Workers without legal papers still pay taxes
In a few weeks, children throughout Oregon will head back to school. It may surprise you to learn that money for the teachers to instruct our kids comes in part from undocumented workers in Oregon.
With anti-immigrant action and rhetoric emanating from the Trump administration, it is important for Oregonians to take stock of the contributions undocumented workers make to our state's economy. One of the ways they contribute is through the taxes they pay.
It is estimated that those living in Oregon without proper documentation number some 100,000, a figure that has not changed much in recent years. That amounts to about 3 percent of the state's population. Despite their relatively small numbers, undocumented immigrants perform vital work in certain industries, such as agriculture, hotel and food services. Undocumented workers in Oregon are estimated to earn about $1.5 billion per year, much of it undoubtedly spent on goods and services purchased at Oregon businesses.
Some of that income, in turn, helps cover the salaries of Oregon teachers.
How? One way is when undocumented Oregonians pay property taxes. Like other residents of our state, undocumented workers pay property taxes directly when they own a home, or indirectly when they rent. Property taxes are an important source of revenue for Oregon schools.
Another way undocumented Oregon workers help pay for teachers is through the taxes they pay on their earnings. Without a doubt, undocumented workers pay income taxes when their employer withholds earnings, like they do for other employees, or when workers file taxes at the end of the year, or both. Personal income taxes are distributed to school districts throughout the state and are the primary way Oregon pays for its teachers.
Undocumented Oregonians also contribute when they purchase some goods that are taxed in Oregon.
All in all, undocumented working Oregonians contribute about $81 million in state and local taxes per year, according to recent estimates by the Institute on Taxation and Economic Policy (ITEP). To put that in perspective, that is enough to hire 925 Oregon teachers. And these figures do not include the federal income taxes undocumented workers pay that come back to Oregon through federal education funding to states.
Undocumented Oregonians would contribute even more if they were to gain legal status under comprehensive immigration reform. When previously undocumented workers become authorized, they tend to earn more and, indeed, spend more. With greater earnings and consumption, they contribute more in property taxes, income taxes and consumption taxes.
It turns out that much-needed comprehensive immigration reform would substantially boost the tax contributions of currently undocumented Oregonians. ITEP estimates reform would result in nearly 50 percent more in state and local taxes paid by Oregon's undocumented residents. Reform means these Oregonians would contribute even more to funding our teachers
Janet Bauer is a policy analyst with the Oregon Center for Public Policy. You can contact her and learn more about the organization at ocpp.org.