President Trump recently proposed a “gold card” aimed at high net worth immigrants, which would sell for $5 million. Tyler Cowen has an article in Bloomberg that discusses the pros and cons of this proposal:
It’s a good idea, both from the standpoint of government revenue and for wealthy prospective immigrants. But the US would have to be careful not to foreclose other, more affordable ways for people to come and work and live in the country.
I also see advantages and risks in this proposal. If I slightly disagree with Tyler, it’s because he may have overestimated the number of cards that would be sold:
Trump estimates that the US could sell one million gold cards, which would give holders quick residency rights and a path to citizenship, family members included. That would bring in $5 trillion. He also suggests that many companies would buy them to bring in talented workers. Even if his estimates are overly optimistic, there is some real money on the table.
Of course “real money” is an ambiguous phrase, but another Bloomberg piece suggests that Trump’s estimate is wildly inflated:
Nuri Katz, founder of Canada-based immigration consultancy Apex Capital Partners, said investors taking advantage of the program would most likely need a net worth of roughly $50 million and estimated that “50 to 200” people would apply. He said he expects people from Asia, including China and the Middle East, as well as Russians and Canadians to be the first to look at these visas.
If I had to guess, it might be something closer to 800 applications per year. To see where I got that guesstimate, let’s return to Cowen’s article:
Under current law, there already is a path to residency and citizenship by investing in the US through the EB-5 program. After expenses are accounted for, and depending on details, the cost is about $1 million. That’s an 80% discount on a gold card, and meanwhile the government gets the benefit of new jobs added to the US economy. . . .
The best-case scenario is that the US offers a gold card and expands (or at least does not limit) cheaper ways of getting into the country. Replacing the $1 million investment with a $5 million flat fee, on its own, seems like an upgrade. A lot of people who can afford $1 million can also afford $5 million.
Is it true that “A lot of people who can afford $1 million can also afford $5 million”? Nuri Katz seems to think the program would appeal to people who had $50 million in assets, ten times the price of the visa. One source suggests that there are about 12 times as many American households with $10 million in wealth as there are households with $50 million in wealth. If that ratio also applies to wealthy foreigners, then there may well be 12 times as many people who can afford the EB-5 visa as there are people who can afford a gold card. Because about 10,000 EB-5 visas are granted each year, gold card sales might be expected to be closer to 800.
Two other considerations could impact the estimate of 800 gold cards. First, the EB-5 visa is much more popular than the 10,000/year figure suggests, as there is a big backlog of applications. That suggests that the 800 estimate may be too low. On the other hand, the EB-5 visa is intended for those making a $1 million investment, whereas the gold card would require a fee to be paid directly to the US government. That distinction makes the EB-5 seem much more attractive. Of course these are very rough estimates, but the 1 million gold card figure cited by Trump seems extremely optimistic.
Elon Musk came to the US as a student, and presumably would not have been able to afford a $5 million gold card. His example suggests that Trump may wish to revisit his campaign proposal to award green cards to foreigners who graduate from Americans colleges and universities. The government would presumably need to put in safeguards to avoid the policy being abused by “diploma mills,” but it seems like a policy that would be especially effective at attracting many talented young people.
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