Give me your energetic, your rich,
Your striding elite yearning to oppress,
The vaunted gild of your desolate shore.
Send these, the landowners, first-class-turbulence-tost to me,
I lift my lamp beside the door for those with gold!
America is broke. If you want to tax the rich you need to let them into the country. And people buying a house aren't that rich anyway. Besides, this is very similar to the immigration policy of Canada or Singapore, which also give points if you buy property and start a business in the country. Their economies are vastly outperforming ours and it might be worth emulating them.
We were taxing the rich progressively for decades and doing great as a country. The past decade has been great for the rich, but horrible for the country. The number one factor preventing investment today is not taxes, but lack of confidence brought about by a crippled economy brought about by haphazardly lowered taxes.
How Congress managed to convince us this is a moral issue instead of one of straightforward math I'll never understand.
I think your analysis is half right: it explains why the rich are doing better, but not why the poor are doing worse. The latter is occurring because the shift of manufacturing to lower-cost countries has increasingly eliminated the possibility of middle class jobs for those without a college degree. Manufacturing jobs have been replaced with low-value-add service jobs, which naturally result in lower pay.
Even if we were to ratchet taxes on the wealthy back up, this wouldn't do anything to bring high-value-add manufacturing jobs back.
Although Singapore is outperforming our economy (on a per-capita basis), Canada is not. Why do you believe emulating them will get us Singapore-like benefits rather than Canada-like harms?
1. The Canadian economy is largely based on exporting goods to the US or exporting natural resources world-wide.
2. When the Canadian dollar reaches par with the US dollar, the benefits of US companies doing things across the bordering Canada rapidly evaporates. This means that economies like Ontario start doing poorly, while economies like Alberta and British Columbia that have natural resources to export start doing better (well, at least when coupled with an increase in oil prices.. because the tar sands become viable).
3. A lot of money comes into the Canadian economy through the entertainment industry. There are huge tax breaks in Ontario (specifically Toronto) and BC (specifically Vancouver) for doing things there, in addition to the exchange rate (when the US dollar is riding higher).
yummy: good question, and let me preface by saying I'm generally sympathetic to your worldview.
I think the answer is that this policy is pretty much directly guaranteed to increase the human capital and GDP-per-capita of the receiving country. Canada does plenty of other stuff badly, but if you've seen the latest Heritage ranking they actually exceed the US in economic freedom for the first time ever. With the exception of an enlightened, merit-based immigration policy Canada isn't doing many things right...but it is doing far less that is grievously wrong than the US.
I'd take even odds that once the pending true economic collapse happens (including devaluation of the dollar, tuition bubble pop, Euro breakup, et alia), that Canada will have a higher GDP-per-capita than the US within 5 years and certainly within 10. But this takes us far afield.
Even with the current slowdown, U.S. per capita GDP is much higher than Canada's. Singapore, as an island city-state, isn't really comparable to the U.S. It is more like Manhattan, and the government in Singapore can implement fairly heavy-handed policies that are not feasible on a continental US-scale.
Well, not the ones planning to go home. But perhaps a more welcoming route to becoming a citizen would help keep some of the ones leaving upon completing their degree.
> Seriously though, limiting it to STEM majors would goose academia in the right direction.
What is this supposed to mean?!
If you don't know, humanities programs are being badly squeezed already. Some programs are being cut entirely. I have a friend who is earning her Ph.D. in comp lit, and she (with all of her colleagues) are seriously scared that her field will no longer exist in 20 years.
And all this, despite the fact that undergraduate courses in the humanities are, according to my friend, as popular as ever.
I don't dismiss the humanities, but I do think that doing a PhD in 'em is very unlikely to be a good career move, and that government funding of humanities PhDs is very unlikely to be a good use of money, nor of human talent.
I'll agree that a PhD in the humanities is unlikely to be a good career move - but that is unrelated to whether or not it is in the public interest to fund them.
A career in fundamental scientific research is also a poor career move - my brother is in it himself. It's grossly underpaid, funding is hard fought and won, and job security isn't great either.
But it would be hard to argue against funding it publicly.
By so easily dismissing the worthwhileness of its pursuit, and by claiming that it is unworthy of governmental funding, you are dismissing the humanities.
But again, unsurprising given the company we're in. To a large contingent of us tech nerds, the humanities would always be a "if we have some spare time and money" subject, never given any importance until all technical subjects (or in this case, funding need) have been exhausted.
The odd thing is, I know a lot of people in other technical fields - physics and chemistry, for example, and yet none of them exhibit the same tendencies. It seems that dismissiveness for the arts is somewhat unique to engineers and CS.
It's a symptom of mental narrowness, and working with computers a lot does, in my experience, narrow the mind. It has a kind of digitizing effect on one's brain, causing it to see everything in discrete terms, which is to say binary terms, which may explain why tech nerds tend to be so rigid in their judgments. Anything that "does not compute" gets rejected. The mind becomes increasingly oriented to things that work the way computers work. Arts and humanities are far removed from that. Moreover, our technocratic age no longer assigns them any elevated status by default, so you have to seek them out, and few care to do so.
Perhaps physicists and chemists are less vulnerable to this effect because their work is concerned with nature. There has long been an alliance between nature and art in the human sphere.
> I do think that doing a PhD in 'em is very unlikely to be a good career move
Outstanding hackers have the luxury that what they love overlaps with what makes good money.
If you love literature, and know that you are taking on a career where, if you are very lucky, you will make $55k in an isolated town, I see nothing foolish about starting a Ph.D. in the subject.
Those jobs that only require you to wear a suit don't care what the degree is in.
Now if your future job only depends on your grade - not the subject which would you choose? Studying maths/physics/etc for 4years or doing psychology/media studies/american studies.
I don't know anybody that took nothing other than math classes for four years of undergrad... and I majored in math, and subsequently went to grad school in it.
This is the type of unserious, policy-by-press release we've come to expect from the micromanagers in the U.S. Congress.
First of all, housing is still overpriced, in terms of historic trends, in many markets.
Second, this is yet another program for ICE, which cannot manage its current immigration visa portfolio. This idea seems particularly open to abuse, since the home could be bought with borrowed money. (Sure it has to be "cash" investment but there's an asset here, you could easily cash out or have straw buyers.)
I wish these guys would come up with better solutions to the banking crisis (yes, it isn't over) than selling U.S. visas.
We already sell/monetize US visas. You have to invest a few hundred thousand in a US-based business and you get a Visa. I believe the amount is 500,000.
I'll go out on a limb here and say I like the basic idea. One major detail I would change is to make it a $100,000 or $50,000 minimum instead of $500,000. There are many parts of the country where it's hard to even find a house that's as expensive as $250,000. I'd like something like this to be open to all parts of the country and I'd like it to be open to middle class as well, not just wealthy people.
Why do I like it?
* Fill vacant homes (as opposed to urban blight)
* There are many indirect economic benefits like money spent fixing homes, all the day to day purchasing that will be done by the new residents, etc.
* In some cases, individuals will be able to rejoin relatives more easily.
The urban blight thing is the one I care about most. I live in the East Bay of California and have seen certain neighborhoods totally fall apart as dozens of vacant homes attracted vandalism, drugs, and other forms of crime and caused remaining residents hardship.
Well, the places where it's super hard to find a house at 500k, and somewhat easy at 100k, are the border states... New Mexico, Arizona, Texas (and Nevada). In these places, the 500k house is going to be the cream of the crop... the top 1%. Southern California is a different issue, but this isn't going to help the places where the housing market really took a shit, like Nevada and Arizona, because the market there is saturated with foreclosures of homes that might have originally sold for 500k but are probably worth half that much in the current market. The poisonous idea is that these homes were actually worth that much money, but they never were. The artificial demand of the sub-prime mortgage crisis pushed prices up where they should never had been. The 500k limit would try to, again, artificially inflate the worth of the house by stimulated demand in the highest priced homes, homes which should probably sell closer to 350, because the 150k premium might be worth it for some families to get a visa. The second problem with this thinking is that anyone who qualifies for a 500k house would likely be rich enough to get a visa in the US anyways as an investor.
A lower limit of 150k would be reasonable for boosting the middle class, and actually helping the housing market, but that's obviously not the goal.
You're assuming that the people will live in the homes that they buy. They could just as easily spend $50,000 on a shack in Detroit, let it continue to decay, and just live in an apartment in Palo Alto.
Of course, I guess that loophole could be closed in the legislation, but every patch I can think of for closing it has its own loopholes.
If I were the author of such legislation I would do everything I could to require that the person actually live in the house. Possibly even including (as a condition of the program) unscheduled visits to the house to see if they're really living there. But it could be that the authors' intent is different than mine. I'd like to slow down (or better yet reverse) urban blight, first and foremost.
Given the 500k/250k amount, one might suspect that propping up home prices in the mid to upper part of the market is the intent.
When an employee interviews with a company, the company should decide if the employee gets a job, not a visa.
When a PhD candidate defends a dissertation, the university should decide if the student gets a degree, not a visa.
When an entrepreneur applies for venture capital, the investor should decide if the entrepreneur gets money, not a visa.
And yes, when a buyer makes an offer on a house, the seller should decide whether the buyer will get the house, not a visa
None of these people should control whether a person gets to reside in the united states, and giving them this power is an invitation to government sponsored abuse.
This is a horrible idea, the problem is not that houses are too cheap it's that they're too expensive.
A better idea would be to relax visa standards for starting a business that hires x number of americans. Those employees would have a far bigger impact on the economy as a whole as the majority of their income would be pumped right back in for basic necessities.
Once they start a business here, guess what? They'll need somewhere to live and since they're rich they can still buy that $500k+ house.
Naah. Giving sweet-heart deals to people with a lot of money isn't out-of-the-box thinking - it's older than the hills. Out-of-box thinking would include enforcing consumer protection laws, strong oversight of large businesses, and progressive taxes. That sort of thinking hasn't been so common over the last few decades.
I think you've been caught up by the current mass hysteria, and forgotten to look for the reality:
enforcing consumer protection laws
See FTC's web site for news [1] like yesterday's "FTC Stops Nationwide Federal Jobs Scam".
strong oversight of large businesses
How about the DOJ suing to stop AT&T from acquiring T-Mobile? How about the absurd suit against Boeing for wanting to build a factory in a state where they don't have to worry about unions?
progressive taxes
The tax rates vary from 10% up to 35%, as you go up the income scale [2]. So, there are your progressive taxes.
The tax rates vary from 10% up to 35%, as you go up the income scale [2]. So, there are your progressive taxes.
Income taxes vary from 10-35%. Payroll taxes vary from ~14% down to infinitesimal as you go up the income scale, they are not progressive, and for the people at the bottom end of that 'progressive' scale, they tend to cost more than income taxes.
It's frustrating that I even have to make this point. Everybody knows about this, and yet when these discussions happen, it's like payroll taxes don't exist, or don't count, or somehow or another are not part of the debate. For that matter, neither are capital gains.
Oh, so some having _some_ consumer protection means there's strong consumer protection?
Please explain why the financial industry is so strongly against the Consumer Financial Protection Bureau; given that it will enforce laws that already exist. Why do credit card companies operate from the states with the weakest usury laws? Yes, the Supreme Court says it's legal, but why is there no federal cap on usury?
The only private recourse consumers have against bad business practices is a civil lawsuit, with the threat of high punitive damages. "Tort reform" wants to cap those damages, but promoters never suggest any alternative compensatory consumer protection. Why should I not interpret this as a reducing consumer protection?
Speaking of unions: Unions are a way for employees to protect themselves against bad business practices in the work place. (Whistle-blowing protection laws are another.) Many politicians want to break the unions, but offer no alternatives for employees facing those bad practices. Why should I not see this as politicians being aligned with business against employees?
How is it that the recent GAO Audit on "Major Conflicts of Interest at the Federal Reserve" found so many apparent conflicts of interest, and why weren't there policies in place to prevent that from happening?
Banking oversight over the last few decades (perhaps since the S&L crisis of the 1980s, but definitely in the last 10 years) has clearly not been enough to catch the numerous incidents of wide-scale fraud. These were already illegal, but where was the oversight, where are the investigations, and who is going to jail because of it?
It's a VISA - not Permanent Residence. When people invest in a residence for a VISA, they generally do so to settle down. So I am not sure how safe the potential home buyers are going to feel investing $500K in a house with the risk that their VISA renewal or entry to the US can be denied 3 years down the road.
Current climate is just not very conducive to hope that something like this will fly.
They don't even have to change anything - a VISA isn't a guarranteed right of entry.
You just need minimum wage guy at the airport desk to not like your face and you don't get in - no matter how many VISAs you have in your passport.
You can of course try and correct the problem from the other country after you have been denied entry - if you can get an airline to carry you.
I've never heard of anyone being denied entry, in practice, because the minimum-wage guy (actually immigration officers earn a median salary of $46,0000) at the airport doesn't like their face.
It's true that they legally can deny entry to someone with a valid visa, but in practice it has to escalate a few levels up the chain of command before they can do that. A low-level flunky trying to deny someone entry for specious reasons would get into trouble.
There are several programs that let you 'buy' a Visa and adding another one for the low low price of '$500,000 to buy a home in the U.S.' is not going to do much for immigration or home prices.
The $500,000 floor seems to be a benefit for people who have $500,000 houses to sell. Doesn't do much for Joe Sixpack while he's deciding whether to stick or walk away.
"'Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out,' the paper added."
We have to stop spending so much time/energy/money on trying to prop up housing prices. The valuations were clearly in a bubble. Now that the prices are more grounded in reality how about letting supply and demand dictate the prices?
$500K minimum? Anything to breathe life into the higher segment of the US real estate market ;)
Kidding aside, are they also going to retro-actively award visas to all those that already own their own homes and do not currently have their paperwork in order? That would be a very quick way to solve another issue that was on the front page earlier today.
“Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out,” the paper added.
Do they realize that there is a sizable number of US citizens living in the country that would like to buy a home and can afford one but due to the still artificially inflated prices in some areas of the country that can be attributed to low rates and the backlog of REO homes are choosing not to buy yet?
Instead, they should automatically offer work visas to college graduates. It is such a pain to have to get a work visa after you graduate if you were on an F1 before then. And most people that come all the way to the US to go to college are top notch professionals by the time they graduate.
I was on F1. I think offering work visa to all graduates could not be justified for the US economy. This would just increase the number of applicants for all the jobs. Even as of now, there's more supply than demand for jobs. Although, you're right it would make life so much easier for the international students.
They could offer fast green card processing to those already working (H1B) in this country who buy a house worth $150k+.
Thanks for the reply. Just to clarify, I am not an international student, and never was, but I had a number of friends in college that I think would literally be an asset to this country that went back to their respective countries of origin. Now, they had reasons other than the visa issues, but I do wonder how it would have turned out if they were offered the option to stay.
Yes, this flood the job market with more non-Americans who are competing for the same jobs. However, we are currently giving out green cards on the basis of a lottery and not really doing anything to prefer any category of job over another when making immigration decisions. Using a proven population to diversify America would be much better than blindly giving out green cards in a lottery. Another strategy would be to not just automatically hand everyone an H1B, but instead simply make the process much easier. Or prefer some industries over others. Or institute a quota and a lottery for just the pool of interested college grads. Possibilities are endless.
For what it's worth, I did upvote you, but I think you are trivializing it a bit. My point is that there are alternatives, and I happen to think that my idea is pretty good; or at least good enough to share. At first your response did look like an attempt to shoot it down, but upon closer inspection I think you are just expressing frustration with the current system, if I am reading your comment correctly.
I am not sure why many people are upset that this will attract the rich foreigners. Whats wrong with rich people moving in?. Think how much new tax revenue the country will gain if 10000 millionaires move every year
Very little - millionaires tend not to pay much tax.
Especially foreign ones whose income is difficult to trace.
What happened in Vancouver when Canada did the same thing is that people bought the houses as an insurance so they had an escape route if Honk Kong went bad.
Most of the houses either sat empty, were rented out, or the kid was dumped there to go to college.
It did a lot for the local housing market - not clear it did quite so much for local entrepreneurial growth.
That's true in partial. Vancouver has some interesting experiences with foreign capital investing in the housing market. It makes for a very expensive city. If the aim of this is to boost the price of the housing market, then I think this measure will do that. Whether or not that is a good thing is an entirely different issue.
The number of people for whom visas are the only barrier to buying a home in the USA and would spend over 500k on one is probably way too small to have any real impact on the housing market.
Why not $5k? There are plenty of houses going for dirt cheap in the parts of the country hit the worst by the recession. It would mean more people taking advantage of the program and selling that cheap housing would have more of an impact on the housing market and overall economy.
Too bad it must be at least $500,000. The first that came to mind was to buy a derelict house in Detroit somewhere, and then automatically getting a US visa!
The only beneficiaries I can think of for this program would be rich capitalists from China and the Middle East who are exporting their gains and sinking them into foreign property already, and who would now get a fast-track for immigration as well.
I guess Congress would like to get campaign contributions from these people (once you have a green card, you can legally make political contributions to U.S. politicians).
Still waiting for Congress to do something - anything - for people who aren't millionaires (or indeed, are U.S. citizens).
They're not the only beneficiaries. I can think of a few moderately-wealthy foreign-born H1Bs (and equivalent) living in Northern California who might have half a million spare and wouldn't mind buying a $500K house and getting a free greencard if it'd save them the trouble of going through the usual immigration process. Picking, just as a random example, say, me.
I'm not even sure whether I want to remain in the US long term, but if offered a free greencard I'd say yes.
The direct beneficiaries are American homeowners, who get higher prices for overvalued assets and financial institutions holding housing as collateral. The losers are lower-income Americans (often also recent immigrants) for whom the cost of housing remains out of reach.
They would extend the offer only to those that spend half a million dollars on a home. I have a feeling that excludes most of the Canadians bargain hunting for property in Phoenix.
Canada has an over-inflated real estate market, especially in Vancouver, which is equal to the bay area or even more expensive and the best weather we can get within Canada is Seattle style around Vancouver. Canadians finding US houses attractive in these two cases is not surprising.
I don't see a problem in these being the only beneficiaries, right now, they are already getting EB5 visas if they invest in a business. This approach would be similar, except with the added benefit of solving the issue (or at least help) of the housing market. I think this is a really creative approach.
Not like they don't have any other choice if this proposal doesn't pass, if you look at immigration patterns to Vancouver and Toronto.
This would just put US in competitive position with other countries catering to these customers. Potential visa troubles are a non-trivial deal-blocker for many.
This doesn't do that much for the finance industry since it has to be a cash purchase.
Still, I guess it'd drive prices up somewhat. The effect couldn't be huge, though... there's not that many foreigners with half a million bucks cash who want to leave their home countries and reside in the US.
On the other hand, given a choice of all possible immigrants, I don't think there's any problem with the US moving "those with half a million bucks" to the top of the list.
You'd be surprised how many people would take them up on this, Canada, China, the middle east and Asia in general have a lot of rich folks who's kids come to the US for university.
I'm not convinced how effective this will be. The parts in the US where housing prices took the largest hit are also the parts where a foreigner with access to USD$500,000 is least likely to want to go in the first place.
I'm not sure who will take "advantage" of this program -
- $500,000 CASH investment
- You get a 'resident visa', so you can not work here
Source: WSJ.
How about we give incentives to people already in this country?
I propose: You get priority processing on your green card application if you buy a house worth more than $150k, and you can't sell for at least 3-5 years.
Disclosure: I'm on the H1B visa. I bought a house last year while the 'first-time home buyer' $8k credit was available.
This is suited not for entrepreneurs, but wealthy retirees from overseas and also parents of rich overseas students who want to be with their children. This is especially if they can show proof of pension income and will not take up work in the U.S..
However, the US tax laws aren't particularly friendly to the super rich and wealthy. Once you are deemed resident (I read this from phodgen's blog) then you have to pay tax on all your income.
This is the best solution I've heard so far that kills two birds with one stone. You could create a mini housing bubble thereby solving the unemployment and also offer a legal route for immigration for hard working folks. This should also offer a chance of amnesty for all illegal aliens when they buy a house worth 500,000$. Buy a house and get legal status/amnesty for trespassing into the country.
People too. There's plenty of people that would like to move to find employment, but have a mortgage that they need to get out of first. The market is pretty terrible at the moment, and these people end up being stuck. I know a few personally.
America has too many poor people, and not enough rich people.
And it's easier (and more legal) to import rich people than to kick the poor people out.
It makes sense that the countries of the world should be competing for the most talented people. And being rich is the best proxy for being talented that we have.
In case you're looking at this and somehow don't know about http://startupvisa.com/ , take a look and offer your support if so inclined. It would allow non-US entrepreneurs with funding from a US investor to get a visa to start a company. StartupVisa would be wayyy more beneficial than the housing thing... get folks to contribute to society, hire local workers, etc. Those local workers then can in turn buy homes, etc.
So it's the same slave labor problem as H1B.
If you don't like anything the investor suggests after you have moved then he withdraws the funding and you get deported.
Can we think of how a good capitalist VC might use that to their advantage?
I think you're overstating the issue. I am in the US in an H1B visa and am in no way 'slave labor'. But I can't start my own company- the Startup Visa would finally solve that issue.
There aren't many places where it's considered reasonable that your employer can fire you for no reason and have you and your family thrown out of the country aswell.
