A new fiscal analysis by the Cato Institute concludes that immigrants have been a long-running net positive for government budgets, generating far more in taxes than they received in public benefits over the last three decades.
The report, covering 1994 through 2023, finds that immigrants paid more in taxes than they received in benefits in every year measured.
Across federal, state, and local budgets, the authors estimate immigrants generated $24.2 trillion in tax revenue while inducing $13.6 trillion in costs, producing a net gain of nearly $10.6 trillion.
Factoring in reduced borrowing and lower interest costs, Cato puts total fiscal savings at about $14.5 trillion in real 2024 dollars.
In 2023 alone, immigrants paid about $1.3 trillion in taxes and received $761 billion in benefits, and the report estimates annual fiscal savings reached $878 billion.
The Cato study also concludes that without immigrants, the total public debt across all levels of government would be at least 205% of GDP, nearly double the actual level in 2023.
The main objections raised are against the modeling used in the research and the available data, which the authors admit are limitations of the research.
The research used a National Academies-style fiscal framework, which allocates tax revenue and spending on individuals, treating large categories such as “pure public goods costs” differently than those that increase more proportionally with population size.
It is also acknowledged that estimating undocumented immigrants’ fiscal impact is difficult, relying on assumptions and indirect measures.
In the background, the authors write, “Immigration politics is often driven by the assumption that immigrants are a burden on the public purse, especially those with lower skill levels.”
But Cato’s statistics show otherwise; low-skilled immigrants, defined as those who don’t possess a bachelor’s degree, still contributed a positive fiscal balance, and the $6.3 trillion figure contributed by noncitizens was due to the fact that they received fewer benefits.
The report summarizes its key finding with the following sentence: “In short, immigrants have helped reduce deficits by spreading fixed government costs and providing an abundance of tax revenues.”
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