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.
READER COMMENTS
steve
Mar 2 2025 at 10:59am
My understanding is that a number of other countries have done this and then canceled the program. They found that it brought in a lot of criminals and a lot of “political refugees”, the kind that liberated a lot of money from their govt before leaving. If we could screen out those for this kind of program then it seems pretty reasonable. However, bringing in the Tates doesnt give me much confidence that would happen.
Steve
Craig
Mar 2 2025 at 11:03am
US already does this. We think of tax havens and instantly think of places like the Caymans but turns out the US is, itself, a tax haven, from the pov of many foreigners.
Craig
Mar 2 2025 at 11:01am
If one has $50mn in assets and is not a US resident, the inference is that person surely must have significant income generating assets NOT currently subject to the US long arm. Indeed there are serious advantages to NOT being a resident including fact nonresident aliens are not subject to capital gains. See also: EB5 — so from US pov not a bad idea, just don’t see how its a good idea from the immigrant’s pov.
Thomas L Hutcheson
Mar 2 2025 at 1:44pm
Even better woud be to drop the price to a dollar and then select a few million per year on some combination of job contract, academic promise, demonstrated skill (for example in current job), understand of the Constitution, English proficiency, political persecution by tyrannical government, etc.
Jose Pablo
Mar 2 2025 at 6:05pm
Why just one dollar? Why is the government making the selection? When a government agency is responsible for making the selection, you can expect a significant number of both false positives and false negatives, along with an astonishingly long backlog of applications within just a few months.
Instead, make the initial cost match the average expense of deporting an immigrant.
Rather than making an ex-ante selection, charge a fee of around $5,000 to $14,000 per year (this amount corresponds to the federal taxes paid annually by a worker in the 33rd or 50th percentile of U.S. salaries—choose whichever figure you prefer).
If the immigrant is paying federal taxes, deduct the amount of taxes paid from the yearly $5,000 to $14,000 amount
If the immigrant fails to make this contribution in one year deport him or her.
If the immigrant is able to make this contribution, it’s reasonable to conclude they have some form of “job contract, academic promise, or demonstrated skill” equivalent to what the 33rd or 50th percentile of American workers possess.
Craig
Mar 2 2025 at 6:40pm
Just as an aside here the government could also charge the fee associated with removal and then if the immigrant produces sufficient taxation offer a one time credit equal to that fee.
Scott Sumner
Mar 3 2025 at 10:19am
If you think immigrants are a negative externality (not my view) you could price it at the estimated externality. If you want to select for good quality immigrants, I would think a figure far lower than $5 million would work. Even at $500,000 you are not going to get poor people coming here to go on welfare.
Matthias
Mar 3 2025 at 10:51am
And you could just exclude migrants on that program from access to welfare.
robc
Mar 3 2025 at 12:54pm
Wouldnt a Vickery auction be better than picking a price?
Accept the bids then revenue maximize for the price/amount of visas.
Jose Pablo
Mar 3 2025 at 12:58pm
Perhaps it’s best to avoid the highly controversial debate over immigration externalities, contributions, and related issues altogether.
Instead, the focus could simply be on a clear business goal: maximizing revenue from selling the privilege of American residency. This is a legitimate approach, as American residency is indeed a privilege for many people around the world.
Designing the pricing strategy would then be a fascinating business challenge, with the ultimate objective being to capture the highest possible surplus of this service.
Segmentation should be a key consideration. There may even be room for a ‘premium service’ tailored to those willing to pay $5 million, but a more sophisticated pricing strategy than the “5 million fit it all” would likely be better.
Politically, it would be highly beneficial if the revenue generated—after covering the cost of administering the program—were distributed to American lawful residents (or Americans by birthright) in the form of regular payments, perhaps annually or semi-annually.
Approaching this from a business perspective, rather than a purely political one, could create a win-win scenario for both Americans and prospective immigrants.
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