Will The Trump Card Solve the US Debt Problem? Analyzing 4 Potential Markets

Reasonable Doubt
With David Lesperance

A contrarian expert on contingency plans for the wealthy delivers uncomfortable truths.

There has been much speculation from some in the media and even the US President that his announced “Trump Card” would be an economic boon to the US economy and the debt problem. In a recent cabinet meeting, some claimed that the government’s issuance of the Trump Card was imminent.

Therefore, I thought it might be appropriate to test these assertions by looking at its four possible target markets.

Target market 1: Wealthy business people who want access to the US.

This group can already get access to the US through non-immigrant visas such as L-1, E1/E2, O-1, etc.

If they either spend less than the time allotted under the Substantial Presence Test or have either a closer connection or treaty election to overcome the Substantial Presence Test, they will not become US taxpayers subject to US global taxation.

The promoted feature of the “Trump Card” is that the holders will magically only be subject to US territorial taxation. Actually, making this happen would require a change to the definition of a US person for tax purposes in the Internal Revenue Code.

There would need to be a new category that outlines how Trump Card holders’ tax obligations are completely different from the worldwide tax obligations of Citizens, Green Card Holders, and those who trigger the Substantial Presence Test.

Not only is it impossible to make such a significant legislative change by executive order, but there will almost certainly never be a sufficient number of votes in both houses to make such a change.

In fact, the necessary proposed changes are not even included in Trump’s “big beautiful tax bill” that Congress is discussing. Even if this change were to slip into the reconciliation bill at the last minute and somehow pass by a skeptical republican majority Congress, any applicant would know that this tax advantage would only be valid for a ten-year period because of the Byrd Rule.

If not included in the budget reconciliation, it would be subject to democratic filibusters and stands no chance of passing.

Without this permanent tax benefit, the Trump Card has no advantage in justifying a price tag that is six times greater than an EB5 visa, especially for those willing to expose their global wealth to US taxation.

Commerce Secretary Howard W. Lutnick stated that there are 37 million people in the world who could afford this. He even claimed that the administration has already sold 1000 Trump Cards. This is a remarkable claim because not only does the Trump Card not exist in law, but there isn’t even a website where one could register interest.

No one will spend their entire fortune on a donation to the US government for the honor of becoming a US taxpayer.

So in reality, it is generally acknowledged that people would only spend 1/6th of their wealth (i.e., +$30M net worth). According to Wealth X, there are only 395,070 such individuals in the world.

Furthermore, 225,000 of them are already Americans. That leaves a possible total market of 170,000 individuals, not 37 million.

Target market 2: Those who want to garner favor with Trump

They will do something that directly benefits Trump (e.g. Buy a Trump coin, book at a Trump hotel or resort, donate to his library, Super PAC, or inauguration fund, etc.) rather than throw away $5M for the right to be taxed globally for the rest of their lives and estate after their passing.

Target market 3: Employers who want to hire “the top graduate from Wharton or MIT”

Companies can hire such employees through a number of cheaper and faster ways, including:

1) H1B, then employer sponsor Green Card (GC) in a few years ;

2) Funding E2, which would consult the employer and then the employer can sponsor them for a GC in a few years; or

3) Get the employee a Canadian work permit and then permanent residence in their Canadian subsidiary. Immediately get a B1/B2 visa to visit for regular headquarters meetings. After a year, they could then apply for L-1. After Canadian citizenship is granted (three-year naturalization period), the employer can bring them in without limit on a TN visa. The company could then also do an employer-sponsored GC.

Target market 4: Wealthy Americans who want to turn their US global tax liability into a territorial liability

This group would renounce their US citizenship and pay an Exit Tax (capital gains tax on unrealized gains over $890K). Once they have expatriated, they then take their net wealth and put it outside the US. Then they get a Trump Card and return to the US with no need to overcome their current US “life inertia.”

They also enjoy the future growth of non-US income/capital gains, free of US income/capital gains/gift and estate tax!

So in conclusion, the second and third target markets will find better, cheaper ways of reaching their goals. For the first target market, let’s assume that the Trump Card would replace the current EB5 Visa, which has a current price point of $800,000.

In 2024 (a record year), the US issued a total of 12,055 EB5 visas. As the price point would jump six times and the idea of moving from an investment (with potential ROI, no matter how minimal) to a donation, expect this number to drop significantly!

If it ever somehow becomes law with the territorial tax benefit, the Trump Card will only be attractive to current Americans who wish to limit their future US tax liability for a one-time capital gains realization and a $5M USD tithe.

For the US, this would be an “own goal” as it would lose a huge amount of future tax revenue to which it is currently entitled.

So the very predictable answer to the question posed in the title is: No!