Why do some communities strongly resist the influx of immigrants, while others condone or even welcome their arrival? In this study, I shift focus to a crucial yet heretofore overlooked structural economic driver of resistance to immigration: economic inequality between natives. I construct a granular panel data set of local economic inequality in Germany. Drawing on tax registry data from more than 500 million individual-level tax returns filed between 1992 and 2017, I precisely estimate inequality at the municipal level. Using a difference in differences design, I compare the reaction of egalitarian and unequal communities to the sharp influx of refugees starting in 2015. I consider xenophobic backlash along four dimensions: i) right-wing voting, ii) hate crimes, iii) anti-immigration protests, and iv) petitions against immigration.