Lauren Carroll
By Lauren Carroll October 27, 2016

Clinton: Undocumented workers pay more than Trump in federal income taxes

Some undocumented immigrants pay more in federal income taxes than Donald Trump, said Hillary Clinton Oct. 26 at a rally in Tampa, Fla.

Less than two weeks before Election Day, the Democratic presidential nominee chastised her opponent for his hardline stance on immigration.

"By the way, one-half of undocumented workers pay federal income taxes, which means they are paying more federal income taxes than Donald Trump pays," she said.

Experts told us Clinton’s claim is grounded in educated estimates about undocumented immigrants and knowledge of Trump’s past tax practices. But they’re still just estimates.

Undocumented workers

There is no official count of undocumented workers who pay federal income taxes. But Clinton’s claim — that half of all undocumented workers pay federal income taxes — is an educated assumption that many experts use, said Kim Rueben, senior fellow at the Urban-Brookings Tax Policy Center.

"As far as we can vet it, it is true," Rueben said.

For reference, the Tax Policy Center estimates that 56 percent of the entire population pays federal income tax, while 44 percent don’t.

Social Security is one way we know undocumented workers pay federal income taxes. The Social Security Administration estimated that in 2009, 3.1 million unauthorized workers paid into Social Security via payroll tax, even though most will not be able to collect those benefits. In addition to Social Security, payroll taxes also withhold federal income taxes from a worker’s paycheck.

There’s also the Individual Taxpayer Identification Number, or ITIN, which people who are unable to obtain Social Security numbers use to pay income taxes, regardless of immigration status. In 2013, 4.3 million people filed tax returns using ITINs. ITIN filers paid $9 billion in payroll taxes in 2014.

Most people with an ITIN are undocumented immigrants, said Ruth Wasem, a public policy professor at the University of Texas. The number of people signing up for ITINs and paying taxes that way has grown over the past few years, particularly because many immigration reform proposals require undocumented immigrants to prove they have been paying taxes in order to qualify for some sort of legal status, Wasem said.

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Between those who contribute via ITIN, others who have taxes withheld from their paycheck, and any overlap between the two groups, Wasem said Clinton’s claim that half of all undocumented workers pay federal income taxes is likely a low ball estimate.

Donald Trump

While experts can make educated guesses about how many undocumented workers pay federal income taxes, there’s still too much we don’t know about Trump’s tax returns to speculate how much he presently pays in federal income taxes. Going against decades of tradition for presidential nominees, Trump has so far refused to release his tax returns.

We know there have been at least a few years Trump didn’t pay federal income taxes and that tax write-offs are generally beneficial to real estate developers like Trump. Three pages of Trump’s 1995 tax returns, uncovered and verified by the New York Times, show it’s possible he was able to legally avoid paying federal income tax for as much as 18 years.

A tax provision known as net operating loss allows people to report business losses on their personal tax returns as a deduction. So if a person’s reported net operating loss is equal to or larger than their personal income, that person does not have to pay income taxes. Trump’s $916 million loss reported in his 1995 tax return could counteract any income he earned that year and beyond, up to 18 years total under IRS rules in 1995, according to the New York Times.

Going back a few more years, a 1981 report by New Jersey gambling regulators analyzed five years of Trump's finances as part of his efforts to get a casino license for a proposed casino-hotel complex. The report says Trump paid federal taxes for three of those five years, 1975-77, but he did not pay federal income tax in 1978 and 1979.

So in the years Trump paid zero federal income taxes, undocumented immigrants who paid any federal income taxes presumably would have paid more than him.

But Clinton’s claim is phrased in the present. Without Trump’s current tax returns, we simply don’t know what his tax burden is today. So in the most recent tax year, we don’t know who paid more in federal income tax, Trump or an undocumented worker.

Our ruling

Clinton said, "One-half of undocumented workers pay federal income taxes, which means they are paying more federal income taxes than Donald Trump pays."

While there is no official figure, experts estimate that about half of all undocumented workers pay federal income taxes, if not more. So in a year when Trump does not pay federal income taxes, which has been the case in the past, undocumented immigrants who do federal pay income taxes would pay more than him.

But Clinton makes it seem as if this is a present state, and we don’t know anything about Trump’s current tax situation because he has not made his tax returns public. For that reason, we have no way of comparing Trump’s federal income tax payments to those of any given undocumented immigrant.

We rate Clinton’s claim Half True.

Our Sources

CQ, Clinton Tampa rally transcript, Oct. 26, 2016

Atlantic, "The Truth About Undocumented Immigrants and Taxes," Sept. 12, 2016

IRS, "Immigration and Taxation," 2014

U.S. Treasury, "Substantial Changes Are Needed to the Individual Taxpayer Identification Number Program to Detect Fraudulent Applications," July 16, 2012

Social Security Administration, "Effects of Unauthorized Immigration on the Actuarial Status of the Social Security Trust Funds," April 2013

Social Security Advisory Board, "The Impact of Immigration on Social Security and the National Economy," Dec. 2005

Government Accountability Office, "Refundable Tax Credits," May 2016

Tax Policy Center, "A Closer Look At Those Who Pay No Income Or Payroll Taxes," July 11, 2016

Public Policy Institute of California, "Unauthorized Immigrants in California," July 2011

Institute on Tax and Economic Policy, "Undocumented Immigrants’ State and Local Tax Contributions," July 2013

New York Times, "Does Donald Trump Pay Taxes? Here’s What We Know," Sept. 27, 2016

New York Times, "Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found," Oct. 1, 2016

PolitiFact, "Factsheet: Donald Trump’s tax returns," Oct. 3, 2016

PolitiFact, "How much do undocumented immigrants pay in taxes?" Oct. 2, 2016

Phone interview, University of Texas professor Ruth Wasem, Oct. 27, 2016

Phone interview, TPC senior fellow Kim Rueben, Oct. 27, 2016

Phone interview, Social Security Advisory Board economist Joel Feinleib, Oct. 27, 2016

Email interview, ITEP communications director Jenice Robinson, Oct. 26, 2016

Email interview, Clinton spokesman Josh Schwerin, Oct. 27, 2016

Email interview, Trump spokesman Steven Cheung, Oct. 27, 2016

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Clinton: Undocumented workers pay more than Trump in federal income taxes

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