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Taxes on H-1B visas pay for border bill

Alisa Roth Aug 13, 2010

Taxes on H-1B visas pay for border bill

Alisa Roth Aug 13, 2010


Kai Ryssdal: President Obama signed a border security spending bill today. A cool $600-million to put more agents and equipment on the job along the Mexican border. Given the state of the federal government’s bank balance though — that is, deeply in the red — you might wonder where the money’s going to come from. Well, says the White House, from taxes on a very different kind of immigration — H-1B visas, the ones for skilled workers.

Marketplace’s Alisa Roth reports.

ALISA ROTH: The plan will make it more expensive for certain companies to get H-1Bs — those are the visas for skilled workers.

LINDSAY LOWELL: It’s clearly not going to pay for the majority of the border funding that’s being called for the new bill.

Lindsay Lowell is an expert on international migration at Georgetown University.

LOWELL: The number of companies affected isn’t really known, and the number of H-1Bs they employ is not always known. But one suspects, and I think all the evidence points to, a rather small number of firms being actually affected.

Lowell says that at any given moment between 400- and 600,000 workers in U.S. have H-1B visas. But this tax will only apply to companies where more than half the employees are H-1B holders — in other words, it won’t affect the big tech firms.

What it will hit are the so-called body shops, these are mostly Indian companies that provide outsourced workers to American employers. To write software, for example. But it could have larger consequences for U.S.-India trade relations.

Jagdish Baghwati is a professor at Columbia. And an expert on globalization. He says American companies have been trying to negotiate all kinds of deals in India.

JAGDISH BAGHWATI: So large numbers of these transactions are at stake and I think India has been opening up, but when it sees something like this happening at our end, that’s going to provoke retaliation.

He says this move makes it look like we’re becoming more protectionist. Something which could make India less inclined to let Americans do business there.

In New York, I’m Alisa Roth for Marketplace.

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