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02/03/2008

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David Anderson

Fees and market mechanisms are proposed to create priorities for immigrants. However, the immigrants we value may not be the most financially well off. A liquid asset requirement does not necessarily correspond to industriousness, education, and willingness to take risks.


Also, immigration has many hurdles to overcome before financial success. Language, cultural customs, and education from recognized institutions for professional licensure are just some of the hurdles.


The bulk of the illegal immigrants are the result of the rural poor in this hemisphere moving to urban areas now that subsistance farming is no longer a viable social safety net. How do we resolve the illegal immigrant status of this group of immigrants?

RPFN

With goods we call this a tariff. It's preferable to hard quotas but it's hardly ideal.

J Monheim

(RPFN, please remind us of the ideal solution!)
While Becker's solution certainly sounds promising, there must be a parallel system for non-economic migrants, i.e. refugees.

raphfrk

Another option would be higher income taxes for immigrants. It would reduce their competitive advantage over locals and increase tax revenue. This could reduce the local resistance to their entry. It could be setup as a 50% increase in federal income tax.

This could be combined with an initial fee. For example, if the fee was $10,000, the person might have to pay $2,000 to register with the scheme before being allowed entry and then the extra tax they pay would go towards paying off the the remaining $8k. When they have cleared the $8k, they would get a Green Card.

A person earning $15,000 a year pays $1859 per year in federal income taxes. At 50%, the excess tax would result in extra tax of $929 and take 8.6 years to pay off the remaining $8000.

This seems reasonable as even a low waged immigrant can reasonably expect to pay off the fee and also the extra taxes aren't crippling.

If the fee was set much larger than that, a situation could arise where immigrants have no hope of clearing the debt and they end up paying the higher tax rates for their entire lives.

Another option is to have a set number of permits per year and let the market decide the price by auctioning them off.

Dave

"A person earning $15,000 a year pays $1859 per year in federal income taxes."

A person earning $15,000 a year probably pays negative income taxes (i.e., he gets more back from the EITC and other grants than he pays in taxes). The problem with the income tax scheme and Becker's proposal is that most illegal immigrants don't have the money, and earn so little that they pay less in taxes than they consume in government resources.

There already is a visa program similar to what Becker proposes for entrepreneurs though. The WSJ reported on it recently. A foreigner can get an expedited visa if he plans to invest $500k in a business in American that will hire x number of employees.

RPFN

Monheim, ideally we would have open immigration. Give out visas like candy but tie more government benefits (e.g., EITC, financial aid for college, Social Security, Medicare) to citizenship. In addition, instead of or in addition to a 5-year residency requirement for citizenship eligibility, there can be a other requirements, such as sufficient income tax payment, that demonstrates the unlikelihood of the applicant becoming a public charge in the future.

ad

The proposal I have made to sell the right to immigrate has been criticized as "repugnant". That is easy to fix. Simply relabel the price as an "immigration tax".

Remember, selling something as sacred as citizenship is exploitation, but taxes are the dues we pay for being a member of a civilized society.

Robert Hill

I would respectfully respond to Posner's (rhetorical?) question as to why we should care about those in line to immigrate legally, that by "rewarding" those who "cheat," we "signal" future decision makers that we are not to be trusted to play by our own rules. This could be avoided by offering those in line the same deal as we give to those who have bypassed the line (at a price reduced in proportion to how long they have already waited).

Of course this is all theoretical. Americans may not be fatalistic, but they have a terrible fear of ID cards. We will manage to get around this inconsistency, however, I predict: we will once again essentially pretend to take action, but in effect our actions will be cosmetic and we will continue "having our cake and eating it too" (i.e., pretending to abhore having an underclass, all the while reaping the very substantial benefits). Anyway, in the long run, as long as there are labor shortages, immigrants will come no matter what we do.

Ignacio

great idea

BillInOrlando

This was already proposed in the McCain-Kennedy Amnesty Bill. McCain says it is not amnesty because there is a fine but he fails to point out that the Bill reduces existing fines and allows for interest-free time payments of said fines. Anyone not convicted of a U.S. crime can buy U.S. citizenship for $40 per month.

The Bill was defeated but if McCain is elected he will sign it when it is re-introduced. By the way, the Bill also calls for the increase of taxes to benefit illegal aliens by more than $2 trillion.

Andrew

Another great idea from Judge P I subscribe to. If anyone knows anyone from Congress, please send them a link to this.

(Out of sheer curiosity, does anyone know who the hell thought this was "repugnant"?)

Andrew

Oops, I meant "Another great idea from Becker I subscribe to."

Nelson

This plan contains way too much common sense, it will never get past congress.

Bertil Hatt

Just to make it clear: “repugnance” is a new notion, introduced in Economics by Al Roth in the last issue of the American Economic Review, I believe. It designate a transaction that you do not want to be happening--it is different that to consider unacceptable to take part yourself.

E.g. when a Muslim refuses to eat pork, but couldn't care less that the “roumi” have all the sausage in the world, it is “forbidden”; when some Californian want to ban all horse meat, not just they own, it is “repugnant”.

The other classic cases are organ donation, child work, sex: all are fine, unless done under merchant perspectives. In that respect, “you cannot sell American freedom” or similar argument would label Becker's offer as “repugnant” in the economic sense.

I, for once, have to say that --although there are many aspects of illegal alien life that don't seem to be taken into account in such an offer (the role of 'coyotes', loan sharks, current employers)-- this approach sounds like a idea to investigate, as it should at least help to get out of the usual conundrums on this question. If USA try it, it will for once be ahead of Europe in legislative approach.

Maybe I like it because it basically is a tax, and I can see no market anywhere near it. Taking about no market: how much should that be? Not the amount, but the basis of the calculation?

Jerry

Ha! Very few illegal immigrants would pay it. They just don't have the cash, and the differential in benefits wouldn't be worthwhile.

With the current level of enforcement, an illegal immigrant has essentially the same rights and freedoms as a fully documented citizen.

None of these "clever ideas" will work because the resources to enforce the new "clever rules" are not forthcoming.

Tworzenie Stron

Another good idea. Keep good work and this blog :)

Interent Komputery

nice to read

Iain

I don't understand what would happen in the case of default on the loans used to finance citizenship? Would it be exactly similar to student loans--where because the underlying asset is not subject to repo it cannot be easily discharged in bankruptcy? Immigrants, though would not likely have the same incentive to maintain good credit history through not defaulting that current college graduates have. Most immigrants currently exist without access to credit markets, so the loss of that privilege because their credit scores were dinged by this default would not be as scary. I just don't see how this loan market would work in practice.

Nelson

Ha! Very few illegal immigrants would pay it. They just don't have the cash, and the differential in benefits wouldn't be worthwhile.This depends on the price of the tax and the benefits received. No risk of being deported or fired for being born in the wrong place, right to join a union, right to file a complaint against the employer for unsafe working conditions, children's education, lower mortgage rates, protection of the law instead of persecution by the law, etc... These are but a few good reasons a person would be willing to pay for legitimacy.

Plus it is a mistake to assume that because some persons don't have money in Mexico, that they can't earn money in the US. There are several examples of immigrants earning, saving and spending money once in the US economy. This should be obvious given that most come over to work for better pay to begin with. Think of the complaints anti-immigrant forces were giving when Bank of America started letting illegal aliens open checking and savings accounts... this wouldn't even be an issue if they were truly destitute.

This ability to earn and save, when combined with with credit markets, makes the problem of paying a fee go away. A person could pay a "guest worker rights loan" back over time (along with their normal taxes) as they participate in the economy.

Bob K.

There's nothing brilliant about this proposal.

There is already a program offering a green card in exchange for an "investment".

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=4ff96138f898d010VgnVCM10000048f3d6a1RCRD

Nelson

Bob K, could you fix your link, the site you goes to is the immigration site, but it's not obvious which link from there describes an investment green card.

Nelson

Found it:

Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving an CIS-designated “Regional Center.”...

A limit of 10,000 is really really small. And the cost of $1,000,000 is really really large. This does nothing to better our current immigration situation.

Fresh Air

The biggest risk with this is that some sugar daddy, along the lines of George Soros, decides paying for 2 million illegal aliens to become citizens is a great way to ensure the future dominance of the Democrat party. You would have to attach a lottery system and/or quotas to prevent perverse sponsorship.

DanC

You could have potential employers front the money to immigrants, just as we did once upon a time in this country.

We could even have employers bid for the right to hire immigrants. Farmers might bid a low amount for an unskilled worker while a tech company may bid a high price for an Indian tech worker. This auction could take many forms, an annual draft like sports teams, or a silent bid system.

Once you accept the idea of paying for the right to immigrate, the rest is just mechanics.

Could I sell my citizenship to an immigrant and then retire to a foreign country?

neilehat

Sure, why not. Evidently immigration to the U.S. appears to be a valuable commodity. With the deficits, both budgetary and trade wise, the Nation could certainly do with the extra income. But I have just one revision too make. Instead of setting a price, the value should be allowed to float on the open market like any other commodity. As for purchasers, only Nations should be allowed to bid. By doing this we may also be able to curb the problems of "ethnic cleansing" and genocide. By implementing this revision, we might be able to kill two birds with one stone.

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