President Donald Trump is radically changing U.S. legal immigration by imposing a $100,000 fee for H-1B visas and creating $1,000,000 Gold Card for the wealthy to cut the line.

New H1-Bs are limited to 85,000 annually.

Distributed by lottery to applicants with college degrees and job offers, they are widely used by technology, manufacturing, finance and consulting businesses.

H-1Bs are good for three-years with one renewal and often lead to workers obtaining green cards and permanent residency.

Universities and non-profits engaged in scientific research are exempt from the cap.

Many entrepreneurs, like Elon Musk, entered the country on H-1Bs and contribute significantly to U.S. technological leadership, but the program needs reform.

Although many new arrivals possess exceptional skills, many are employed through worker contracting companies that provide banks and other businesses with cheap labor to perform mundane IT tasks.

While big Silicon Valley companies engaged in Artificial Intelligence (AI) and other cutting-edge activities can tap a vital talent pool, many H-1B workers simply enable large banks and other businesses to pay less for ordinary IT functions.

Often, IT outsourcing firms discriminate against American workers and with workforces dominated by foreign nationals, it’s tough to enforce the requirement that H-1B workers be paid the prevailing U.S wage.

IT employment is declining as AI agents take on more routine tasks in areas like coding, and it's hard to say foreign workers in those positions are filling gaps in the U.S. skills base.

Advocates of the H-1B program like economist Samuel Gregg are correct to say that an arbitrarily high entry fee will deprive the country of an important talent.

However, the president's executive order empowers the Director of Homeland Security to exempt individuals, companies and industries from the H-1B fee for occupations in the national interest.

Similarly, when other analysts like Patricia Lopez say the $100,000 fee is an attempt to fix a broken system that subjects American workers to unfair competition and discrimination, they're right too.

Worker contracting companies flood the lottery with multiple applications for individuals with a single job offer.

This disadvantages individuals applying independently and who wouldn’t have a portion of their salaries skimmed by contractors.

Businesses can also purchase Gold Cards for $2,000,000.

Gold Card immigrants will come in through EB-1 and EB-2 visas, which permit immigration by individuals with extraordinary skills, but Trump is cutting their combined annual quotas to 80,000 from 140,000.

American workers in technology, engineering and other scientific activities will enjoy less competition for employment and higher wages, but overall economic growth will be impaired.

As this column previously noted, the indigenous population only generates enough new young workers to support annual non-farm employment growth of perhaps 300,000.

This severely limits potential GDP growth without more rather than fewer immigrants.

Consequently, arbitrary fees for visas and cutting immigration quotas are unnecessary gambles with American prosperity.

The system surely needs fixing, but selling access in this manner won’t properly ration visas or ensure that we attract the best and most promising young people.

We should adopt a skills-based point system like Canada, curtail the abused family reunification program and eliminate the discriminatory diversity lottery.

Reunification visas should only be awarded to immediate family members to end chain-immigration whereby new residents sponsor distant relatives who in turn sponsor others.

We should set a strict limit related to the number of new immigrants the country needs to sustain 2.5% GDP growth and unemployment no higher than 4.2% — the level the Federal Reserve estimates corresponds to full employment.

Then prioritize skills in awarding visas and limit applications to individuals seeking employment and establishments where they will work.

The latter would put employee contracting firms out of the immigration business and curtail their skimming pay for placing immigrants in American workplaces.

This column has advocated that skills-based visas be awarded by auction, and Indiana Senator Banks has endorsed such an approach for H-1Bs.

Businesses would be discouraged from hiring immigrants in place of more expensive American workers, and fees would be set by market forces.

Businesses aren't going to pay more than they believe they can obtain in additional value from an immigrant worker over an American.

The Trump administration offers no rationale for arbitrarily selecting $100,000, $1,000,000 or $2,000,000. However, $100,000 might prove quite reasonable for an H-1B visa.

Over six years, if an American business can't obtain at least $16,500 in additional value annually from an immigrant employee, it's hard to say the worker possesses an invaluable or unique skill that the U.S. workforce lacks in sufficient supply.

Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.