As the immigration debate begins again with renewed vigor in Washington, new research shows that the number of filed tax returns and the income of immigrants can be boosted by getting a green card.
The authors of the study, Ethan Lewis, and Elizabeth Cascio from Dartmouth College examined how granting permanent residency status in the US impacted on income tax by looking at the state of California’s experience with the 1986 Immigration Reform and Control Act. They discovered that green cards resulted in previously undocumented immigrant residents filing income tax returns in the state at more or less the same rate as other Californians and that the distribution of green cards to around 1.3 million undocumented immigrants in the state resulted in about 700,000 more state income tax returns being filed per year.
But, the new returns had generated little in extra revenue by the end of the 1990s, although the paper, which the National Bureau of Economic Research chose to circulate, pointed out that they succeeded in raising the earnings of families with children via new federal Earned Income Tax Credit claims.
According to the authors, Californians also saw an increase in annual earned income tax credit (EITC) transfers, by around $500 million initially, and eventually by as much as $1 billion in the years following the expansion of EITC in 1994. Green cards feature in the explosive immigration debate in Washington, with President Donald Trump wanting to abolish the current lottery system.