Washington, DC – Below is a column by Maribel Hastings from America’s Voice en Español translated to English from Spanish. It ran in several Spanish-language media outlets earlier this week:
This Tax Week, the negative consequences of the agreement between the Internal Revenue Service (IRS) and ICE, to share information about undocumented taxpayers, carries special urgency, both in matters of privacy as well as the loss of billions of dollars in federal, state, and local tax payments if people without documents stop paying taxes or are deported.
Last week, the Institute on Taxation and Economic Policy (ITEP) presented an analysis that concludes that “every 10-percentage point drop in the income tax compliance rate of undocumented immigrants would lower federal tax revenue by $8.6 billion per year, and state and local tax collections by $900 million per year.” That’s a combined reduction of $9.5 billion annually.
A thirty percentage point drop in the tax compliance rate would lead to a $25.9 billion annual reduction in payments to the federal government and $2.6 billion to state and local governments.
These figures should alarm the Trump administration, which has proposed not only an anti-immigrant policy but one that is, in many cases, illegal and unconstitutional, in its obsessive crusade against immigrants of color.
The IRS-ICE agreement allows the agency charged with collecting taxes to share data, which until now has been kept secret, with the immigration agency — data about the contributors who fill out their tax declarations using Individual Taxpayer Identification Numbers (ITINs), which the IRS gives out to some categories of noncitizens who cannot obtain a Social Security number. The idea is to locate them and deport them.
Various high-level IRS officials, including the acting IRS Commissioner, Melanie Krause, resigned because the agreement clearly violates federal laws that protect the privacy of taxpayers’ information, independent of their immigration status. Only Congress can request that the information be revealed under special circumstances, but not for immigration matters.
The agreement should also worry citizens and authorized residents because no one knows to what end the federal government wants to access tax information. Ignoring these developments, and arguing that they will only affect undocumented people, is playing with fire. This contributes to eroding protections and individual rights, especially before a Trump administration that neither respects due process, nor what the courts rule, including the highest court in the land.
This has been proven in Trump’s reluctance to bring back a legal Maryland resident, Salvadoran Kilmar Ábrego García, who was deported “by mistake” to the infamous CECOT prison in El Salvador, even though the nation’s Supreme Court ruled that the administration should “facilitate” the return of the young man who is married to a U.S. citizen and the father of three U.S. citizen children.
But to analyze the possible effects of the IRS-ICE agreement on government coffers in just dollars and cents, we do not have to go very far. These days, stories abound in the media of accountants saying that their undocumented clients are asking if it would be safe to file their taxes, in the face of fear that they will be detained and deported. Or experts warning about the loss of revenue at all levels.
According to the American Immigration Council, “in 2023, households led by undocumented immigrants paid $89.8B in total taxes. This includes $33.9B in state and local taxes and $55.8B in federal taxes.” In 2022, combined taxes totaled almost $100B, according to ITEP.
Also in 2022, “undocumented immigrants paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes,” ITEP reported. These are benefits to which they are not entitled.
With the IRS-ICE agreement and mass deportations, Trump, once again, shoots the US economy in the foot.
The original Spanish version is here.
