By Lauren Pescatore
Following the passage of the House and Senate GOP tax reform bills, economic experts and advocacy groups have argued that both versions benefit corporations and wealthy Americans at the expense of low-wage working families. Now, a recent report from UnidosUS shows that among those who stand to lose from tax reform, immigrant households may be hardest hit.
Both versions of the GOP tax bill restrict eligibility requirements for low-income tax credits that benefit millions of immigrant workers and their children each year. Currently, workers with an Individual Taxpayer Identification Number are eligible for the Child Tax Credit (CTC), and a Social Security number (SSN) is required to claim the Earned Income Tax Credit (EITC). Under both versions of the plan, filers would be required to provide a work-authorized SSN to claim the refundable portion of the CTC. The House bill also requires a work-authorized SSN to claim the refundable portion of the EITC. According to UnidosUs, these proposals would limit CTC and EITC benefits for millions of undocumented workers and their nearly four million U.S.-citizen children.
Despite their immigration status, these workers make substantial contributions to the U.S. economy each year. A recent report from the Institute on Taxation and Economic Policy found that undocumented immigrants pay roughly $11.74 billion annually in state and local taxes, and the most recently available Social Security Administration figures show that these workers and their employers together contribute about $13 billion in payroll taxes.
By targeting undocumented immigrants’ eligibility for the CTC and EITC, the GOP tax plan acknowledges that these families work and pay taxes, but penalizes them for doing so. UnidosUs argues that Congress should instead enact tax reform that “raises revenue to invest in our economy, is progressive to ensure all pay their fair share, supports working families and children to reduce poverty, and promotes economic mobility and asset-building for those struggling to get ahead.”
House and Senate leaders are aiming to complete their work on tax reform by the end of December.
To read the full report, click here.