specific programs and policies, as well as the broader question of whether the taxes immigrants pay cover the public services they use. Estimating the economic cost or benefit of immigrants -legal or illegal, recent or long-term- is extremely difficult. The data required to develop estimates for local areas, states, or the nation are generally unavailable. Consequently, researchers must fill in the gaps with assumptions. Researchers often base estimates on assumptions and the process is not inherently biased. However, in most of the current studies, the assumptions maximize the apparent costs of immigrants. Alternative assumptions-chosen because of their plausibility, not because they drive the apparent cost of immigrants up or down- often produce very different results.
Fiscal impacts of immigrants last received widespread attention from the research community about a decade ago. The major studies done through 1991 calculating the public sector impacts of immigrants did not produce a consistent picture across all levels of government. (See Rothman and Espenshade (1992) for an excellent review of these studies.)
Nonetheless, some generalizations can be made. Most national studies encompassing all levels of government suggest that immigrants do not fiscally burden the native population. At the state level, the picture is mixed partially because states assume varied degrees of responsibilities for social services. At the local level, analyses from the 1970s and 1980s invariably found immigrants to be a net fiscal burden at the local level.
Several recent studies were produced by government agencies interested in "recovering" the costs of immigrants and non-profit groups committed to reducing levels of immigration. The four principal new studies are:
This paper carefully reviews Huddle's methodology for estimating revenues generated by immigrants, corrects the logical and conceptual errors in his methodology, and develops new estimates of revenues generated by immigrants. The correct calculations show that immigrants pay over $70 billion in taxes- or over $50 billion more than Huddle estimates. Balancing the corrected revenue estimates against Huddle's inflated estimates of costs and displacement shows that immigrants incur no overall net fiscal deficit.
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