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July 14, 2007



By lowering the cost of basic goods, immigration makes it easier for unskilled and semi-skilled native workers to make ends meet.

Nathan Smith

Exactly. And it could do so much more than it does now if we let in more immigrants, while levying special taxes on immigrants and paying out immigration adjustment assistance to native-borns. Low-skilled workers might find their money incomes roughly the same, with downward pressure on wages offset by IAA checks from the government. But their purchasing power would be buoyant, as the buying power of the immigrant masses would spur corporations to compete with each other to provide cheap goods and services.


In Hong Kong, living space is relatively expensive, but otherwise basics are very inexpensive so that even the poor can get by. To some extent I think that if we made allowances for the escalating housing costs, we might not even need to institute direct transfer payments that might be politically impossible to reduce during immigration slumps.

in a related note, I think immigration taxation should not include a initial lump sum, since those without the wherewithal to supply such a sum through savings or some sort of loan agreement would have no choice but to immigrate illegally. Instead, we should apply a moderate additional payroll tax that lasts until they become citizens, reach some total or some other combination. Considering the high average quality of those with the motivation to immigrate, I think the level of illegal immigration would drop to a tiny percentage of people who are actually likely to be criminally inclined. I'd have no problem supporting draconian illegal immigration measures at that point.


Immigration indeed has a tremendous impact on economies, but what might have even more impact are farm subsidies. Currently the US is among the least efficient at producing wheat and France among the most efficient, and yet we have subsidies protecting our wheat growers. On the other hand, the US is the most efficient at growing maize, and France among the least efficient growing maize, and yet France has subsidies protecting their maize growers. If the US and France both got rid of subsidies and focused on growing the crops they are best at growing, then the consumers in both countries would be taxed less and have lower wheat and maize prices, which would also effect the cost of all products based on wheat and maize. It would be a win-win for everyone.


Right on, Tom.

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