Opinion

Felix Salmon

The negative value of US citizenship

Felix Salmon
Aug 26, 2013 14:34 UTC

Kirk Semple has a big piece today on a longstanding phenomenon: the millions of people who live in America, who are eligible to become citizens, and yet who never do so. The numbers: there are roughly 8.8 million green card holders who are eligible to naturalize; about 750,000 people naturalized in 2012. Overall, if you’re still in America and you received a green card more than 20 years ago, there’s roughly a 60% chance that you became a citizen somewhere along the way.

This being a NYT story, there’s lots of talk about national identity: the lead anecdote is about a man who worries that he would “feel a little less Italian” if he became a citizen. And there are many people who become citizens, or who don’t, on purely patriotic grounds. But there are lots of other forces at play here, many of which Semple ignores entirely, or barely touches on.

Firstly there’s the fact that in many cases becoming a US citizen is a trade-off: while you acquire certain rights in the US (foremost among them the right to vote), you also lose certain rights — and sometimes your very citizenship — in your country of origin. For instance, consider a landowner with a green card who owns land in both her native country and the US. Often, the minute she becomes a US citizen, she can no longer own land back “home”.

More generally, if your home country requires that you give up your native citizenship when you become an American, then the choice can be a very tough one.

But beyond, that there are numerous much more practical considerations at play. Semple touches on one, which is the sheer cost, both financial and psychic, of going through the naturalization process. Another is jury duty. Being a non-citizen is like having a permanent “get out of jail free” card whenever you get a jury summons; many US citizens would value such a thing very highly.

And then there’s travel. It’s much easier to travel the world on a US passport than it is on a passport from, say, Syria, or Bangladesh — but, that said, there are countries which really don’t like admitting Americans, and if you already have a passport from Canada, or the EU, then you’re going to find it just as easy to travel as you would if you had one from the US. Especially given that green card holders are eligible for line-jumping programs like Pre✓ and Global Entry.

The weirdest omission from Semple’s piece, however, is the whole issue of taxes. A green card holder can leave the US at any time, give up her green card, and thenceforth never have to pay a cent in US taxes, or even file a US tax return, ever again. Again, this is an option which would be valued extremely highly by many Americans. By becoming a US citizen you essentially give up that option, as the likes of Eduardo Saverin have learned to their cost. If there’s even a small probability that you might want to move or retire to a low-tax jurisdiction, then it makes financial sense to keep the green card but not become a citizen.

Finally, it’s worth noting a statistical symmetry: the proportion of green card holders who eventually become US citizens is pretty much the same as the proportion of US citizens who vote. Voting is the top reason to become a citizen — and it’s something which roughly 40% of American citizens don’t bother to do. The NYT comments section is full of angry people who are deeply offended at the idea that people might be living in the US and not becoming citizens at the earliest opportunity. But really, if you have the same attitude towards voting as 40% of the US population, why bother? After all, if you take the option value of remaining a green card holder into account, becoming a US citizen probably has negative value, overall.

COMMENT

Hey guys,

First of all one cannot look at getting a citizenship for selfish/personal reasons. Many who get naturalized citizenship every year get it for personal satisfaction of being an American and the ability to participate in making this country a better place by participating in jury duty and voting. For people complaining about paying taxes after leaving this country, I can give you my personal reasons on why I feel its fair to do so. First of all, I moved into this country when I was in elementary school and got free education paid for by tax payers till graduating high school. I also got subsidized tuition for college and medical school, where I saved around 20-30 thousand dollars a year because I was an in-state resident. I also got the benefits of living in a country with good roads, electricity and water due to taxpayers money that I would not get in my home country. If I do decide to go back to my home country once I retire, I would not once hesitate to keep my US citizenship or hesitate to pay taxes, because it is immoral to do otherwise. Besides you also get the benefit of social security and medicare, and the opportunity to come to this country to visit anytime I want as a citizen. Paying some money to the betterment of this country in terms of taxes is a small price to pay for benefits and opportunities I have gotten which eventually will give me the ability to have enough money to retire anywhere around the world.

Posted by Randpaul | Report as abusive

The no-brainer immigrant-entrepreneur visa

Felix Salmon
Feb 27, 2013 16:33 UTC

Many thanks to the Kauffman foundation for crunching the numbers on a key part of Jerry Moran’s clumsily-named Startup Act 3.0 — the new visa for immigrant entrepreneurs. I don’t have an opinion on the rest of the bill, but it does have two sections which are something of a no-brainer when it comes to immigration reform. One is the immigrant-entrepreneur visa; the second is the idea of giving green cards to up to 50,000 foreign students who graduate from an American university with an advanced degree in science, technology, engineering, or mathematics — so long as they remain in that field for five consecutive years.

The immigrant-entrepreneur visa is pretty simple. You create a pool of 75,000 such things, available to anybody who’s here already on an H1-B or F-1 visa. When those people switch from their old visa to their new one, they have to start a new company; employ at least two full-time, non-family member employees “at a rate comparable to the median income of employees in the region”, and invest or raise at least $100,000. After that, they have to continue adding employees at a rate of one per year, so that after three years, there must be at least five employees. At the end of three years, you graduate to a green card, and with it the standard path to citizenship.

The visa addresses the main problem which Ross Eisenbrey has with H1-B visas: the fact that people on such visas are “more or less indentured, tied to their job and whatever wage the employer decides to give them”. The new visa would create an employer exit strategy for H1-Bs, allowing workers to leave companies which pay too little or offer too few opportunities, and instead strike out on their own.

And of course — by definition — it would create jobs. The Kauffman foundation’s math is solid, here: they conservatively estimate job creation at somewhere between 500,000 and 1.6 million new jobs after ten years, and possibly substantially more. (Those estimates don’t include jobs created by the new firms after they’ve left the program, for instance.)

I also like the fact that the new immigrants created by this program would go overwhelmingly to the parts of America where immigration is wanted and embraced: big cities and research hubs. This plan is full of positive externalities: it improves tax revenues, from all the new employment and consumption; it improves America’s share of global innovation, and of course it helps to position America once again as the land of opportunity.

The Kauffman foundation is understandably worried that the visa would unfairly punish failure in an inherently risky world, but we’re living in a world of pivots, these days, where a gay social network can become a discount shopping site — and so long as the immigration people are OK with pivoting business plans, I think the failure problem will be manageable.

Most fundamentally, however, this visa is a great idea just because without it, the incentives are all wrong. As Stuart Anderson demonstrates, “in a practical sense, it may be easier to stay in the United States illegally and start a business than to start a business and gain legal temporary status and permanent residence (green card) as the owner of that business”. If we want to reduce illegal immigration, we obviously have to make it less attractive than legal immigration: as Jeb Bush and Clint Bolnick point out, you can only realistically ask illegal immigrants to “return to their native countries and wait in line like everyone else” insofar as there is, actually, a line to wait in. Right now, there isn’t one.

The only real question, when it comes to this visa, is how it’s going to get signed into law. The proponents of immigration reform tend to fall into one of two groups: US employers, on the one hand, who are looking to increase the size and/or quality of the pool of potential employees they’re choosing from; and illegal immigrants, on the other hand, along with their families and friends, who want to stop living in the shadows. Neither group has much incentive to support an immigrant-entrepreneur visa. But let’s hope we manage to get one somehow, anyway.

COMMENT

Odd. My prior comments were deleted.

Anyway, @Realist50, while not quite stated that way I believe the median wage is for median wage within that particular field/job. It is a semi-ineffective way of preventing wages from being depressed.

The problem with the startup visa is that there’s nothing preventing it from just offshoring more jobs. I’m guessing many domestic companies are already considering programs to help these fledgling companies raise the money.

And the auto-green card is little more than a slush fund to open up the visa cap–only it also automatically brings in the additional workers permanantly.

Posted by John80224 | Report as abusive

Will the world ever have open borders?

Felix Salmon
Jun 30, 2011 07:16 UTC

My favorite bit in this video comes towards the end, when I ask Charles about the wonderful tweet he sent out last Friday, after the gay marriage bill passed the New York senate.

One day we’ll see legal discrimination by *place* of birth as evil as discrim. by other features of birth –gender, orientation, color.less than a minute ago via web Favorite Retweet Reply

I wanted to know, was this just a lovely sentiment, or does Charles really think this is going to happen? The answer is the latter, and Charles gives two strong reasons why that might be the case.

One is the way that the world is getting smaller and more interconnected. Countries make hundreds of agreements with each other, they set up organizations like the UN and the EU, and in general behave much more pleasantly towards each other than they ever have in the past. And at some level that has to be because doing so is what their people want.

Charles’s second point was about mobility and immigration, and it’s a great one. Greater levels of immigration aren’t just a fantastic idea from a national-security standpoint and a fiscal standpoint, they’re also demographically necessary for an aging America which has a lot of labor-intensive needs in a service sector which can’t be outsourced. “The self-interest of people will weaken the effects of borders,” says Kenny, which is surely true. Americans don’t like immigration, but they love the low prices that immigration brings for their golf courses and swimming pools and McMansions.

There’s a long distance between appreciating the upside of immigration, on the one hand, and extolling the idea of completely open global borders, on the other, where everybody has the same right to work in the US, no matter where they were born. There’s many people who would push for the former, and almost nobody who would push for the latter. But as the economic distance between countries shrinks, the problems associated with such a policy will get smaller. And Charles points out too that there will be increasing numbers of Americans who want to live abroad; those Americans would in principle be quite happy to sign bilateral open-border agreements with the countries they’d like to live in.

None of this is going to happen in our lifetimes, but if you look at how far the world came over the course of the last century, there’s reason for optimism about how much more progress it can make in this one. Countries already go to war with each other much less frequently than they did in the past; the insane cost of war alone is one good reason why that might be. And without wars to make us hate each other, we’ll surely continue to get friendlier towards each other.

Sometimes, too, change can happen astonishingly fast. David Schlesinger touched on this in his chat with me yesterday — look at the way in which the Chinese government is successfully serving the interests of the Chinese people today, compared with 20 or 30 years ago.

The main official obstacle to Chinese people traveling around the US today is not China’s government, it’s America’s. And while we fear China in many ways, the spectre of mass Chinese immigration to the US is not one of them — to a large degree, America could and should welcome an influx of Chinese entrepreneurialism, which could quite possibly be funded with some of China’s trillions in foreign exchange reserves. From a US perspective, much better all that investment and job creation happen here than in China.

They put something in the water, here in Aspen, which makes people very optimistic. (Although maybe it’s inactive early in the morning: both Steve Adler and I were unimpressed by the latest demographic analysis purporting to find a centrist, consensus-driven majority in America.) But the world really is getting better, and has been for a couple of centuries now, and it’s very likely to continue doing so, in its lumpy and unpredictable way. Which means that, sooner or later, there’s a good chance that Charles’s dream will come true.

COMMENT

The concept of open boarders is stupid. It embraces the idea that you and your 5 brothers and 3 sisters can royally screw up the place you were born, see the impact of your culture / communities lousy decisions and then bolt for greener pastures where the locals plan smarter and work harder.

Good fences make good neighbors.

Posted by y2kurtus | Report as abusive
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