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By Dan Gooding
Associate News Editor
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New analysis of U.S. taxpayer data shows that, over 30 years, immigrants saved the government $14.5 trillion, preventing a fiscal crisis.
The report, from the libertarian Cato Institute, looked at federal, state and local government data stretching from 1994 through 2023, finding that immigrants generated more in taxes than they received in benefits.
Without immigrants—naturalized citizens and non-citizens—U.S. public debt would be at least 205 percent of GDP, nearly double the actual 2023 level, Cato found, arguing that this alone meant the country was reliant on immigrants’ contributions.
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“When you start looking at [immigration] as a source of benefit to the United States, then it totally changes the perspective,” David Bier, director of immigration studies at the Cato Institute, told Newsweek. “Rather than figuring out ‘How do we get rid of these people?’ you focus on ‘How do we make sure that they're in the position to be the most beneficial to our country?’ I think that's the conversation that we need to start having.
“It is: What's the immigration system that is going to put people who come here in the position to be most beneficial to the economy and society, as opposed to, right now, kind of the opposite approach is in vogue, where we're trying to kick people out of their jobs and make it so difficult on them that they want to leave. That's not really putting them in the best position to become successful and increase their contributions to our economy.”
Why It Matters
Those advocating for mass deportations of illegal and some legal immigrants have often claimed that they are a drain on government resources and benefits. While some immigrants do rely on food assistance and unemployment benefits, many have permission to work in the U.S. and contribute billions in taxes. The Cato study backs other similar reports in recent years that have shown a net-positive financial contribution from non-citizens.
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What To Know
The report released Tuesday analyzed U.S. Census Bureau data, along with information on taxes, and found that immigrants generated nearly $10.6 trillion more in federal, state and local taxes than they induced in total government spending and cut the country’s budget deficit by about one-third over the 30-year period.
Without immigrants, the study found, the U.S. would currently be in a deficit of about $3 trillion. Bier said this showed that the theory that deporting large numbers of immigrants would solve government overspend was incorrect.
“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.”
Part of the reason that deportations likely would not reduce government spending is that many functions are fixed, Cato found, including U.S. military spending and NASA programs. Instead, immigrants help to spread the financial burden that would otherwise rest solely on American citizens.
For the past 30 years, immigrants have also generated more in taxes and income than the average person, with that gap growing in recent years. Immigrants were more than 12 percentage points more likely to be in work than the U.S.-born population, also, in part, because more immigrants were of working age.
Those on the right who have argued against low-skilled immigration have frequently claimed that this group has become a drain on government benefits, and there are multiple bills in front of lawmakers in Washington as of February 2026 aimed at the issue.
Cato’s study found the theory not to be the case, with a focus on low-skilled immigrants finding that they paid $11.5 trillion in taxes while receiving about $9.7 trillion in benefits, leaving roughly $1.8 trillion left over. The analysis also suggested even greater savings were possible, when factoring in the potential interest the government would have to pay on any debt.
While many immigrants without legal permanent residency or U.S. citizenship were already unable to receive certain benefits, eligibility has been further restricted under President Donald Trump’s One Big Beautiful Bill, meaning, Bier said, immigrants will be further benefiting others in the U.S. through their tax dollars.
As for illegal immigrants, data is more difficult to come by as their legal status often means tax filings are nonexistent. However, Cato suggested that they were still contributing when working illegally, as employers were still required to withhold taxes and pay local, state and federal governments. This potentially helped to reduce U.S. deficits by $1.7 trillion over the same 30-year period.
The findings partly reflected similar studies in recent years, including from the Manhattan Institute, whose October 2025 reporting said that the “average new immigrant reduces the federal budget deficit” but that this was not true across all immigration categories.
The Manhattan Institute has frequently called for immigration reform, arguing in its report that low-skilled immigration needed to be reduced while high-skilled pathways should be expanded, as these workers were able to contribute more. However, Congress has been slow to act on long-term immigration reform, making smaller changes to existing laws and programs that critics argue have made little impact.
A January 2026 study from the Brookings Institution warned that a drop-off in immigration could have negative impacts on U.S. income and the economy, with much of the labor market growth in recent years down to immigrants, rather than U.S.-born workers. Over two years, consumer spending could weaken by between $60 billion and $110 billion, the report said.
What People Are Saying
Jeremy Beck, co-president of immigration think tank NumbersUSA, told Newsweek: “Intentionally or not, current immigration policy privatizes profits and socializes costs. The economic rewards go to businesses. The economic burdens are borne by American workers and taxpayers. We can do better. An immigration policy that prioritizes per capita prosperity over GDP would set the numbers in the hundreds of thousands rather than millions, and the obvious place to start reductions is by requiring people working illegally in the United States to return home.
“When you add a lot of people through immigration, you create additional economic activity, which produces a surplus in total wealth—as much as $50 billion a year according to the National Academy of Sciences. Much of that surplus understandably accrues to the immigrants themselves. Although immigrants gain wealth, they do not pay enough taxes to cover their use of social services. The National Academy of Sciences ran eight different scenarios to study this and all eight scenarios resulted in an annual fiscal drain of between $43 billion and $299 billion. And that's not accounting for the surge in illegal immigration that occurred between 2021-2025**.**”
Steven Camarota, director of research at the Center for Immigration Studies, told Newsweek: "The key thing about CATO work is that they exclude all the costs the U.S.-born dependent child of immigrants create for the welfare system and education. They assume if an immigrant cannot provide for their own children and sign their child up for Medicaid and receive free school lunch, food stamps and WIC etc. for their child that has nothing to do with immigrants. This is how you can take a population that has relatively heavy welfare use and relatively lower tax payment and say they are a net fiscal benefit."
Daniel Di Martino, a Manhattan Institute fellow, in his October 2025 report: “Ultimately, while fiscal outcomes should not be the sole criterion for immigration policy, they are a crucial and quantifiable measure of long-term national interest. A well-designed policy mix can simultaneously strengthen the federal balance sheet, boost economic growth, and ease assimilation pressures—achieving a sustainable immigration system that aligns demographic, economic, and budgetary goals.”
Representative Randy Fine, a Florida Republican, in a January statement on legislation to further restrict immigrant benefits: "Americans are being robbed. Somalians, illegals, and even legal immigrants are getting free handouts at the expense of American taxpayers. That is insane, it is immoral, and it must stop. Hardworking Americans should not be paying for non-citizens' healthcare, free housing, food stamps, Medicaid, or anything else for that matter. Citizens come first. Period.”
What Happens Next
Republicans in Congress will likely continue to push for further restrictions on immigrant access to benefits, and for the deportation of millions of immigrants without legal status. Experts warn that restricting and reversing immigration will have a major, negative impact on the U.S. economy.
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