Claim: Undocumented Immigrants Do Not Pay Taxes and Deplete Medicaid and Social Security Benefits
One of the most persistent myths surrounding immigration in the United States is the claim that undocumented immigrants do not pay taxes and somehow drain the system by collecting Medicaid and Social Security benefits meant for U.S. citizens. Those claims are not only inaccurate but harmful, as they grossly misrepresent the reality of immigrants’ contributions to the U.S. economy. In truth, most immigrants pay taxes and contribute significantly to Social Security, often without ever receiving any benefits in return.
As to the latter, the Social Security Board of Trustees have projected that by 2035, the Social Security Administration will no longer be able to fully cover the benefits owed to Americans unless Congress takes action. Some high-profile figures, including former President Donald Trump during last month's presidential debate, have pointed to undocumented immigrants as the cause of the Social Security fund's depletion.
“These millions and millions of people coming in, they are trying to put them on Social Security. He will wipe out Social Security,” Trump claimed about President Joe Biden during the debate in Atlanta.
The situation is nearly the complete opposite.
Immigrants Do Pay Taxes—A Lot of Them
Regardless of their immigration status, or lack of legal status, the vast majority of immigrants in the U.S. pay taxes. This includes federal income tax, Social Security and Medicare taxes, sales tax, property tax, and more. Even undocumented immigrants, who are often accused of skirting the tax system, contribute billions in taxes each year. In 2022 alone, undocumented immigrants paid $96.7 billion in federal, state, and local taxes according to the Institute of Taxation and Economic Policy.
For those working without legal status, many use an Individual Taxpayer Identification Number (ITIN) to file their taxes. This system allows them to pay taxes even though they do not have a Social Security number, further disproving the notion that immigrants are somehow taking advantage of the U.S. system.
Immigrants Pay into Social Security but Rarely Benefit
Another major misconception is that undocumented immigrants are receiving Social Security benefits meant for U.S. citizens. The truth is quite the opposite. Many immigrants pay into Social Security through payroll taxes but never will receive the benefits of their payments because only individuals with legal status can receive those benefits. In 2010, for example, the Social Security Administration estimated that payments from undocumented workers accounted for about $12 billion in tax revenue for Social Security.
Since undocumented immigrants cannot legally claim Social Security benefits, their payroll taxes help to support the system for U.S. citizens. In essence, immigrants are bolstering the financial health of Social Security, all while knowing they never will reap the benefits themselves.
Why Do Immigrants Contribute Knowing They May Never See the Benefits?
The question arises: why do immigrants continue to pay into a system from which they may never benefit? The answer is multifaceted.
First, paying taxes provides a form of documentation for many immigrants. Filing taxes serves as proof of their presence in the U.S. over a certain period of time, which can be crucial when applying for future legal status or demonstrating continuous residence in the country. In addition, if an immigrant seeks legal immigration status in the future, providing tax records can help show that they have been law-abiding and contributing members of society.
Second, many immigrants view paying taxes as a civic duty. Contributing to the U.S. tax system, even if they do not directly benefit, can be seen as a way to legitimize their presence and demonstrate “good moral character” as members of the community. For some, it also is a way to lay the groundwork for potential future rights, such as access to education, health care, or the possibility of immigration reform that might one day grant them legal status.
Immigrants Help Sustain Social Security for Future Generations
The reality is that immigrants, by paying into Social Security without drawing benefits, are helping to keep the system solvent. With the aging U.S. population and declining birth rates, the future of Social Security has been a growing concern. Immigrant contributions are a lifeline, helping to keep the trust fund afloat. Without these contributions, the Social Security system would face even greater challenges in meeting its obligations to current and future retirees.
The Misconception About Immigrants and Medicaid Access
Another common misconception is that undocumented immigrants freely access Medicaid, overburdening the system. However, Medicaid excludes undocumented immigrants, except in specific emergency cases. Medicaid recipients must prove citizenship to prevent unauthorized access, with recipients needing a passport, birth certificate, or similar documents to verify status. While this aims to save federal funds, social services officials note that it mostly adds unnecessary barriers for U.S. citizen recipients, rather than addressing any significant issue with undocumented immigrants using Medicaid.
The notion that immigrants do not pay taxes and are draining Social Security and Medicaid benefits is simply untrue. In fact, immigrants—both documented and undocumented—contribute billions of dollars to the tax system each year, often without ever seeing any direct benefits. Their contributions are vital to the health of programs like Social Security, which U.S. citizens rely on. It is important we acknowledge the crucial role immigrants play in upholding the very systems that benefit all Americans.
Do not let people demonize immigrants. Base your decisions on the facts, not fear.