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INTRODUCTION
1 In this report, when we refer to immigrants from Latin America and broader Latin America we are referring to those
from Latin America, the Caribbean, and Central America.
2 Jeffrey S. Passel and DVera Cohn, Pew Research Hispanic Trends Project, U.S. Population Projections: 2005-2050
(Feb. 11, 2008). Accessed Nov. 18, 2014, available here: http://www.pewhispanic.org/2008/02/11/us-population-projections-2005-2050/.
KEY
FINDINGS
1
Hispanics and Latin American immigrants are responsible for a large
portion of Americas overall purchasing power. In 2013, Hispanic households had an
estimated discretionary income, or purchasing power, of more than $580 billion. That figure
is equivalent to one out of every 10 dollars of purchasing power held in the United States that
year. Households headed by immigrants born in Latin America made up a sizeable portion of
that figure: We estimate their purchasing power totaled $314 billion that year.
2
The growing earnings of Hispanics and Latin American immigrants have
made them major contributors to U.S. tax revenue. In 2013, Hispanics contributed
almost $217 billion to U.S. tax revenues as a whole, including more than $78 billion in state and
local tax payments. Immigrants from Latin America contributed $117 billion in tax revenues
nationwide.That included $42 billion in state and local taxes and $75 billion in taxes to the
federal government.
3
In some states, Hispanics and Latin American immigrants now account
for a large portion of the discretionary income available and the tax revenues paid
by residents of the state overall. In both Texas and California, Hispanic families had more
than $100 billion in purchasing power in 2013, accounting for roughly one out of every five
dollars available in the form of discretionary income in the state that year. In Arizona, a state
with a rapidly growing Hispanic population, their earnings after taxes accounted for one-sixth
of the states purchasing power. In Florida, immigrants from Latin America alone contributed
more than one out of every eight dollars in tax revenue paid by residents of the state.
4
Immigrants from Latin America and Hispanics more generally play an
important role sustaining Americas Medicare and Social Security programs. In 2013,
Hispanics contributed an estimated $100 billion to Social Security and more than $23 billion
to the Medicares core trust fund. Immigrants from Latin America contributed more than $53
billion to Social Security, while paying in close to $12.5 billion to the Medicare program. Past
studies have indicated that in Medicare in particular, immigrants draw down far less than they
put in to the trust fund each year, making such tax contributions particularly valuable.3
3 Leah Zallman, Partnership for a New American Economy, Staying Covered: How Immigrants have Prolonged the
Solvency of one of Medicares Key Trust Funds and Subsidized Care for U.S. Seniors, (Aug. 2014). Available here: http://
www.renewoureconomy.org/wp-content/uploads/2014/08/pnae-medicare-report-august2014.pdf.
PART I
DEMOGRAPHIC
BACKGROUND
The U.S. Census Bureau estimates that there are approximately 53 million
Hispanics living in the United States.4 This represents almost 17 percent of the countrys
total populationthe highest share in U.S. history. Much of this population is made up of
Hispanics who came to our country from elsewhere. Over the past four decades, more than 24
million immigrants from Central America, Latin America and the Caribbean have immigrated
to the United States. Hispanicsboth those born here and those who immigratedplay
a valuable role maintaining Americas overall population growth and ensuring that there is
a young, working population supporting Americas 76.4 million aging Baby Boomers. The
2010 Census, for example, revealed that between 2000 and 2010, a 54 percent increase in the
Hispanic populations in the Great Plains offset double-digit population declines of nonHispanic whites in the region.5
In this report, our interest is on Hispanics and Latin American immigrant earners,
and specifically, the discretionary income they earn and the taxes they pay each year. Hispanics
make up an increasing proportion of the working-age population in the United States. More
than 38 million Hispanics are ages 16 or above, representing 15 percent of the working-age
population in America. Immigrants in our country from broader Latin America, a population
that often comes to fill jobs that few Americans are interested or able to perform,6 consistently
punch above their weight class in the workforce as well. While 6.8 percent of the countrys
total population was made up of such immigrants in 2013, they accounted for 9.0 percent of
the working population that year.
TABLE 1:
Size of Hispanic and Latin-American-Born Populations,
Overall and Employed Civilian Populations, 2013
Total Population
(in millions)
All Hispanics
53.0
22.1
21.5
12.9
US Overall
313.9
143.9
Percent Hispanic
16.9%
15.5%
6.8%
9.0%
Latin-American Born
As we look to the future, the size and importance of Hispanic and Latin-American
immigrant populations will likely only increase. A study by Pew Research Center found
that between 2008 and 2050 a vast majorityor 93 percentof all growth in the countrys
working-age population will be made up of immigrants and their U.S.-born children.7 Given
that almost half of all immigrants today identify as Hispanicand more than a quarter of
all new births in the country are to Hispanic mothersHispanics will continue to have an
expanding role in the workforce in the decades to come.8
4 3-Year Estimates from the 2011-2013 American Community Survey puts the Hispanic population of the United States at
52,952,497. Source: U.S. Census Bureau, American Communities Survey, 2014.
5 A. G. Sulzberger, Hispanics Reviving Faded Towns on the Plains, New York Times, (November 11, 2011). Accessed on
November 10, 2014, available here: http://www.nytimes.com/2011/11/14/us/as-small-towns-wither-on-plains-hispanicscome-to-the-rescue.html.
6 Research conducted by the Partnership for a New American Economy and the Brookings Institution has found that
immigrants often cluster at the low and high end of the skill spectrum. As more Americans seek out higher education,
immigrants also fill holes in our less-skilled workforce. See:
7 Pew Research Center, Second-Generation Americans: A Portrait of the Adult Children of Immigrants, Washington
D.C. (February 7, 2013). Accessed November 3, 2014, available here: http://www.pewsocialtrends.org/2013/02/07/second-generation-americans/.
8 J. Passel et al., Pew Research Center, Explaining Why Minority Births Now Outnumber White Births, Washington D.C.
(May 17, 2012). Accessed November 11, 2014, available here: http://www.pewsocialtrends.org/2012/05/17/explaining-whyminority-births-now-outnumber-white-births/.
PART II
Beyond their population size, Hispanics and immigrants from Latin America play a
large role driving the U.S. economy. Through their spending, they increase demand for goods,
services, and homes, helping businesses across the country grow and create jobs for Americans.
PURCHASING
POWER OF
HISPANICS AND
LATIN-AMERICAN
BORN POPULATION
TABLE 2:
National Estimates for Disposable Income of Hispanic and
Latin-American Born Populations, 2013
Aggregated Income
(in billions)
All Hispanics
$580.60
Latin American-Born
$313.50
$5,700
9 Walmart reported annual revenues of $476 billion for FY2014. Source: Walmart, Walmart 2014 Annual Report, (March
21, 2014). Accessed November 10, 2014, available here: http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf.
10 Apple reported annual revenues of $182 billion for the 12-month period ending on September 27, 2014. Source: Apple,
Inc., Apple Reports Fourth Quarter Results (October 20, 2014). Accessed November 10, 2014, available here: http://
www.apple.com/pr/library/2014/10/20Apple-Reports-Fourth-Quarter-Results.html.
11 General Electric reported annual revenues of $146 billion for 2013. Source: General Electric, GE Works: 2013 Annual
Report (February 2014). Accessed November 10, 2014, available here: http://www.ge.com/ar2013/pdf/GE_AR13.pdf.
FIGURE 1:
Putting 2013 Hispanic and Latin-American Born Purchasing Power Trends in Context
2013 PURCHASING POWER (IN BILLIONS)
$581
$314
$314
$182
ALL HISPANICS
LATIN-AMERICAN BORN
WALMART
APPLE
PART III
PURCHASING
POWER BY STATE
While these numbers are already impressive on a national level, when we look at
specific states, the percentages of state residents total spending power accounted for by
Hispanics and Latin American immigrants shows how important the Hispanic community is at
a state and local level as well. In California and Texas, states with large Hispanic communities,
the amount of Hispanic disposable income reaches more than $100 billion per state.
Californias Hispanic population has an estimated annual purchasing power of approximately
$152 billion, while Texas Hispanic community contributes as much as $109 billion in disposal
income to that states economy each year. In Florida, another state with a sizeable Hispanic
population, Hispanic consumers have an annual purchasing power of $50 billion, meaning that
approximately one out of every six dollars in that states economy as disposable income is in
the hands of Hispanic-led families.
FIGURE 2:
Hispanic Purchasing Power Across the United States, 2013
$0 $1B
$1B $2B
$2B $5B
$5B $10B
$10B $100B
$100B+
Source: Authors calculations from the American Community Survey, 3-Year Sample. For most states, the author uses the 2013 ACS survey to calculate results. For some of the
smaller states, however, 2012 data had to be used, due to data limitations. This group includes: Alaska, Delaware, Hawaii, Idaho, Iowa, Kentucky, Maine, Mississippi, Montana, New
Hampshire, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.
FIGURE 3:
Latin American Immigrant Purchasing Power Across the United States, 2013
$0 $1B
$1B $2B
$2B $5B
$5B $10B
$10B $100B
$100B+
NO DATA
Source: Authors calculations from the American Community Survey, 3-Year Sample. For most states, the author uses the 2013 ACS survey to calculate results. For some
of the smaller states, however, 2012 data had to be used, due to data limitations. This group includes: Alaska, Delaware, Hawaii, Idaho, Iowa, Kentucky, Maine, Mississippi,
Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.
TABLE 3:
Purchasing Power of Hispanics and Latin American Immigrants for Selected States
CALIFORNIA
Hispanic
Latin American-Born
38.2%
$151.8
19.6%
$75.6
9.8%
$772.0
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
9,943,086
38.2%
$109.2
21.7%
3,055,441
11.7%
$43.3
8.6%
26,049,971
100%
$502.4
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
4,491,988
23.4%
$56.4
16.2%
Latin American-Born
2,814,063
14.7%
$42.0
12.1%
All Residents
19,319,031
100%
$348.0
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
1,969,498
30.1%
$18.6
16.2%
569,580
8.7%
$6.8
6.0%
6,548,856
100%
$117.5
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
1,086,701
20.9%
$12.0
10.3%
273,163
5.3%
$3.6
3.1%
5,192,076
100%
$117.0
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
898,107
9.1%
$8.2
4.7%
Hispanic
Hispanic
Hispanic
All Residents
Hispanic
Latin American-Born
All Residents
GEORGIA
14,507,619
100%
Latin American-Born
COLORADO
Percent of Total
Purchasing Power
14.3%
All Residents
ARIZONA
Purchasing Power
(in billions)
5,428,494
Latin American-Born
FLORIDA
Percent of
Population
38,000,360
All Residents
TEXAS
Total Population
Hispanic
Latin American-Born
All Residents
503,580
5.1%
$6.9
3.9%
9,905,993
100%
$175.7
100%
TABLE 3 (CONTINUED):
Purchasing Power of Hispanics and Latin American Immigrants for Selected States
NEVADA
Hispanic
Latin American-Born
All Residents
NORTH CAROLINA
Hispanic
Latin American-Born
All Residents
UTAH
Hispanic
Latin American-Born
All Residents
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
749,368
27.2%
$7.7
15.2%
303,951
11.0%
$4.2
8.3%
2,754,148
100%
$50.8
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
848,933
8.7%
$7.2
4.1%
418,173
4.3%
$4.9
2.8%
9,749,266
100%
$175.4
100%
Total Population
Percent of
Population
Purchasing Power
(in billions)
Percent of Total
Purchasing Power
378,249
13.2%
$3.4
6.9%
143,034
5.0%
$1.8
3.6%
2,856,839
100%
$49.5
100%
Several studies have already shed light on the size and economic clout of Hispanics and Latin American immigrant populations.
Most recently, data analysis from the U.S. Census Bureau showed that Hispanics were the first ethnic group to show an increase in median real
incomes since the economic crisis of 2008: Between 2012 and 2013, the purchasing power of Hispanics in the U.S. rose by 3.5 percent, reaching
$40,963, while all other groups saw statistically insignificant changes. The same report also showed that Hispanics were also the only ethnic
group to show a significant decline in poverty over the same period12 A Pew Research Center study using the same dataset found that this
likely indicative of an improving labor market situation for Hispanics and increases in educational attainment as a group, especially as bettereducated and assimilated native-born Hispanics age into the workforce.13
It is also worth noting that the figures reported here are likely an underestimate of the full purchasing power of Hispanics and
immigrants from Latin America. The reason for this lies in both the chronic underreporting of income in the American Communities Survey
and inherent limitations of survey sampling. A U.S. Census Bureau study reported that the size of income shortfalls varies substantially
depending on the type of income. While wage and Social Security income underreporting is relatively small (5 to 8 percent), other forms of
income, such as interest or dividend income can be significantly underreported, to levels as high as 50 percent for some populations.14 Past
studies that have tried to account for such underreporting in Census Data have found far higher figures using other methods. For example, a
Selig Center report on the multicultural aspects of the U.S. economy estimated Hispanic purchasing power that at over $1.1 trillion per year.15
12 C. DeNavas-Walt and B. Proctor, United States Census Bureau, Income and Poverty in the United States: 2013 Current Population Reports, Washington D.C. (2014).
13 J. M. Krogstad, Pew Research Center, Hispanics only group to see its poverty rate decline and incomes rise, (September 19, 2014). Accessible at: http://www.pewresearch.org/
fact-tank/2014/09/19/hispanics-only-group-to-see-its-poverty-rate-decline-and-incomes-rise/.
14 J.C. Moore et al., U.S. Census Bureau, Income Measurement Error in Surveys: A Review, Washington D.C. (1997). Accessed on November 10, 2014, accessible here: https://www.
census.gov/srd/papers/pdf/sm97-05.pdf
15 J. Humpreys, The Selig Center, University of Georgia, The Multicultural Economy, Athens, GA (2013).
10
PART IV
TAX
CONTRIBUTIONS
OF HISPANICS
AND IMMIGRANTS
FROM LATIN
AMERICA
Providing increased demand in U.S. domestic markets is not the only way by which
Hispanics contribute significantly to the American economy. Hispanics in the U.S. and Latin
America-born immigrants are also major contributors to federal, state and local budgets, by
virtue of their role as taxpayers. Federal taxes paid by Hispanics and immigrants from Latin
America go towards funding federal servicesincluding the military, Social Security and
Medicarethat benefit all Americans. Meanwhile, through their contributions in state and
local taxes, Hispanics and Latin American immigrants help pay for critical local services like
school districts, police and fire safety, local road and street maintenance, as well as emergency
medical services.
TABLE 4:
National Estimates for Federal, State, and Local Taxes Paid by
Hispanics and Latin American Immigrants, 2013
Federal Tax
Contribution
(in billions)
Hispanics
$138.1
$78.2
$216.9
Latin American-Born
$74.9
$42.2
$117.1
$1,368.1
$770.5
$2,138.6
For the same states as we featured above, the numbers show similarly significant
portions of taxes are paid by Hispanic and Latin America-born households. In California,
Hispanics paid more than $24 billion in state and local taxes, or approximately 20 percent of
all state and local taxes for the state. Meanwhile, Latin American immigrants in California
contributed $12 billion in tax revenues to the state. In Texas, Hispanics contribute more than
21 percent of state and local tax revenue, or almost $11 billion dollars, while immigrants from
Latin America in the Lone Star State contribute well over $4 billion in state and local taxes.
11
TABLE 5:
Tax Contributions of Hispanic and Latin American Immigrants by State
CALIFORNIA
TEXAS
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$188.7
$37.1
$18.5
State/Local
$123.6
$24.3
$12.1
Combined Taxes
$312.3
$61.4
$30.6
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$116.4
$25.3
$10.0
State/Local
$50.2
$10.9
$4.4
$166.6
$36.2
$14.3
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$82.5
$13.4
$10.0
State/Local
$43.6
$7.1
$5.3
Combined Taxes
$126.1
$20.5
$15.2
Entire Population
(in billions)
Latin America-born
(in billions)
$27.7
$4.4
$1.6
Combined Taxes
FLORIDA
ARIZONA
COLORADO
Federal
State/Local
$14.2
$2.2
$0.8
Combined Taxes
$41.9
$6.6
$2.4
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$27.7
$2.8
$0.9
State/Local
$14.3
$1.5
$0.4
$42.0
$4.3
$1.3
Entire Population
(in billions)
Latin America-born
(in billions)
$41.4
$1.9
$1.6
Combined Taxes
GEORGIA
Federal
State/Local
$21.0
$1.0
$0.8
Combined Taxes
$62.4
$2.9
$2.4
12
TABLE 5 (CONTINUED):
Tax Contributions of Hispanic and Latin American Immigrants by State
NEVADA
Federal
State/Local
Combined Taxes
NORTH CAROLINA
UTAH
Entire Population
(in billions)
Latin America-born
(in billions)
$11.9
$1.8
$1.0
$5.5
$0.8
$0.5
$17.4
$2.6
$1.4
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$41.9
$1.7
$1.2
State/Local
$23.6
$1.0
$0.7
Combined Taxes
$65.5
$2.7
$1.8
Entire Population
(in billions)
Latin America-born
(in billions)
Federal
$11.8
$.82
$0.4
State/Local
$6.4
$0.4
$0.2
Combined Taxes
$18.1
$1.3
$0.7
13
14
PART V
CONCLUSION
This data shines light on the demographic and economic importance of Hispanics
in the United States today. While the figures for Hispanics are already impressivenearly one
in six people in the United States are Hispanic and more than one in 10 dollars of disposable
income can be found in their walletsthese numbers are expected to continue to grow
significantly in the coming decades. Hispanics currently are the youngest ethnic group on
average in the country.20 Whats more, two thirds of young Americas young Hispanics, those
between the ages of 16 and 25, were born in America.21 Given that U.S.-born Hispanics are
more likely to attain higher levels of education and go on to work in higher skilled, better
paid, jobs than their foreign-born counterparts,22 this makes it likely that the economic
power of Hispanics in the country will soon be much larger than documented here. In states
where Hispanics form a majority or a large plurality of all youths aged 16 to 25, such as New
Mexico (where they are 51 percent of all youth), California (42 percent), Texas (40 percent),
and Arizona (36 percent), this demographic shift could have particularly powerful economic
implications.23
Depending on what happens with immigration reformeither at the national
or state levelthe power of Latin American born immigrants could also continue to grow
as well. Some immigration reform proposals have discussed adding as many as 300,000
additional immigrant farm workers to our economy, 24 a group that typically is largely sourced
from Mexico or Central America.25 Given the absence of movement on the national level on
immigration reform in recent months, some states and localities are taking their own action
to welcome immigrants, helping them start new businesses or earn citizenship. The governor
of Michigan, for instance, recently established a state-wide Office for New Americans to
focus on attracting immigrant innovators and entrepreneurs, as well as legal immigrant
agriculture and hospitality workers, to help grow the states economy.26 Similar efforts are
underway in Nashville and Atlanta, where mayors have recently announced plans to create
citywide executive offices focused on immigrant integration.27 28 If state and local efforts are
successful, the earnings of immigrants from Latin America could see a substantial boost:
Gaining citizenship has been estimated to raise the earnings of a migrant by an average of 8
to 11 percent above what they would have earned otherwise,29 a factor that could provide a
substantial drive up the purchasing power of immigrants in the years to come, as well as their
contributions to Americas tax base.
20 J. Passel et al., Pew Research Center, Explaining Why Minority Births Now Outnumber White Births, Washington D.C.
(May 17, 2012). Accessed November 11, 2014, available here: http://www.pewsocialtrends.org/2012/05/17/explaining-whyminority-births-now-outnumber-white-births/.
21 Pew Research Center, Between Two Worlds: How Young Latinos Come of Age in America, Updated Edition Washington D.C. (July 1, 2013). Accessed on November 11, 2014, available here: http://www.pewhispanic.org/2009/12/11/betweentwo-worlds-how-young-latinos-come-of-age-in-america/.
22 Ibid.
23 J.M. Krogstad and M.H. Lopez, Pew Research Center, Hispanic Nativity Shift: U.S. births drive population growth as
immigration stalls, Washington D.C. (April 29, 2014). Accessed on November 19, 2014, available here: http://www.pewhispanic.org/2014/04/29/hispanic-nativity-shift/.
24 Brad Plumer, Wonkblog, Heres how the U.S. Population Would Change Under Immigration Reform (June 20, 2013),
accessed Nov. 15, 2014, available here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/20/immigration-projections/.
25 United States Department of Labor, The National Agriculture Workers Survey, Summary of 2010 Data. Accessed
Nov. 15, 2014, available here: http://www.doleta.gov/agworker/report9/chapter1.cfm.
26 Michigan Office for New Americans [Website], About Us page. Accessed Nov. 15, 2014, available here: http://www.
michigan.gov/ona/0,5629,7-323-67452---,00.html.
27 Nashville.gov, Mayor Launches Office of New Americans (Sept. 22, 2014). Accessed Nov. 15, 2014, available here:
http://www.nashville.gov/News-Media/News-Article/ID/3277/Mayor-Launches-Office-of-New-Americans.aspx.
28 Jeremy Redmon, The Atlanta Journal-Constitution, Atlanta Mayor Announced Plans for Welcoming New Arrivals
(Sept. 17, 2014). Accessed Nov. 15, 2014, available here: http://www.ajc.com/news/news/state-regional-govt-politics/atlanta-mayor-announces-plans-for-welcoming-new-ar/nhPXQ/.
29 Manuel Pastor and Justin Scoggins, Center for the Study of Immigrant Integration, University of Southern California,
Citizen Gain: The Economic Benefits of Naturalization for Immigrants and the Economy, (December 2012). Summary
fact sheet available here: http://csii.usc.edu/documents/Citizen_gain_infographic_web.pdf.
15
APPENDIX:
METHODOLOGY
The statistical data for this report comes mainly from the 2013 American
Communities Survey (ACS), using data on individuals and household income. For the purposes
of this report, spending power or purchasing power is defined as annual household income
minus federal, state, and local taxes. While data was readily available at the national level for
aggregated household income for all Hispanic households in the country, the survey does
not track that data for Latin-American immigrant households specifically. To get the gross
income of Latin America-born households, we multiplied ACS data on the average household
income from a variety of sources (salary, wages, retirement income, etc.) by the number of
Latin American households reporting receiving such income. The totals for each category of
income were then aggregated to give an estimate of total gross income for all Latin Americanborn households in the country. This process was repeated at the state level to give individual
estimates for each state. There were several states30 for which the 2013 ACS did not include
data on income for Latin America-born households. As such, data from the 2007-2012 ACS
was used to generate the purchasing power of all groups (All residents, Hispanics, and Latin
America-born) for the states in question. Within this group, there were also six less populous
states that lacked income data for immigrants from Latin America in the 2012 ACS, likely due
to the small sample size of their Latin America-born population. As such, we were unable to
generate estimates for Latin American households in these states.
It is important to note that Latin America-born in this report does not equal foreignborn Hispanic residents in the United States, but is rather a proxy for such as data from the
2013 ACS was not available for this exact demographic. Official definitions of Latin America
entail that immigrants from some countries, such as Haiti and Brazil, that are not normally
considered Hispanic are included in this group for this report.
Disposable household income was calculated using the aggregated total household
income for each demographic group minus a percentage equal to the incidence of tax for
each state, including federal tax. Our estimate of average national-level taxes (17.4 percent)
was taken from a 2012 Congressional Budget Office report, while our average incidence of
state and local taxes, including income, sales, property, etc. were taken from 2013 study by
the Tax Foundation, a nonpartisan research think tank based in Washington, DC.31 This Tax
Foundation study also included an average state and local tax incidence for the entire country,
which was used to calculate national-levels of annual disposable income.
Rates for Hispanic and Latin American immigrants contributions to Social Security
and Medicare were calculated using a flat tax rate of 12.4 percent for Social Security and 2.9
percent for Medicare. This is similar to the methodology used in several other studies on
immigrant contributions to these government funds, including a report prepared for the
Partnership for a New American Economy by an instructor at Harvard School of Medicine.32 33
30 These states are: Alaska, Delaware, Hawaii, Idaho, Iowa, Kentucky, Maine, Mississippi, Montana, New Hampshire, North
Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.
31 Tax Foundation, State and Local Tax Burdens: All States, One Year, 1977 2011 (October 23, 2012). Accessed November 3, 2014, available here: http://taxfoundation.org/article/state-and-local-tax-burdens-all-states-one-year-1977-2011.
32 Center for American Progress, Improving Lives, Strengthening Finances: The Benefits of Immigration Reform to
Social Security, Washington D.C., (June 14, 2013). Accessed on November 3, 2014, available here: http://cdn.americanprogress.org/wp-content/uploads/2013/06/SocialSecurityImmigration-2.pdf.
33 Leah Zallman, Partnership for a New American Economy, Staying Covered: How Immigrants Have Prolonged the
Solvency of One of Medicares Key Trust Funds and Subsidized Care for U.S. Seniors, New York, NY, (August 2014). Accessed November 3, 2014, available here: http://www.renewoureconomy.org/wp-content/uploads/2014/08/pnae-medicare-report-august2014.pdf.