Illegal aliens not paying fair share of taxes, study says

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Foreign-born people living in the region are paying their fair share of taxes, but illegal aliens and those with temporary protected status aren't, according to a study released yesterday.

In 1999, the year studied by the District-based Urban Institute, foreign-born households accounted for 17.7 percent of all taxes paid by area residents -- a figure nearly identical to their share of the total population in 2000, which was 17.4 percent.

But the average illegal alien household and those with temporary protected status paid less than 2 percent of the region's taxes, even though they made up more than 4 percent of households.

Illegal aliens "pay fewer taxes because they have lower incomes and because their compliance rate [voluntarily filing of income taxes by themselves or by employers] is somewhat lower than our other immigrant groups," said Michael Fix, vice president of the Migration Policy Institute. "And their incomes are lower in large part because many have low levels of education and limited English skills."

Randolph Capps, a senior research associate at the Urban Institute, estimates that about 55 percent of illegal aliens are paying into Social Security and Medicare by using fake Social Security numbers. The remaining 45 percent are not paying those taxes because their employers, who are not filing income taxes, are paying the illegals under the table, he said.

However, researchers yesterday said illegal aliens do contribute to state and local taxes -- such as sales tax on cigarettes and alcohol, auto taxes, property taxes and utility taxes -- which help pay for schools and hospitals.

But some observers said the study is flawed because it does not attempt to weigh tax payments against the cost of social services, education and other expenses linked to immigration.

Researchers in most cases lumped legal immigrants and illegal aliens into one category, failing to identify the specific effects that illegal aliens' tax contributions, or lack thereof, have on the region's economy, critics said.

Steven A. Camarota, research director of the Center for Immigration Studies, a District-based group that favors tougher immigration policies, wrote a study in 2004 that found illegal aliens cost the federal government $26.3 billion in services in 2002 but paid only $16 billion in taxes.

Illegal aliens that year created a net fiscal deficit of $10.4 billion, or $2,700 per illegal alien household, he said. The costs reflected a burden on government services such as Medicaid, medical treatment for the uninsured, food-assistance programs, the federal prison and court systems, and federal aid to schools.

"It's not irrelevant, but it's kind of half the equation, really," said Mr. Camarota, who estimated that granting legal status to illegal aliens would allow unskilled workers who avoid taxes more access to public services, inflating the deficit to $29 billion.

Researchers yesterday said that relatively large populations of Asians, Middle Easterners and Europeans in the Washington area tend to earn more income, and by virtue, pay more in taxes than most native-born Americans, helping to offset the low tax payments of illegals and poor immigrants.

• This article is based in part on wire service reports.