Last night I watched Fareed Zakria host a very interesting show:
Mr. Zakaria – Thank’s for a job well done! I assume the Podcast will be available soon.
A fair characterization of the “Readers Digest” version would be:
1. In certain parts of the world with declining populations, immigration is a necessity for the survival of the nation. He uses Japan as the example.
2. As important as immigration is, some countries manage immigration better than others. The countries of the EU have NOT done a good job assimilating immigrants from outside the EU into their cultures.
3. Australia and Canada are countries that need immigration and they have done a good job of managing immigration and assimilating immigrants into their cultures. (My understanding is that approximately 50% of the population of the City of Toronto was born outside of Canada. Although Toronto has its share of problems, the problems are not based on cultural diversity.)
4. The U.S. could learn a great deal from other countries. When one considers the issue of immigration it needs to be considered from both the perspective of:
A. Legal Immigration – How to proactively and intelligently bring people into the country
On this note it is important to recognize that the U.S. absolutely needs immigration. Some of the reasons are:
– the U.S. like most Western countries has a declining birth rate, an aging population and an inability to fund government services for that aging population. It needs to bring in younger people to broaden its tax base and essentially pay for a population that is aging.
– the U.S. desperately needs workers with the skills demanded by U.S. companies. Specifically those with advanced degrees in math and technology. Mr. Zakaria suggests that the shortage is approximately two million. In other words, U.S. companies cannot find the workers they need to run their companies. Should U.S. companies leave the United States in search of a better work force? Does it make sense that a “super bright” young person from India comes to MIT, earns that advanced degree, wants to remain in the U.S., and then returns to India because of an immigration policy that won’t allow them to stay? How stupid this that? Shouldn’t the U.S. automatically allow certain graduate students to have that “Green Card?”
B. Illegal Immigration – How to deal with the problem of people moving to the U.S. and living and working illegally. In fairness, Canada does not have a significant problem with illegal immigrants. Perhaps the climate is too cold. The U.S. perceives itself to have a problem with illegal immigrants. Assuming the U.S. does have a number of illegal immigrants, one might ask whether this is really a problem. New York’s Mayor Bloomberg was interviewed by Mr. Zakaria. He noted that:
– there is a very low crime rate in the community of illegal immigrants;
– illegal immigrants seem willing and able to take jobs that U.S. citizens will not;
– illegal immigrants pay taxes;
– illegal immigrants are low users of government services.
Comment: If this is how illegal immigrants behave, I am not sure why the U.S. is not encouraging more illegal immigration. Wouldn’t it be better to find a way to deport the legal immigrants who are a drain on government services?
Towards An Effective and Rational U.S. Immigration Policy
Good political leadership can turn a bad situation around. So, at least in theory not all is lost. How can this be done? The starting point is “Form Nation” is an extremely dysfunctional political entity. While the rest of the world is progressing, “Form Nation” creates more forms, creates more criminals (by creating more laws) and works hard at increasing the regulation of people’s lives and stripping them of their constitutional rights. Because of it’s “Nationalistic Narcissism” it can’t see the world as anything but a reflection of itself. But, enough of my rant today … Getting back to business …
North Bay, Ontario – A Profile of a “Turn Around” – Getting Different Government Departments Working Together
North Bay is a small city in Northern Ontario. It has seen its share of economic bad times. Former Ontario Premier Mike Harris hails from North Bay. In any event, a previous Mayor of North Bay had a problem. The problem was attracting business to North Bay. He recognized the frustration that businesses experienced when considering establishing themselves in North Bay – all these different government departments. Examples include: zoning, building, environmental, tax, etc. He recognized that all of these departments would have an impact on the decision to locate in North Bay. In other words, various government departments worked together to anticipate and solve potential problems. A business would know what it was “looking at” and what needed to be done.
Therefore, he did something mindlessly simple and unprecedented. He invited a prospective business to a meeting where representatives from ALL the relevant government departments would be present. All issues recognized and all questions answered at the same time.
This is a model that the U.S. could use. Of course, present at the meeting should be the IRS and Treasury to inform would be immigrants in clear terms what will happen to them if they maintain foreign bank accounts, etc. The current policy of the U.S. government is to keep all this nastiness a secret until it is too late.
The failure to include “Tax and Compliance Education” in the immigration process
It’s mindlessly simple. By allowing the IRS to come after legal immigrants for failing to report foreign bank accounts (how could anybody know of this) the U.S. is:
– giving legal immigrants every reason to leave
– potential immigrants every reason to go to Canada instead
– tarnishing the reputation of the U.S. as having a just society
This is simply not conducive to a rational immigration policy. The effects of this will be far reaching. Some may point to statistics that suggest that the U.S. is a “high demand” location for immigrants. Possibly. But, the real issue is whether the U.S. will be a “high demand” location for those math and technology types – the ones that the country so desperately needs. This group will have a choice of destination. Canada and Australia are very high demand places for immigration. They are also countries that won’t subject an immigrant to “life altering” penalties if they violate laws they didn’t know about.
The Most Costly Mistake Ever To U.S. Immigration
This one is the fault of the IRS. The fact that the IRS has allowed a single legal immigrant to enter OVDI because they didn’t know about FBAR requirements and other aspects of U.S. taxation is an embarrasment to the United States. The OVDI program (with the help of the “cross border professionals”) has caused massive and irreparable damage to the immigrant community. Not all of these immigrants will leave. Many will leave before they are subject to the “Exit Tax”. But, you can be sure that their friends and family members will look to other countries as their destination of choice. The IRS commissioner has publicly stated that OVDI is a success because approximately 30,000 people entered it and the IRS grossed approximately 3 billion dollars from this “FBAR Fundraiser“. When one evaluates success one must consider both benefits and costs. What do you think OVDI might have cost the U.S. in “good will”? I suspect that by any rational standard the IRS has orchestrated and presided over the most costly mistake in the history of U.S. immigration policy. Of course, it may be some time the real damage is apparent.
Oh, and by the way: these legal immigrants who did not know about FBARs are NOT “tax cheats”! Just hard working, honest people, trying to take care of their families, and participate in (what they thought) was the American Dream! Will they encourage others to immigrate to the U.S.? Not likely. The fear and stress of possible tax non-compliance has destroyed the lives of many immigrants. The loss to the U.S. is the gain of Canada and Australia.