New analysis of U.S. taxpayer data suggests immigrants have been a major net financial gain for governments over the past three decades—helping the country avoid a far deeper debt and deficit problem.
A new report from the libertarian Cato Institute examined federal, state, and local data from 1994 through 2023 and concluded that immigrants—both naturalized citizens and non-citizens—paid substantially more in taxes than they received in government benefits. In total, the analysis estimates immigrants saved governments about $14.5 trillion over the 30-year period.
Cato also argued that immigration’s fiscal impact is large enough that, without immigrants, U.S. public debt would be at least 205 percent of GDP, nearly double the actual level recorded in 2023. For Cato, that comparison underscores how heavily overall government finances have depended on immigrants’ tax contributions.
“When you start looking at [immigration] as a source of benefit to the United States, then it totally changes the perspective,” David Bier, the institute’s director of immigration studies, told Newsweek. Instead of centering debate on removing immigrants, Bier said the focus should be on building an immigration system that places newcomers “in the position to be the most beneficial to our country.”
He argued that many current approaches move in the opposite direction—making it harder for immigrants to work or remain stable—when long-term fiscal gains depend on employment, income growth, and successful integration.
Why It Matters
Supporters of mass deportations—aimed at undocumented immigrants and, in some proposals, even some legal immigrants—often argue that immigration drains public resources. While some immigrants do receive benefits such as food assistance or unemployment support, many are authorized to work and contribute to tax revenue at significant levels. Cato’s findings align with other research in recent years that points to a net-positive fiscal contribution, including from many non-citizens.
What To Know
According to the report, immigrants generated nearly $10.6 trillion more in combined federal, state, and local taxes than the total government spending they induced over the period studied. Cato estimates this reduced the U.S. budget deficit by roughly one-third across those 30 years.
Without immigrants, the analysis concludes, the U.S. would currently be running a deficit of about $3 trillion. Bier said this challenges the idea that large-scale deportations would meaningfully solve government overspending, arguing that immigrants are more often helping reduce deficits than driving them.
“It’s really the main way in which immigration is attacked in the political sphere is saying it’s a burden on our society, and it’s really not,” Bier said. “These people are working and contributing and helping to reduce the debt and deficit.”
Cato also noted that deportations would be unlikely to shrink many major spending categories because large parts of government budgets are “fixed” or difficult to reduce quickly—such as defense spending and major federal programs. Instead, the study argued that immigrants help spread costs that would otherwise fall more heavily on U.S.-born citizens.
The report further found that immigrants have, on average, generated more in taxes and income than the typical U.S.-born resident—particularly in recent years. One factor is labor-force participation: immigrants were reported to be more than 12 percentage points more likely to be working than the U.S.-born population, in part because a larger share are of working age.
Low-Skilled and Undocumented Immigrants
Critics of low-skilled immigration have long argued that this group relies heavily on benefits. But Cato’s analysis found low-skilled immigrants still produced a positive net fiscal effect overall. It estimated low-skilled immigrants paid $11.5 trillion in taxes while receiving about $9.7 trillion in benefits—leaving roughly $1.8 trillion net.
Cato also argued the savings would be even larger once interest costs are included, since higher deficits would require the government to borrow more.
The report added that benefit eligibility for many immigrants is already limited, particularly for those without permanent residency or citizenship. It said eligibility has been further restricted under President Donald Trump’s One Big Beautiful Bill, which Bier suggested would increase the degree to which immigrant tax payments subsidize others.
Undocumented immigration is harder to measure because many workers do not file standard tax returns. Still, Cato argued undocumented immigrants contribute through payroll withholding when employed, since employers are required to withhold and remit taxes regardless of immigration status. The report estimated undocumented workers may have helped reduce deficits by about $1.7 trillion over the same period.
How Other Research Compares
Cato’s conclusions resemble parts of other recent analyses while diverging in emphasis. The Manhattan Institute, in October 2025 reporting, said the “average new immigrant reduces the federal budget deficit,” but also argued fiscal outcomes vary across immigration categories.
That report pushed for reform that reduces low-skilled immigration while expanding high-skilled pathways, based on the view that higher-skilled workers generate stronger fiscal gains. However, long-term immigration reform has remained slow-moving in Congress, with changes largely limited to narrower policy adjustments.
Meanwhile, a January 2026 report from the Brookings Institution warned that declining immigration could weaken economic growth, suggesting immigrants have driven much of the labor market expansion in recent years. Brookings also projected that consumer spending could fall by $60 billion to $110 billion over two years under reduced-immigration scenarios.
What People Are Saying
Jeremy Beck, co-president of immigration think tank NumbersUSA, told Newsweek that current policy “privatizes profits and socializes costs,” arguing businesses capture many benefits while workers and taxpayers carry burdens. He said immigration should prioritize “per capita prosperity over GDP” and argued enforcement against illegal employment should be a major focus.
Steven Camarota, research director at the Center for Immigration Studies, criticized Cato’s methodology, arguing it excludes costs linked to U.S.-born children of immigrants—such as education and welfare spending. In his view, excluding those costs can make a population with heavier benefit use appear fiscally positive.
Daniel Di Martino, a Manhattan Institute fellow, argued fiscal impacts should be an important—though not the only—criterion for immigration policy. He said a “well-designed policy mix” could improve federal finances while also supporting growth and easing assimilation pressures.
Representative Randy Fine, a Florida Republican, argued in a January statement supporting stricter limits on immigrant benefits that taxpayers should not fund non-citizens’ healthcare or other assistance, saying “Citizens come first. Period.”
What Happens Next
Republicans in Congress are expected to keep pressing for tighter restrictions on immigrant access to benefits, while continuing to pursue more aggressive deportation efforts for those without legal status. At the same time, a range of economists and policy analysts warn that sharply reducing immigration could weaken growth and consumer spending—raising the risk that fiscal pressures worsen rather than improve.
