Mass Deportation May Cost US GDP $4 Trillion
Zeeshan Javaid:
Rochester NY: The presence of undocumented immigrants in the United States presents both challenges and opportunities. Implementing policies that facilitate their integration into the formal economy—through tax compliance programs, temporary work permits, and pathways to legalization—can generate significant revenue and bolster economic stability.
The United States is home to approximately 11 million undocumented immigrants, constituting about 3.3% of the total population and 23% of the foreign-born population.GDP grew by 2.52%, higher than previous estimates
This demographic plays a significant role in the U.S. economy, particularly in sectors such as agriculture, construction, and hospitality. However, their undocumented status presents challenges in terms of legal integration and revenue generation.
Undocumented immigrants are integral to the U.S. labor force, with approximately 8.3 million employed in 2022, representing about 4.8% of the total workforce.
Undocumented workers constitute a significant portion of the agricultural workforce, contributing to the production and affordability of food.
They play a vital role in meeting the labor demands of the construction industry, influencing housing development and infrastructure projects.
Their involvement in the hospitality and service sectors supports the functioning of restaurants, hotels, and domestic services.
Despite their contributions, undocumented immigrants often face exploitation due to their legal status, resulting in lower wages and limited access to labor protections.
The Center for American Progress estimates that deporting all undocumented workers could reduce U.S. GDP by approximately $4.7 trillion over a decade.
On the other hand, the American Immigration Council (AIC) estimates that mass deportation would cost the federal government between $400 billion and $600 billion, encompassing apprehension, detention, legal processing, and transportation.
In the third quarter of 2024, the U.S. GDP increased at an annual rate of 3.1%, reflecting robust economic activity.
In fiscal year 2022, federal revenue was approximately $4.92 trillion, equating to 17% of GDP.
According to the U.S. TREASURY fiscal data, tax revenue accounted for 16.2% of GDP in 2023, slightly below the historical average of 17%.
Immigration law experts believe that encouraging undocumented immigrants to obtain Individual Taxpayer Identification Numbers (ITINs) would facilitate tax payments, increasing federal and state revenues.
One of the senior immigration laws experts, Mr. Thomas Vincent speaking with this scribe said that while implementing programs that allow undocumented workers to declare income and pay back taxes without fear of deportation could enhance tax compliance.
He further maintained that by establishing a legalization process that includes fines for prior unauthorized entry could generate substantial revenue while providing a legal status to millions.
The economy expert, Mr. Shawn Ben believes that implementing consumption taxes on goods and services predominantly used by immigrant communities could indirectly increase revenue contributions.
Removing a substantial portion of workers from key industries could lead to severe labor shortages, disrupting production and services.
He was of the view that the presence of undocumented immigrants in the United States presents both challenges and opportunities.
Implementing policies that facilitate their integration into the formal economy—through tax compliance programs, temporary work permits, and pathways to legalization—can generate significant revenue and bolster economic stability.
