Trump’s Cash-for-Citizenship Plan

About three weeks ago, I suggested a new Theorem of Government to guide immigration policy.

I was motivated by a combination of politics and economics, as summarized by these five points.

1. The public does not like mass immigration.
2. Mass immigration generates political support for “national conservatives“ (or Trumpies).
3. National conservatives are sympathetic to big government.
4. I prefer the “freedom conservatives” (or Reaganites) who want a smaller burden of government.
5. Freedom conservatives probably won’t win elections (or GOP primaries) unless they become hawkish on immigration.

I’m revisiting this issue today because President Trump unveiled a new proposal that is completely consistent with my 21st Theorem.

Simply stated, he wants make it easier for rich foreigners to become Americans.

Here are some passages from the Washington Post‘s report on the story.

President Donald Trump said Tuesday that he will replace a controversial visa program for foreign investors with a new initiative to sell $5 million “gold cards” to wealthy individuals looking for a path to U.S. citizenship. …Trump said in the Oval Office… “they’ll be spending a lot of money and paying a lot of taxes and employing a lot of people.” …Trump and Commerce Secretary Howard Lutnick said the new initiative will begin in two weeks and…those who buy the gold cards will be given green-card privileges and “a route to citizenship.” Immigration experts expressed skepticism that the Trump administration could enact the change without Congress.

This would be a good plan for the United States.

But it’s not a perfect plan. It would be better to create expedited citizenship for rich people who put their money into America’s private sector.

Indeed, that was the premise of the EB-5 program, which became mysteriously controversial.

But the perfect should not be the enemy of the good, so Trump’s new proposal should be lauded for being a step in the right direction.

I’ll make one final point. The Post article also noted that the Europeans don’t like this approach.

The European Commission in 2022 called for ending “golden passports,” which allowed wealthy investors to purchase citizenship in European Union countries. …Didier Reynders, the European justice commissioner at the time, said golden passports open “the door to…tax avoidance.”

Well, if the bureaucrats in Brussels (as well as the OECD bureaucrats in Paris) don’t like something, that often is evidence that it is a good thing.

As far as I’m concerned, it’s a win-win situation if wealthy people from high-tax nations can lower their tax burdens by escaping to the United States.

American gets people who increase per-capita GDP and the French government is punished for being too greedy.

Though if Trump really wants to attract rich people to America, especially those who are very wealthy, he needs to get rid of “worldwide taxation.” Until and unless that happens, the super-rich will prefer places such as Switzerland and Singapore.