The Fiscal Burden of Illegal Immigration on United States Taxpayers | 2023 Cost Study
Report by FAIR Research | March 2023
Key Highlights
- At the start of 2023, the net cost of illegal immigration for the United States – at the federal, state, and local levels – was at least $150.7 billion.
- FAIR arrived at this number by subtracting the tax revenue paid by illegal aliens – just under $32 billion – from the gross negative economic impact of illegal immigration, $182 billion.
- In 2017, the estimated net cost of illegal migration was approximately $116 billion. In just 5 years, the cost to Americans has increased by nearly $35 billion.
- Illegal immigration costs each American taxpayer $1,156 per year ($957 after factoring in taxes paid by illegal aliens).
- Each illegal alien or U.S.-born child of illegal aliens costs the U.S. $8,776 annually.
- Evidence shows that tax payments by illegal aliens cover only around a sixth of the costs they create at all levels in this country.
- A large percentage of illegal aliens who work in the underground economy frequently avoid paying any income tax at all.
- Many illegal aliens actually receive a net cash profit through refundable tax credit programs.
Introduction
This cost study report is currently the only comprehensive examination of the financial impact of illegal immigration in the United States. Every day, hundreds of millions of dollars in American taxpayer money are spent on costs directly associated with illegal immigration. Only a small fraction of these costs is ever recouped from taxes paid by illegal aliens, with the rest falling on the shoulders of American citizens and legal immigrants.
Our aim in this report is to show the American people the fiscal burden of illegal immigration at every level and across nearly all aspects of life. These costs range from emergency medical care to in-state tuition; from incarcerating illegal aliens in local jails to federal budgets that pay out billions in welfare every year. Because there are so many different ways that money is spent on illegal aliens at both the state and local levels, the information in our report is otherwise hard to find (or even intentionally hidden). This report supersedes FAIR’s 2017 cost study and highlights massive increases in spending related to illegal immigration that were implemented while American citizens deal with an uncertain economy.
The Number of Illegal Immigrants in the US
Estimating the fiscal burden of illegal immigration on the U.S. taxpayer depends on the size and characteristics of the illegal alien population. FAIR defines “illegal alien” as anyone who entered the United States without authorization or anyone who unlawfully remains once his/her authorization has expired. Unfortunately, the U.S. government has no central database containing information on the citizenship status of everyone lawfully present in the United States.
The overall problem of estimating the illegal alien population is further complicated by the fact that the majority of available sources on immigration status rely on self-reported data. Given that illegal aliens have a motive to lie about their immigration status in order to avoid discovery, the accuracy of these statistics is dubious at best. All of the foregoing issues make it very difficult to assess the current illegal alien population of the United States.
However, FAIR now estimates that there were at least 15.5 million illegal alien residents as of the beginning of 2022. This estimate takes into account drastic, ongoing increases in illegal immigration under the Biden administration. This estimate also includes some categories of individuals without legal status, like DACA recipients and parolees, who are illegal aliens under law but misleadingly excluded from many estimates. For more information on how we reached this figure, refer to the FAIR study “How Many Illegal Aliens Live in the United States?”
The Cost of Illegal Immigration to the United States
At the federal, state, and local levels, taxpayers shell out approximately $182 billion to cover the costs incurred from the presence of more than 15.5 million illegal aliens, and about 5.4 million citizen children of illegal aliens. That amounts to a cost burden of approximately $8,776 per illegal alien/citizen child. The burden of illegal immigration on U.S. taxpayers is both staggering and crippling, with the gross cost per taxpayer at $1,156 every year.
Illegal aliens only contribute roughly $32 billion in taxes at the state, local, and federal levels. This means that the net fiscal cost of illegal immigration to taxpayers totals approximately $150.7 billion.
In 2017, FAIR estimated the net cost of illegal immigration at approximately $116 billion. This means that in just 5 years, the cost of illegal immigration has increased by nearly $35 billion. This rapid increase is a consequence of the ongoing border crisis and a lack of effective immigration enforcement. The sections below further break down and explain these numbers at the federal, state, and local levels.
Total Governmental Expenditures on Illegal Aliens
Total Tax Contributions by Illegal Aliens
Total Economic Impact of Illegal Immigration
Federal
Federal Spending
The approximately $66.4 billion in federal expenditures attributable to illegal aliens is staggering, and constitutes an increase of 45 percent since 2017. This amounts to roughly $3,187 per illegal alien, per year.
FAIR believes that every concerned American citizen should be asking our government why, in a time of increasing costs and shrinking resources, it is spending such large amounts of money on individuals who are not authorized to be in the United States. This is an especially important question in view of the fact that the taxes paid by illegal aliens offset very little of the enormous costs stemming from their presence in the country.
Total Federal Educational Expenditures:
| Primary and Secondary Education – I-A | $3,020,696,000 |
| Limited English Proficiency (LEP) – Title III | $580,895,000 |
| Migrant schooling – Title I-C | $239,418,000 |
| Head Start | $2,768,080,000 |
| Total | $6,609,089,000 |
Total Federal Medical Expenditures
| Uncompensated Hospital Expenditures | $8,153,000,000 |
| Medicaid Births | $1,596,902,000 |
| Medicaid Fraud | $7,997,566,000 |
| Medicaid for U.S.-Born Children of Illegal Aliens | $5,385,007,000 |
| Total | $23,132,475,000 |
Total Federal Justice Enforcement Expenditures
| Federal Incarceration | $1,670,374,000 |
| Enforcement and Removal Operations (ERO) | $4,118,902,000 |
| Customs and Border Protection | $8,565,574,000 |
| Other ICE Operations | $1,715,897,000 |
| State Criminal Alien Assistance Program (SCAAP) | $234,000,000 |
| Executive Office for Immigration Review (EOIR) | $622,809,000 |
| Alien Minors | $8,006,000,000 |
| Byrne grants | $4,180,000 |
| DOD National Guard Deployment | $191,625,000 |
| Total | $25,129,361,000 |
Total Federal Welfare Programs
| Meals in Schools | $1,550,108,000 |
| Supplemental Nutrition Assistance Program (SNAP) | $5,757,872,000 |
| Women, Infants, and Children (WIC) | $999,961,000 |
| Temporary Assistance for Needy Families (TANF) | $1,430,527,000 |
| Child Care and Development Fund (CCDF) | $911,307,000 |
| Supplemental Security Income (SSI) | $600,350,000 |
| Public Housing | $334,442,000 |
| Total | $11,584,567,000 |
Total Overall Federal Expenditures
| Federal Educational Expenditures | $6,602,733,000 |
| Federal Medical Expenditures | $25,129,361,000 |
| Federal Law Enforcement | $23,132,475,000 |
| Federal Welfare Programs | $11,584,567,000 |
| Total | $66,449,136,000 |
Federal Taxes
Taxes collected from illegal aliens help offset fiscal outlays and therefore must be included in any examination of the cost of illegal immigration. However, illegal alien advocates frequently cite the alleged large tax payments made by illegal aliens as a justification for their unlawful presence and as a reason itself to grant them amnesty. That argument is nothing more than a red herring. Such claims rarely look at the costs associated with illegal immigration, and instead only focus on the amounts contributed to the economy and paid in taxes.
Most studies grossly overestimate both the taxes actually collected from illegal aliens and, more importantly, the net amount of taxes actually paid by them (i.e., the amount of money collected from illegal aliens and ultimately kept by the federal government). A predominant reason for this is that in recent years, the United States has focused on apprehending and removing almost solely criminal aliens (and since President Biden took office, many criminal aliens are now protected from deportation as well). Because of this, the majority of illegal aliens seeking employment in the United States now live in an environment where they have little fear of deportation even if discovered.
Federal Receipts from Illegal Aliens
| Income Taxes | $4,146,850,000 |
| Social Security and Medicare Taxes | $19,527,768,000 |
| Excise taxes | $932,864,000 |
| Total Receipts | $24,607,482,000 |
Credits Given to Illegal Aliens
| ACTC | $5,400,000,000 |
| EITC | $2,987,987,000 |
| Total Credits | $8,387,987,000 |
Net Federal Receipts from Illegal Aliens
| Total Receipts | $24,607,482,000 |
| Total Credits | $8,387,987,000 |
| Net Federal Receipts from Illegal Aliens | $16,219,495,000 |
Net Federal Impact of Illegal Aliens
| Total Federal Outlays | $66,449,136,000 |
| Net Federal Receipts | $16,219,495,000 |
| Net Fiscal Impact | $50,229,641,000 |
State and Local
The total fiscal burden of illegal immigration on state taxpayers has now reached a staggering $115.6 billion, which is 30 percent more than it was in 2017. The primary reasons for this, aside from a rapid increase in the illegal alien population, are that a number of states have opted to expand access to state welfare, education, and medical programs to illegal aliens. These expansions have led to taxpayers paying tens of billions in additional funding to cover these costs.
Concerningly, as will be seen in the following section, the taxes paid by illegal aliens to state and local governments fall far short of making up for the numerous additional state-funded benefits they are receiving. Moreover, with many states set to begin offering even more benefits to illegal aliens, as mentioned previously, these costs are only expected to increase even further.
State and Local Spending
Total State Educational Expenditures
| K-12 Public School | $70,401,000,000 |
| Post-Secondary Tuition Losses/Financial Aid | $2,789,760,000 |
| Total Educational Expenditures | $73,190,760,000 |
Total State Medical Expenditures
| Medicaid births | $937,863,000 |
| Uncompensated Medical Expense | $4,501,175,000 |
| Improper Medicaid Payouts | $4,696,983,000 |
| Medicaid for Citizen Children of Illegal Alien | $3,162,623,000 |
| Medi-Cal Expansion | $4,802,094,000 |
| Other State Programs | $526,098,000 |
| Total Medical Expenditures | $18,626,836,000 |
Total State Administration of Justice Expenditures
| Policing | $8,952,291,000 |
| Judicial | $3,720,668,000 |
| Corrections | $6,213,721,000 |
| State Border | $3,135,000,000 |
| Total | $22,021,680,000 |
| SCAAP funds from Federal Government | $210,240,000 |
| Net Justice Expenditures | $21,811,440,000 |
Total State Welfare Expenditures
| Child Care and Development Fund (CCDF) | $171,033,000 |
| Temporary Assistance to Needy Families (TANF) | $1,432,105,000 |
| Meals in Schools | $376,556,000 |
| Total Welfare Expenditure | $1,979,694,000 |
Total State and Local Expenditures
| Total Education Expenditures | $73,190,760,000 |
| Total Medical Expenditures | $21,811,439,000 |
| Total Administration of Justice Costs | $18,626,836,000 |
| Total Welfare Expenditure | $1,979,694,000 |
| State and Local Total | $115,608,730,000 |
State and Local Taxes Collected
As with federal costs, state and local costs are offset — to some degree — by the taxes illegal aliens pay. As noted in the Federal taxes portion of this section, proponents of illegal immigration argue that the taxes paid by illegal aliens result in a net boon to state and local coffers. However, this is a spurious argument. Evidence shows that the tax payments made by illegal aliens fall far short of covering the costs of the services they consume.
It is also important to note that calling illegal alien tax payments a net receipt is a mischaracterization. The overall wage depression inflicted on local labor markets by the presence of large numbers of illegal aliens willing to work for less than market rates has far-reaching fiscal implications that are often not quantified on average balance sheets. Low-wage workers generally access more government benefits than higher-paid employees. Furthermore, illegal aliens also tend to remit large portions of their earnings back to their home countries, and thus less money is incorporated back into local economies and less is paid in local sales and excise taxes. However, because this study looks at the fiscal impacts of illegal immigration, and tax collections are a fiscal offset, we do our best to estimate how much of the fiscal costs borne by taxpayers are reduced by taxes paid by illegal aliens.
Illegal aliens are not typical taxpayers. First, the large percentage of illegal aliens who work in the underground economy avoid paying any income tax at all. Those that do work in the formal economy often receive back more than they pay to the federal government through refundable tax credit programs. Finally, the average earnings of illegal alien households are considerably lower than earnings of legal aliens and native-born workers, thus they typically fall into the lowest tax brackets.
Net State Taxes Collected
| Income Tax Receipts: | $5,728,653,000 |
| Property Tax Receipts: | $3,152,993,000 |
| Fuel Tax Receipts: | $1,440,000,000 |
| Sales and Excise Tax Receipts: | $4,850,494,000 |
| Total State Taxes Paid: | $15,172,140,000 |
The state tax payments made by illegal aliens fall far short of the costs incurred by their presence, as detailed below. These figures negate the argument that illegal aliens represent a net economic benefit to the United States.
| Total State and Local Expenditures | $115,608,729,000 |
| Total State and Local Tax Receipts | $15,172,140,000 |
| Net State and Local Fiscal Impact | $100,436,589,000 |
Combined Federal State Cost Tables
Total Expenditures
| Total Federal Expenditures | $66,449,136,000 |
| Total State and Local Expenditures | $115,608,729,000 |
| Total National Expenditures | $182,057,865,000 |
Total Tax Contributions
| Net Federal Taxes Paid | $16,219,495,000 |
| Net State and Local Taxes Paid | $15,172,140,000 |
| Total Tax Contributions | $31,391,635,000 |
Total Cost of Illegal Immigration
| Total National Expenditures | $182,057,865,000 |
| Minus Total Tax Contributions | $31,391,635,000 |
| Total Fiscal Cost of Illegal Immigration on U.S. Taxpayers: | $150,666,230,000 |
Notes About this Report
Information transparency is essential to good governance. It encourages a well-informed citizenry to hold their elected officials responsible and motivates those officials to implement policies that benefit their constituents instead of special interest groups. Furthermore, citizens have the right to know pertinent information, presented in a clear and comprehensible manner, on issues that impact them. Unfortunately, there is a concerning lack of transparency and openness when it comes to the issue of illegal immigration.
While preparing this study, we often had to grapple with a paucity of easily accessible official data. Many state and federal entities do not publish detailed data that they collect, making it difficult to reliably separate illegal aliens from citizens or lawful immigrants in many of the fields covered in this report. We have also encountered cases where the current administration has revoked or restricted documents published by previous administrations in order to reduce the visibility of data which shines a negative light on their immigration policy agenda. Extremely helpful publications like the Alien Incarceration Report, which documented foreign criminals in custody in the United States, are no longer updated under the Biden administration. This kind of subtle de facto censorship is highly unethical and does not serve the interests of the American public.
Thankfully, we were able to find most of the necessary information to complete this study by analyzing existing databases and publications from the federal and state/local governments as well as other reputable organizations and academic institutions. However, as is noted throughout this report, there were a few instances where we were unable to obtain enough data to make reliable estimates. For example, illegal immigration imposes a significant direct cost on the United States in the form of gang-related crime and trafficking of drugs and humans, but thanks to jurisdictional differences and “sanctuary” policies that protect criminal illegal aliens in many states or localities, this cost often remains a “known unknown.” For other topics, like post-secondary education, we had to stitch sources together and create new methodologies in order to calculate our estimates because, while the relevant data is tracked, it is fragmented across different sources.
So, why are Americans being kept in the dark? Primarily because the political and ideological influence of the open-borders lobby, both within and outside the federal government, holds significant sway over the Biden administration and many state governments. This “hear nothing, see nothing, say nothing” attitude is rooted in the hope that if the American public doesn’t have easy access to valid information regarding the impacts of illegal immigration, they will accept the lie that no problem exists.
In carrying out this study, FAIR is advancing the belief that the American people have a right to transparent and accurate information so that they are fully informed of what is occurring in their country and how much it costs them.
FAIR made every effort to source the data in this report from government agencies and testimony from government officials, using these as the foundation of our estimates. When official data is unclear or unavailable, FAIR looked to research generated by credible, non-partisan organizations and academic institutions. On the rare occasions that a calculation must be estimated and/or assumed, we offer a detailed reasoning for the estimation so that readers can examine the relevant information and judge our conclusions for themselves. For the sake of maximum accuracy, we have noted various areas where we believe it is impossible to estimate a cost.
Throughout this study, we have taken caution to never overestimate totals, and have chosen to err on the lower side of cost estimates, and the higher side of tax contributions, when our calculations resulted in a range instead of a static figure. We do this to ensure that our cost figures do not extend beyond what the evidence can empirically prove. Combining this with the fact that there are some costs that cannot be reliably estimated, it can be safely assumed that the actual cost of illegal immigration is considerably higher than the final tally offered here. Given current trends – rapidly increasing illegal immigration, increased federal and state government spending, inflation, and the fact that numerous state benefits are set for expansion to unauthorized migrants – the fiscal burden of illegal immigration is sure to grow even higher in the near future.
Every effort was made to find and utilize the most recent data available as a basis for calculations; thus, the majority of the data is drawn from sources covering between fiscal years (FY) 2020 and 2022. However, the COVID-19 pandemic, and the massive government spending binge it caused, complicated our calculations. In cases when spending on various programs was sharply but temporarily increased during the pandemic, we preferred to utilize pre-pandemic data and adjust accordingly for inflation and/or other developments in order to paint a more accurate picture of the static costs. We do not include pandemic-related spending measures unless they were enacted as permanent programs. However, we make a point to highlight these costs in their relevant sections so that readers are aware of their impacts.
An essential part of our calculations relies on FAIR’s latest illegal alien population estimate, which is 15.5 million (20.9 million when the U.S.-born children of illegal aliens are included) as of the beginning of 2022. Our estimate is higher than those offered by most mainstream immigration research organizations, most of which stick to the oft-repeated “10-11 million” figure, despite record illegal immigration over the past couple of decades and even further surges over the past few years. Most mainstream estimates fail to take into account the constant rate of growth in this demographic, overestimate the outflow rate of illegal aliens, and/or have deceptively lowered the rate at which they believe the U.S. Census Bureau undercounts illegal aliens. Moreover, for ideological reasons, many groups also misclassify the increasing influx of unaccompanied alien minors (UAMs), Temporary Protected Status (TPS) recipients, Deferred Action for Childhood Arrivals (DACA) beneficiaries, and parolees as being in the United States “legally.” This is a dishonest characterization because such individuals have not received any lawful immigration status. Rather, these illegal aliens have merely received temporary and discretionary reprieves from removal and lack a clear pathway to citizenship.
Finally, it’s important to note that FAIR includes costs incurred by the minor, U.S.-born children of illegal aliens, as these costs are fully attributable to their parent’s unlawful residence in the United States. Many mass-immigration apologists claim that this is an unfair inclusion, as the estimate does not include any long-term contributions made by these minors once they become adults. However, further research has demonstrated that the children of migrants – especially illegal aliens – no longer see significant economic improvement as was the case several decades ago. Therefore, if we did attempt to account for their future tax contributions, we would also need to account for their reliance on state and federal benefits programs. This would likely only serve to increase our cost estimates further, not drastically lower it as many open border advocates insist.