for different programs is that, because the relation of immigrant to native costs varies so much from program to program, it is dangerous to draw general conclusions from the examination of any particular program. General conclusions must instead be based on a full and comprehensive consideration of all government programs and all levels of government.

Tax Profiles

The real difference between immigrants and natives lies in taxes rather than in benefits, as shown in Figure 7.8, which displays total taxes paid by the different immigrant generations in 1994. These plots combine state and federal income taxes, Federal Insurance Contributions Act (FICA) taxes, property taxes, and sales taxes. In addition, federal business taxes and excise taxes are allocated to individuals in proportion to their reported dividend, interest, and net rental income (the CPS does not have data on assets). In contrast to total benefits, there are large differences in taxes paid, with immigrants paying the least at each age, the second generation paying the most, and others paying intermediate amounts. The main reason the second generation pays higher taxes than the third is that it tends to live in states with higher incomes, as does the first generation.

Figure 7.8

Estimated age profiles of taxes paid by immigrant generation. Note: Data are from the March Current Population Survey, 1994 and 1995. Data have been smoothed on a moving window of 1,000 observations using a local regression smoother.

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