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The audience react as Indian Prime Minister Narendra Modi speaks at a community reception with Indian Prime Minister Narendra Modi in San Jose, California
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Giving big.
THE UGLY TRUTH

H-1B workers pay billions in taxes to fund programmes that benefit American citizens

Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter

The Donald Trump administration has often blamed H-1B workers for stealing jobs from Americans. But this myopic view ignores how much these foreign workers contribute to the US economy.

As per a new study, an estimated three million H-1B visa holders contribute hundreds of billions to the US government programmes like social security and medicare—which they don’t even benefit from—and to local businesses and American companies.

The study, conducted by immigrant-focussed financial services company Stilt, analysed transaction data from 3,336 loan applications of H-1B visa holders between Jan. 1, 2019 and May 31, 2020.

“There’s a great deal of focus on what immigrants (including H-1B visa holders) supposedly take away from the US, but the undeniable truth is that they’re building this country,” wrote Frank Gogol, content manager at the California-based firm. “Whether it’s creating jobs and leading the charge in the development of new technologies that bolster the US economy, it’s H-1B visa holders doing the work.”

Paying dues

The total annual income tax contribution from all H-1B visa holders currently working in the US is upwards of $85 billion, according to Stilt.

The average salary of an H-1B visa holder in the US is $118,100, so with a base rate of 24%, he or she pays $28,344 in taxes each year, Gogol wrote.

A chunk of these taxes—7.65% of the annual income, or $27.1 billion per year—go towards benefits such as social security and medicare, which don’t cover H-1B holders.

Spending big

One of the major criticisms against immigrants, including H-1B visa holders, is that they remit large portions of their salaries to their home countries instead of spending it in the US.

Stilt’s data show that the H-1B visa-holders in the US spent no less than an average of $2,130.65 per month in the 17 months starting in January 2019, with the exception of May 2020 (likely due to a downturn in all spending in the US as a result of the Covid-19 crisis).

Spending by all H-1B workers in the US amounts to a total of more than $76 billion annually.

Besides spending on e-commerce platforms such as Amazon, H-1B workers also help local businesses, such as restaurants and supermarkets, thrive. The average total local spending per H-1B visa holder was $1,588 per month.

All H-1B workers together spend over $57 billion on local businesses each year.

Not only do H-1B workers buy American goods and services, but they also support ventures. The average investment of an H-1B visa-holder into businesses in the US is $4,025.09 annually, as per the study. While on an individual basis, that’s only 3.4% of one’s income, the overall contribution of all H-1B visa-holder is sizeable at over $12 billion.

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