By LSSNCA volunteer, Yusra Abdelmeguid. This blog was written for what would have been Tax Day 2020 on April 15. The deadline for tax returns in now July 15.
From living in struggles to living in resilience
Roughly tens of thousands of refugees from around the world resettle here in the United States each year. For many of them, the first few months in the US is spent learning a new language, adjusting to their new cultural norms, and moving past trauma. But after their adjustment period is over, refugees become very prosperous members of society.
According to Hamutal Bernstein of the Urban Institute, “Resettled refugees and immigrants have entered the US on humanitarian grounds. They have been admitted for safety and refuge from violence, torture, or discrimination, not to contribute to our workforce.” But contrary to what many believe, refugees and immigrants are amongst the top for labor force participation and many of them have come to start their own businesses.
Bernstein goes on to argue “there is a gap in what the current policy debate is and what the reality of refugees that are here is, after a period of adjustment refugees integrate in different ways — they’re working at really high rates, the longer they’re here, the more they earn, the better their English gets.” Many of the refugees and immigrants that come over are highly skilled, and highly educated people who had no choice but to flee for their lives from their home countries.
The Benefits of having refugees and immigrants in the US Economy
Over the past few years, the Trump administration has also disparaged refugees and immigrants as burdens on society who are incapable of integrating, even going so far as to claim that Syrian refugees are secretly ISIS members bent on undermining the US. When in fact, a report from Notre Dame economists William Evans and Daniel Fitzgerald finds that “over their first 20 years in the United States, refugees who arrived as adults aged 18-45 contributed more in taxes than they received in relocation benefits and other public assistance.”
According to research by the National Bureau of Economic Research (NBER), citing the Notre Dame report, the US spends an average of $15,148 in relocation costs and $92,217 in social benefits over an adult refugee’s first 20 years here. Over that period, the average adult refugee pays $128,689 in taxes — $21,324 more than the benefits received.
Undocumented but still a Factor
It’s not only documented immigrants and refugees that contribute to the US economy and tax system. Contrary to what many may say, undocumented immigrants, make a huge contribution as well. According to a report on the National Immigration Forum, an analysis based on the U.S. Census and other data estimated that undocumented immigrants paid $11.7 billion in state and local taxes. Of course, if they had an accessible pathway to a legal status they would contribute more because more of their work would be on the books. Many young undocumented immigrants who grow up in the US and participate in the Deferred Action for Childhood Arrivals program, also known as DACA, end up becoming major contributors and an economic boost for the US. According to the NIF article these individuals pay an estimated $1.6 billion in state and local taxes. If DACA expires without Congress passing a permanent solution for these individuals, states and localities collectively face a loss of almost $800 million in tax revenue. That is because if DACA were to end, many of them would lose their privilege to work, which would cause them to start working “under the books” for income.
Regardless of what many may think, immigrants, documented and undocumented, and refugees pay huge contributions to the economy. Without these contributions, the United States government would see a decline in many aspects to the economy and tax revenue.
CARES Act Contains Important Changes to Spur Giving to Non-Profits
- Allows individuals, who do not itemize deductions, to contribute up to $300 to LSSNCA and deduct the full amount from your gross income
- Lifts the limitations on individuals, who do itemize deductions, from 60% of adjusted gross income to 100%
- There is no income tax payable on gifts of long-term capital gains property and an individual can deduct the full fair market value of the gift