This Eduardo Saverin story is just the kind of link-bait in which Chuck Schumer specializes. He would make a good search engine optimization chief at a website. But there is a larger point, and not just bad Facebook puns, to be made in the controversy over Facebook co-founder Saverin’s renunciation of citizenship to avoid tax liability derived from the social network’s upcoming IPO.
In a press release, Schumer and Casey called Saverin’s move an “avoidance scheme.” The plan they will introduce later on Thursday specifically takes aim at individuals like Saverin who “flee” the country and become residents of another, taking measures to re-impose taxes on expatriates and bar them from re-entering the country.
Schumer and Casey charge that Saverin is looking to save up to $67 million in taxes by renouncing his citizenship. The amount was calculated by Bloomberg as Saverin’s initial capital gains bill, but denied by Saverin’s spokesman.
Specifically, the ex-PATRIOT Act, which stands for “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” would “impose a mandatory 30 percent tax on the capital gains,” as well as attempt to re-impose the taxes on any expats found to have left the country simply to avoid taxes. This would only apply to people with a net worth over $2 million or an average tax liability over a five-year period of $148,000 and up. The bill would also add to the existing rule that those who renounce their citizenship for tax purposes be barred from entry into the United States again, increasing the enforcement of that rule.
This is not a widespread practice. Last year 1,700 people renounced their citizenship, and not all to avoid taxes. Since taxes on the rich are incredibly low in America compared to the rest of the world, it would be odd to see a rash of expats like this unless they all really like Singapore, Saverin’s destination. And at the state level, where there is some variance in tax rates, the studies show that rich people moving to capitalize on tax treatment is a very rare occurrence.
But I don’t necessarily mind making an example out of someone who thinks the rules don’t apply to them. I’ve seen enough highlighting of welfare queens and undocumented immigrants to be OK with a big press conference for a billionaire tax dodger. This new legislation would probably not apply to Saverin, since he’s already renounced his citizenship. It is, I suppose, a warning to others to not follow him down the same path. But more than that, it just points out, at an anecdotal level, a certain hubris on the part of one member of the global elite. Maybe populism is a dirty word in Washington, but I still see a bit of value in that.




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I wonder how many Americans who have lost gainful employment and tapped IRAs or 401k to maintain a decent standard of living, get kids through college, pay mortgages healthcare cost, health insurance under fear of tax penalty, avoided the Taxes levied by state and IRS on necessitous premature distributions? Now Saverin renounces citizenship to avoid taxes? Saverin, don’t come back to America you myopic selfish pos.
Now if we could just get Jamie Dimon to renounce his citizenship, leave the country, and never be allowed back…
Riffing on BeachPopulist (who has the right idea), rather than focus on taxes, why not up the ante and demand people like Dimon, Blankfein and so forth just leave the country, so we can finally solve our problems without their braying interference?
It’s not like Dimon and Blankfein pay any more taxes than Severin. But at least Severin isn’t out there bribing POTUS, all of congress and so on. It is for this reason alone I could care less what Severin does. Indeed, I wish the more nefarious members of the ruling elite would follow his example and just (bleep)ing leave!
Let’s give Severin a flag others can follow! A nice marching tune would be nice too, but I’m getting ahead of things a bit.
Besides, almost everyone finds tax policy issues painful on the noggin in more ways than I can count. This option would at least have good entertainment value.
This guy’s family immigrated to the United States because some of the gangs in Brazil had targeted him for kidnapping, his father being wealthy. He had the benefit of living in a society in which gangs weren’t roaming the streets, targeting rich peoples’ children for abduction and/or murder. He benefited uniquely in a society that fostered the creation of things like Facebook. Then, he shows his gratitude by bailing out just when he can afford to make some repayment and investment in others’ futures. The guy is loathsome and despicable and it’s no wonder the right wingers admire him so much. I’m inclined to agree that realistically this isn’t going to save the Treasury and balance the budget but the proposal isn’t about anything other than a “Screw me? No! Screw YOU!”
I find it interesting that they’re reaching down to the ex-pats with 148,000 in tax liabilities over 5 years. That’s under 30 grand a year, not a poor person, but likely to be a retiree, soaking up the sun in Belize.
Just opened a Tiki bar on the beach, caters to the tourists and fellow ex-pats. Lives on investment income, works on his small boat. Laughs a lot.
Poor bastard.
I like Schumer, and it’s too bad he lost his lottery ticket. He does have a knack for sounding resentful whenever he’s in his moment.
Saverin can be a citizen wherever he wants. Maybe he’ll find someone in Singapore who needs a kidney, and he can redeem himself that way.
Great point. Lots of them in Baja, Costa Rica, etc.
Great point. From this angle, they’re just using a rich guy they can’t possibly touch to go after people far less well off… that they can and will touch, simply because they can.
Ya gotta watch the small print with these D-bags. They never miss an opportunity to wage class warfare.
It’s like the Payroll Tax Holiday. Sure, it’s a tax-cut. But it also defunds Social Security, which will bite most Americans in the ass at the worst time imaginable.
Remember to vote Democratic and stuff, okay?
Oh, and how exactly, are they going to prove that you left the country “simply to avoid taxes”?
The really rich are laughing up their sleeves at this brouhaha.
They are thoroughly insulated from negative effects by tax attorneys.
Maybe he is unhappy about the deteriorating political situation in the US. Many Jews with means also left Germany in the 1930s you know.
Seeing comments like yours, and horrifying comments made by the government in the recent New York NDAA trial as illustrated in a recent article here on FDL, I have to say that maybe what he’s done is pretty damned prescient.
Didn’t the Supreme Court tell us that Corporations are people now? I wonder if any of Schumer’s or Casey’s corporate…I mean “people”…. donors are involved in any type of overseas “tax avoidance scheme”?
http://www.zerohedge.com/news/simple-question-senator-schumer
We have a hashtag for that: #DumpFacebook
Actually, the people who are getting hammered by the ex-Patriot act are people who emigrated 35 to 40 years ago, never renounced their citizenship, and are now being asked to pony up taxes on gains they made on their homes and businesses. To my knowledge no other country does this. It used to be that if you voted in a foreign election you forfeited your citizenship. Since the 1967 Israeli war this is no longer the case, so people who left but didn’t renounce are now subject to having their children’s inheritances seized by the United States government. I know a lot of people who are afraid, who always filed but are fearful now for their pensions.
He is doing absolutely the right thing: why should he be paying taxes on income he receives in other countries? I don’t believe this is all about money. Since no one asked for his reason for renouncing his citizenship, why do we assume it is only about money? And Schumer, a putz that he is, tries to gain political advantage. Why does he not go after Wall Street? He knows who is buttering his bread. It is possible that Saverin refused to contribute to Schumer’s favorite charity, himself. And why should Saverin live in a country populated by dumbest people in the world? What is going on in this country politically is unbelievable. It is probably the only place on the planet where people will vote against their own economic interests. So, until someone speaks to Saverin and finds out why he did it, lets just look in the mirror and see what we would have done in his place. Plus, with this this kind of money, he is way more sophisticated financially than an average American.
Chuckles is a flaming hypocrite…http://www.zerohedge.com/news/simple-question-senator-schumer