A massive new fiscal deep dive finds that immigrants have poured far more into American tax coffers than they have drawn out in benefits over the last three decades, and that conclusion plays out very differently in a city built on immigrant labor like San Diego. The headline takeaway directly undercuts the familiar claim that immigrants are a drag on public budgets, and local advocates and tax pros say the figures look a lot like what they already see every spring at tax time and in everyday labor markets.
What the report found
According to a report by the Cato Institute, immigrants generated roughly $24.2 trillion in tax revenue from 1994 through 2023, while associated government spending totaled about $13.6 trillion. That pencils out to a net surplus of $10.6 trillion. Once the authors factor in lower interest costs because the government needed to borrow less, they say the overall fiscal benefit climbs to about $14.5 trillion. By their estimate, immigrants trimmed U.S. budget deficits by around one-third over that span, and the gap between what immigrants pay in and what they receive has grown in recent years.
In San Diego, tax preparers and worker advocates greeted the numbers with more of a nod than a gasp. “Immigrants pay a lot of taxes,” said Adrian Espinoza, an IRS enrolled agent who serves many immigrant households. He told NBC 7 San Diego that recent changes to the tax code have actually left some of his clients paying more. Alor Calderon, who leads San Diego’s Employee Rights Center, said the stubborn public image of immigrants as "takers" does not match what frontline workers and organizers report.
Big annual numbers, local implications
The Cato paper also zooms in on the most recent year in its sample. For 2023, the authors estimate immigrants paid about $1.3 trillion in taxes while receiving roughly $761 billion in government benefits. They estimate that immigrants accounted for about $4.8 trillion of U.S. GDP that year. The study warns that removing large numbers of immigrant workers would shrink economic output and push up borrowing costs, in turn adding to fiscal strain.
How the model works
Cato says it refreshed a fiscal model originally designed by the National Academies to track cumulative tax payments and government spending tied to immigrants and their children across federal, state, and local budgets. The National Academies' 2017 analysis is widely used as a reference point for studies of immigration’s budgetary impact, and Cato’s white paper explicitly applies that framework to the 1994-2023 period. The authors note, and outside experts often agree, that estimates over such long time frames rest on assumptions about employment patterns, eligibility for benefits, and how to assign shared public costs.
What critics and commentators are saying
National coverage has zeroed in on the eye-catching totals and the political fight over immigration policy and enforcement surrounding them. Reporting in outlets such as Fortune highlights the same drivers Cato emphasizes, including higher employment rates among immigrants and lower average costs for pensions and education, while noting that some analysts push back with different assumptions about long-run expenses and enforcement costs.
On the ground in San Diego, the takeaways are less theoretical. Local advocates say the findings bolster long-standing calls for policies that protect immigrant workers and make it easier for them to stay on the right side of the tax system. Tax preparers, meanwhile, say that fear still looms large, especially worries about possible data sharing between the IRS and immigration authorities, and that those concerns keep some residents from filing at all. As NBC 7 San Diego reports, the fiscal story in the Cato paper feels familiar to people watching payrolls, sales taxes, and neighborhood storefronts across the region.
