🌅 Immigrants Are Subsidizing the Government

SOURCE

Cato Institute

WHAT TO KNOW

• A new study by the right-leaning Cato Institute analyzed three decades of federal, state, and local government budgets to provide the first-ever assessment of the total fiscal impact of all immigrants on the U.S. government debt and deficit, finding immigrants have paid more in taxes than they receive in government benefits each year since 1994 (when data collection began). Over the past three decades, immigrants have paid $24.2 trillion in taxes while triggering just $13.6 trillion in government spending, generating a net fiscal gain of $10.6 trillion.

WHY IT MATTERS

• The study found the economic benefit of immigrants didn’t stop there, as the $10.6 trillion net gain meant governments didn’t have to borrow as much money to offset deficit spending, resulting in smaller interest payments on the avoided debt that reduced government borrowing costs by $3.9 trillion. That means immigrants produced a total savings of around $14.5 trillion over the past three decades. Over the same period, the U.S. population without immigrants cost governments around $44 trillion, meaning immigrants cut U.S. budget deficits by nearly one-third in real dollar terms.

CONNECT THE DOTS

• We’ll leave you with the closing remarks of the study’s lead author: “Overall, the main conclusion of our paper is that there is nothing systematically wrong with U.S. immigration policy regarding the fiscal effects of immigrants. There is nothing unsustainable about the U.S. immigration system. We could have scaled immigration as it existed without burdening government budgets. For years, nativists in Congress and the [Trump] administration have wrongly claimed that immigrants are behind the growth in debt and that the U.S. immigration system allows foreigners to take advantage of Americans’ generosity. Our data completely repudiates this view. Immigrants are subsidizing the U.S. government.”