Immigration reform
A demonstrator holds a sign while taking part in a rally in front of the Department of Homeland Security in Washington January 26, 2010.Reuters

Undocumented immigrants would contribute billions of dollars in tax contributions if they were granted a pathway to legal permanent residence, a new report by the Institute on Taxation and Economic Policy revealed.

"The reality is the 11.4m undocumented immigrants living in the United States pay billions of dollars in local, state and federal taxes, and their tax contributions would increase under immigration policy reform," the 15 April report claimed. According to the Washington DC think-tank, undocumented immigrants contributed an estimated $11.84b (£7.92b) in state and local taxes in 2012.

The study goes on to claim that if the 11.4 million undocumented immigrants were granted lawful permanent residence, their state and local tax contributions would increase an estimated $2.2b (£1.47b) a year.

Undocumented immigrants's nationwide average effective state and local tax rate, which stood at an estimated 8% in 2012, would increase to 8.7%. This would "align their tax contributions with economically similar documented taxpayers," the report stated.

"The numbers alone make a compelling case for reform," said Matthew Gardner, executive director of ITEP. "This analysis shows that undocumented immigrants already are paying billions in taxes to state and local governments, and if they are allowed to work in the country legally, their state and local tax contributions would considerably increase."

President Barack Obama's executive action on immigration reform has been met with tough Republican opposition. The order would expand programs that allow undocumented immigrants who meet certain entry and age requirements to receive a two-year renewable work visa and exemption from deportation.

However, the report noted that the president's executive order would help increase state and local tax contributions by an estimated $845m (£566m) a year once in place.

The executive action was put on hold by a Texas federal judge after 26 states sued the Obama Administration, claiming the it was illegal. US District Judge Andrew Hanen refused to lift his 16 February decision that placed a temporary ban on the order on 7 April.