The rejection comes based on a key constitutional principle that separates powers between executive and legislature. Under the US Constitution, the legislature — Congress — alone is empowered to impose a new tax. The Trump administration imposed the levy without the legislative sanction, which violates the basic principles of separation of powers in a democracy
The refusal of a US federal appeals court to revive the Trump administration’s $100,000 fee on new H-1B visas offers relief to thousands of skilled professionals from India and other countries. It will also be a reprieve for American companies that depend on global talent to fill specialised positions to remain competitive.
The rejection comes based on a key constitutional principle that separates powers between executive and legislature. Under the US Constitution, the legislature — Congress — alone is empowered to impose a new tax. The Trump administration imposed the levy without the legislative sanction, which violates the basic principles of separation of powers in a democracy.
Though the Trump administration called the levy a fee, which is an administrative charge for processing visas, the US judiciary treated it as a tax and hence declared it illegal. The judgment, therefore, is not against the imposition of a hefty levy on the H-1B visas, rather it is against the executive acting beyond its constitutional authority.
This relief, however, may prove short-lived. Republican lawmakers have proposed a new legislation seeking to suspend the issuance of new H-1B visas for three years and formally authorise the $100,000 fee. As Republicans have a majority in both chambers of Congress, the House of Representatives and the Senate, the proposal cannot be dismissed as mere political signalling. If Congress enacts this law, it will stand judicial scrutiny and allow the Trump administration to reimpose the fee.
The H-1B programme has long attracted criticism in the US over alleged misuse, wage suppression and the displacement of American workers. Its critics argue that companies exploit loopholes to underpay visa holders or use the programme to replace domestic employees, while the companies claim that the H-1B visas allow them, as a result the United States, to stay competitive, which is key for survival in the capitalist world. The US, therefore, needs to decide whether it wants to trade competitiveness for welfare.
