Opening our borders will solve just about everything

Moving would eliminate autocracies, poverty,

Approximately 70% of the world’s citizens live in autocracies.

Eighty-five percent of the world’s population lives below the poverty line (less than $30 a day).

At our current pace, by the year 2100, 74% of the world’s population will experience 20 days or more of lethal heat each year.

Almost every one of these problems could be solved by opening our borders.

“What is the best way for all of us to cope with the complex interplay of political upheavals and economic crises, technological disruption and climate change, demographic imbalances and pandemic paranoia?” Parag Khanna asks in his book Move: The Forces Uprooting Us. “The answer to all of these questions can be summed up in one word: Move.”

We’ve been migrating for political, economic, and climate-related reasons since the dawn of humanity. The only thing preventing us from moving now is our borders—our countries. 

There’s a good reason we have countries. As long as there was one conquering party, other parties had to defend themselves or become big enough to conquer back. Smaller parties—or ones without a military—were themselves conquered. As a result, the entire earth was claimed with little flags and we now have countries with militaries that can defend them. That’s important—peace needs to be protected from those who want to keep conquering.

The problem with countries is that now we have defined structures that make it very hard for people to move from bad countries (with bad governments, bad economies, or bad climates) to good countries (with good governments, good economies, and good climates), because countries have to pay for all the good things they have (like militaries that protect them and cities that keep them safe and schools that educate them and healthcare systems that keep them healthy) and the thing that pays for all of that is citizens earning money, which is how the government makes money. 

Now we’re in a quandary. Because not everyone who moves to a country is earning an income there, and that means they aren’t paying taxes there. In economically developed countries, roughly 50% of citizens don’t pay federal taxes because they are either children, students, retirees, unemployed, or are working below the tax threshold. Many executives don’t pay their share of income taxes because the bulk of their income comes in equity, and capital gains taxes aren’t as high. That means, in developed countries, only half the population is working and paying federal taxes that benefit the rest, and not equitably. When people move from one country to another, or even spend a year or two abroad, they often aren’t paying taxes there. In an increasingly mobile world, digital nomads might work for a company in one country and pay income taxes there, even as they live in another country where they don’t.

As a result, there might be more people living in a country than there are people paying for it, and we could understandably get into a situation where a smaller portion of the people who live in a country, pay for the larger portion of people who live there, and that could squeeze a country financially until it becomes one of the bad ones.

The obvious solution is to come up with a way for every single person who lives in a place to contribute taxes to it. We can do that, not by taxing income, but by taxing consumption. Now, it doesn’t matter if anyone makes money in a country, it only matters if they spend money. And every single person who lives in a place (or even visits a place) spends money from the moment they arrive.

Yes, I’m suggesting we replace income tax with sales tax.

This is not a new idea—in fact, it was the method proposed by Alexander Hamilton in the Federalist Papers when we were establishing the United States Treasury. More recently, the idea entered the lexicon as the FairTax, a popular talking point during the 2008 election. I was very into the plan back then—it effectively eliminates income tax, corporate tax, and capital gain tax, and replaces it with a flat-rate consumption tax for all new goods and services at 30 percent. If we exempt food, medical expenses, and essentials, lower-income populations would spend next to nothing on taxes, while those who buy mansions and megayachts will spend a lot.

Many agree that a consumption tax would be better for the United States than an income tax, the only reason we haven’t made it happen is because of disputes about the details. Some people think it will work, others worry it won’t. Many want to do it, but a few argue the FairTax isn’t the best way to implement it. And then there’s the short-term economic hurdle we’ll have to be prepared for when it’s first introduced and people adapt their spending habits as a result—no one wants to be blamed for that temporary downturn. But for the sake of this essay, let’s imagine we implement the consumption tax so we can come back to solving the one thing we came here to do: Giving people the ability to move freely about the planet for political, economic or climate reasons.

Now governments are earning money from all their citizens, and can use that money to make the country nicer for all of the people who live here. The more people countries let in, the richer they become. That will allow them to do more good things for citizens like building new cities and new housing and providing social services.

One Gallup World Poll found that “more than 40 percent of adults in the poorest quartile of countries ‘would like to move permanently to another country’ if they had the opportunity.” That trend is likely to continue. Many countries around the world are suffering climate disasters, bad economies, and authoritarian governments, but citizens can’t leave because other countries can’t afford to take them in. Not with our tax dollars, we shout!

But what if it’s with their tax dollars?

With some background checks and the right tax policy, opening up the borders would not only allow emigrants to contribute to our economy but, according to Michael Clemens, would grow our global economy by 20-60 percent! As the director of migration, displacement, and humanitarian policy at the Center for Global Development, Clemens says we’re not taking advantage of half the world’s population who want to work, but can’t because they live in countries with no economy. He argues that restricting emigration is effectively leaving “trillion-dollar bills on the sidewalk.”

“Divide the world into a ‘rich’ region, where one billion people earn $30,000 per year, and a ‘poor’ region, where six billion earn $5,000 per year,” he explains in his paper. “Suppose emigrants from the poor region have lower productivity, so each gains just 60 percent of the simple earnings gap upon emigrating—that is, $15,000 per year. This marginal gain shrinks as emigration proceeds, so suppose that the average gain is just $7,500 per year. If half the population of the poor region emigrates, migrants would gain $23 trillion—which is 38 percent of global GDP.”

In other words, just by allowing people to emigrate from bad countries to good ones, half the people double their income, eliminating poverty worldwide while ushering in a booming worldwide economy. And the countries emigrants move to don’t lose in this transaction, they win, becoming more affluent as newcomers contribute to the economy, buy more things, and add more jobs so we can make more things, growing their incomes over time, and having children who earn even more and spend even more—all of them paying taxes in their new country.

Not only would our global economy skyrocket, but think of how society would progress if we unlocked half the world that, right now, is being underutilized by bad, economically ruinous, and authoritarian governments?

“We have wealthy countries across North America and Europe with 300 million and counting aging people and decaying infrastructure—but roughly 2 billion young people sitting idle in Latin America, the Middle East, and Asia who are capable of caring for the elderly and maintaining public services,” Khanna says in Move. “We have countless hectares of arable farmland across depopulated Canada and Russia, where millions of destitute African farmers are driven from their lands by doubt. There are countries with sterling political systems yet few citizens, such as Finland and New Zealand, but also hundreds of millions of people suffering under despotic regimes or living in refugee camps. Is it any surprise that record numbers of people have been on the move?”

There can be no doubt: Humans will need to be able to move freely about the planet—this is how we’ll survive authoritarianism, poverty, and climate change.

Thank you for reading,

Elle