- President Trump’s immigration policies could reduce tax revenue by $479 billion over the next ten years.
- The Yale Budget Lab warns that IRS data sharing risks will discourage undocumented workers from filing taxes.
- Annual contributions of $96.7 billion to Social Security and Medicare are now at significant fiscal risk.
(U.S.) — President Donald Trump’s immigration crackdown could reduce U.S. tax revenue by as much as $479 billion over 10 years, according to a Yale Budget Lab estimate reported in April 2025.
The estimate put the 10-year revenue loss in a range of $147 billion to $479 billion. It also projected an expected loss of $12 billion for the remainder of fiscal year 2025.
Yale Budget Lab tied the estimate to undocumented workers filing fewer taxes after the start of IRS sharing data with U.S. immigration authorities. The report said the effect turns on whether people keep filing and how employers respond.
That report described the outlook as having “considerable uncertainty,” a reflection of how much the final number depends on behavior rather than a fixed tax change. Undocumented immigrants may react one way; employers may react another.
The estimate places tax compliance at the center of a debate that often focuses on arrests, removals and border controls. In this case, the revenue effect stems from a narrower mechanism: fewer tax filings after IRS sharing data with immigration authorities.
That matters across more than one layer of government. The source figures on undocumented immigrants’ tax payments show money flowing not only to Washington, but also to states, local governments and federal trust funds.
Annual tax contributions by undocumented immigrants were estimated at $96.7 billion in 2022. Of that total, $51.8 billion went to the federal government and $37.3 billion went to state and local governments.
The same estimate assigned $25.7 billion to Social Security, $6.4 billion to Medicare and $1.8 billion to unemployment insurance. Those figures show how deeply tax payments by undocumented workers reach into public finance, even before any new enforcement effect is counted.
Trump’s immigration crackdown has been discussed mostly in terms of detention, deportation and workplace enforcement. The Yale Budget Lab estimate added another dimension by attaching a dollar figure to lost revenue tied to lower filing rates.
The numbers in the estimate span a wide band. A lower-end loss of $147 billion over 10 years would still represent a large reduction in receipts, while the upper-end figure of $479 billion points to a far larger change if compliance drops more sharply.
IRS sharing data sits at the heart of that range. If undocumented workers decide that filing taxes exposes them to immigration risk, the government can lose revenue that had been collected even from people without legal status.
Employers also shape the outcome. Yale Budget Lab said the estimate depends heavily on how undocumented immigrants and their employers respond to the policy, meaning enforcement does not operate in isolation from payroll practices and reporting behavior.
No breakdown accompanied the estimate beyond the range, the $12 billion projected loss for the rest of fiscal year 2025, and the link to reduced tax filing after IRS sharing data began. Even so, the spread between $147 billion and $479 billion shows how much uncertainty remains around compliance effects.
That uncertainty cuts in both directions. A forecast built around taxpayer behavior can move quickly if workers keep filing despite enforcement fears, or if they stop participating in the tax system at higher rates than expected.
Federal receipts would absorb part of any decline, based on the $51.8 billion annual federal share in the 2022 contribution estimate. States and local governments would also face pressure, given the separate $37.3 billion figure attached to those governments.
Social Security and Medicare appear in the numbers as well. The estimated $25.7 billion for Social Security and $6.4 billion for Medicare indicate that changes in filing and payroll reporting can ripple beyond general tax collections.
The unemployment insurance figure, $1.8 billion, adds another piece to that picture. Even smaller categories become part of the fiscal effect when a policy changes how many people report income and pay into the system.
The debate over Trump’s immigration crackdown often treats enforcement and revenue as separate questions. The Yale Budget Lab estimate ties them together through tax behavior, and the role of IRS sharing data gives that link a specific policy channel rather than an abstract economic assumption.
No detailed comparison with other 2026 immigration-economy forecasts appeared alongside the estimate. What did appear was the broad warning embedded in Yale Budget Lab’s phrase “considerable uncertainty,” a caution that the final fiscal effect will depend on real-world compliance decisions now unfolding.
Set against the estimate that undocumented immigrants paid $96.7 billion in 2022, the projected revenue losses show how enforcement policy can affect public finance far from the border. The question raised by IRS sharing data is not only who leaves or who stays, but also who stops filing taxes.
