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Analysis: Immigrant status change could mean millions in tax revenue for NY

Granting legal status to immigrants who entered the United States illegally could net New York $224 million in additional state and local tax revenues, mirroring a national spike in contributions, according to a new analysis of fiscal and census data.

The report, released Wednesday by the progressive Institute on Taxation and Economic Policy in Washington, D.C., and the liberal Fiscal Policy Institute in Manhattan, anticipates annual contributions would rise by $2.1 billion across all 50 states from income deductions, sales taxes, levies on products, services and property.

"It's important for policymakers to know that undocumented taxpayers are making very substantial contributions to state and local governments right now and that those contributions would increase substantially after immigration reform," said Matthew Gardner, the Institute on Taxation and Economic Policy's director.

Those immigrants make up about 5 percent of the workforce and more than half already pay income taxes, according to various estimates. Their wages are expected to rise as more join the tax rolls. About 11.2 million unauthorized immigrants live in the United States.

However, many of those families would cost the states in social services because studies have shown a majority of their head of households have low education levels and are paid low wages, said Steven Camarota, research director of the Center for Immigration Studies, a Washington group opposed to legalization.

"They are not going to become a net fiscal benefit," Camarota said. "There's no reason to expect they are going to become largely middle class."

David Dyssegaard Kallick, immigration research director at the Fiscal Policy Institute, said there is no better alternative than for all those immigrants to become taxpayers.

"As long as we make sure we don't create a new undocumented population, legalizing the people already here is the right thing to do," Kallick said, "and it's also a positive development for the government treasury."

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