Very recently, US President Barack Obama signed into law a legislation to secure the US-Mexico border with $600 million raised by massively hiking work visa fees, ignoring concerns over a “discriminatory” provision that will largely hit Indian firms, including Wipro, Tata, Infosys and Satyam.
There are two parts to this story – one, the US wants to strengthen its forces along its Mexican border to fight illegal immigration; and two, the US wants to secure the jobs for its citizens instead of ‘losing’ them to foreigners.
As far the first part goes, securing its borders is an autonomous decision any country can make and nobody (except the countries involved) can have an opinion on it. However, the money to fund that operation could have come from anywhere – perhaps a cut from the billions-of-dollar sanctions to Pakistan? Or even by increasing taxes levied on trade between the US and Mexico? It’s quite intriguing why the US chose to put the ‘burden’ on the IT industry. And further more intriguing because, it is completely failing at it.
Moving on to the second part, the US seems to be trying to kill two birds with one stone – birds: Mexican Immigrants and Outsourced Workers; stone: The New Law. Sounds a bit too desperate.
Anyhow, the price hike will hardly affect the foreign companies. Companies applying for H-1B visas to ‘migrate’ its employees to the US are definitely servicing US-based clients. The hike in the price of the visas will directly be transferred to the client and hence the money that the US wishes to raise will absolutely come from within! This could be understood as an indirect tax to its own commercial and industrial sector. Furthermore, this premature move only affects the inflow of talented workforce into the US which may have consequences rooted in the future.
To conclude, I feel the whole ‘securing the border’ drama is just an excuse and if the US was really looking to raise money for the cause, it could have directly taxed its people because, the issue is to keep them safe right?