OUR RAPIDLY changing economy requires a more-dynamic immigration system that allows in the types of economic immigrants who are barred under the current system. Congress should create an additional visa category that would allow foreigners to work and live legally in the U.S. after paying a tariff. Immigrants who pay the immigration tariff would receive a "gold card" that does not directly lead to citizenship, but allows the immigrant to live and work legally in this country.
Congress could adjust the tariff rate on the basis of the immigrant's estimated fiscal impact, as determined by the individual's level of education or other relevant demographic factors. An immigration tariff would create a dynamic, market-based, merit-based, relatively more-economically efficient, and self-regulating system that would serve the ever-changing U.S. economy.
Under the current system, foreign-born people initially can work and reside legally in the U.S. as immigrants with lawful permanent residency on a green card or as nonimmigrants on temporary visas. Congress sets the number of green cards via a numerical cap, last adjusted in 1990, and apportions them by type: family, employment, and diversity.
Of the 1,183,505 green cards issued in 2016, 81% were for family members of U.S. citizens or green card holders. Five percent were in the worker or investor category. Most family-sponsored and diversity immigrants do work and they increasingly are skilled, but their skills, education, and the demands of the U.S. labor market are not legal considerations in granting them green cards.
Temporary nonimmigrant work visas--such as the H-1B for specialty skilled workers, H-2B for seasonal nonagricultural workers, and H-2A for seasonal agricultural workers--either are numerically capped or so highly regulated and expensive that they have low de facto caps. No functional visa exists for entrepreneurs.
The U.S.'s immigration system is more restrictive than those of most other developed nations. Of the 35 member countries of the Organisation for Economic Co-operation and Development that reported immigration data for 2015, the U.S. had the 26th most-open immigration policy measured by the number of new immigrants as a percentage of the population. Moreover, the bulk of immigrants in those nations are skilled workers, entrepreneurs, or meet other government-determined economic qualifications.
The U.S. immigration system stunts economic growth and reduces tax revenues. A recent proposal to address the paucity of economic immigrants is to create a merit-based immigration policy with the RAISE [Reforming American Immigration for Strong Employment] Act, a bill introduced in 2017 by Sens. Tom Cotton (R.-Ark.) and David Perdue (R.-Ga.). Cotton touted his bill as a merit-based points system under which immigrants get green cards if they earn a certain number of points based on education, language ability, job experience, and other qualifications.
Contrary to Sen. Cotton's claims, the RAISE Act actually would reduce the number of skilled immigrants because it cuts the number of family-sponsored immigrants, diversity visa recipients, and refugees while maintaining the same number of employment-based green cards.
Had the RAISE Act been law in 2000, it would have kept out about one-quarter of American Nobel Prize winners. A fundamental flaw with a points-based immigration system is that it would rely on Congress to decide what types of skills, education levels, or other qualifications should be awarded points.
Nobel Prize-winning economist Gary Becker, among others, has proposed another way to produce a more merit- and market-based immigration system that would avoid the problem of government selection of winners and losers. Becker contends that selling the right to immigrate would boost economic efficiency, raise tax revenue, and improve the average quality of immigrants to the U.S. Such a sale could take the form of an auction if the number of admissions is capped artificially or of a tariff for which the government sets a price and allows the quantity to adjust according to market conditions. Indeed, fees and tariffs already play an important role in many immigration systems around the world.
The U.S., too, has charged fees well in excess of administrative costs or has required levels of investment in exchange for a visa. In 1882, the government imposed a head tax of 50 cents per immigrant that it raised to four dollars in 1907, and then to eight dollars in 1917. In 1959, the U.S. government levied a $12 tariff on farmers for every bracero guest worker they hired under that short-lived visa program. In 2016, the U.S. allocated 3,422 EB-5 green cards to applicants who invested $500,000 to $1,000,000 under various conditions.
The government charges $4,000 for each H-1B petition submitted by H-1B dependent employers, as well as a whole host of other protectionist fees. Taking the current H-1B fee policy a step further, some U.S. firms, such as Microsoft, even have proposed that they should be able to pay $10,000-$15,000 to sponsor each worker on an H-1B visa or green card.
The current immigration system extracts resources from immigrants and their sponsors in ways that are more destructive than a tariff. Green card applicants and their sponsors can pay up to $35,000 in lawyer and government fees to navigate the legal minefield for green cards or H-1B visas.
Immigrants also pay by waiting in decades-long queues. If they are in visa limbo, they have more difficulty buying a house, enrolling their children in school, and making investments or starting businesses. Both the uncertainty of the numerical cap-and-regulation-dominated immigration system and the dead-weight loss from preventing most legal immigration that...