Right-Wing Lauds Saverin Decision To Renounce Citizenship

[PainRack]

Eduardo Saverin, the co-founder of Facebook whose falling out with the company and its CEO Mark Zuckerberg was the subject of the 2010 blockbuster The Social Network, renounced his US citizenship last week, and the right has wasted no time labeling him a hero.

Saverin, who owns a roughly four percent stake of Facebook, announced that he was expatriating last week, just in time to avoid paying a federal capital gains tax on the fortune heading his way when the social site files its IPO.

Forbes Magazine, the conservative-leaning and business friendly magazine, ran an article with the headline “For De-Friending The U.S., Facebook’s Eduardo Saverin Is An American Hero.” John Tamny writes:

Saverin’s departure is also a reminder to politicians that while they can obnoxiously decree what percentage of our income we’ll hand them in taxes, what they vote for won’t necessarily reflect reality. Indeed, as evidenced by Saverin’s renunciation, tax rates and collection of monies on those rates are two different things. Assuming nosebleed rates of taxation were a driver of Saverin’s decision, politicians will hopefully see that if too greedy about collecting the money of others, they’ll eventually collect nothing.

Tamny seems to be convinced that Saverin’s departure will open the floodgates for dozens of US executives, investors and other wealthy businessmen who have made fortunes off of stocks and bonds to dramatically renounce their citizenship, break through the shackles of big government and book a one-way ticket to wherever in an attempt to hold on to every last penny they’ve earned. What Forbes and The Heritage Foundation ignore is that the capital gains tax is at a historically low rate, and even proposals to increase it slightly would still fall well short of approaching the rate during the 1970s.

Saverin’s decision to flee the United States is also remarkably shortsighted. As Farhad Manjoo notes on PandoDaily today, Saverin’s life story in particular is one that is quintessentially American.

thinkprogress


And Saverin reply is...
http://sg.finance.yahoo.com/news/facebo ... -pain.html

How much of that is PR covering as opposed to the truth, well, truth will tell. I find it amusing however that the Right-wing elements of the US will not only bemoan Obama for driving away a billionaire, they will hail a non US citizen as a US hero.

[Sea Skimmer]

Worth pointing out that he was born in Brazil, and has lived in Singapore for several years already. It ins't like he tore up the only roots he ever knew to flee by cover of darkness to Asia.

[Simon_Jester]

Rhetorically, this makes a great case in point for "why doth treason never prosper?"

[Zinegata]

Well, that's the problem with a globalized economy. It's way too easy for international corporations and their officers to move money to other countries.

This "hero" thing is completely silly however.

[PainRack]

Worth pointing out that he was born in Brazil, and has lived in Singapore for several years already. It ins't like he tore up the only roots he ever knew to flee by cover of darkness to Asia.

He also renounced his citizenship in september last year. I sincerely doubt that this is explictly linked to the US potentially raising capital gain taxes, although the timeline does fit with the potential expiry of the Bush tax cuts.

The right-wing take on this is literally batshit crazy.
They took a story about the stateless rich, a situation that has accelerated in the last twenty years and compiled it as an Obama is dooming America campaign.

Bloomberg starts the ball rolling. Factual, but opionated.
http://www.bloomberg.com/news/2012-05-1 ... e-ipo.html

It voices the opinion that taxes on expats are burdensome.


Gets expanded to opinions like this
http://blog.heritage.org/2012/05/11/fac ... ed-shores/
Taxes are evil!

And this is all Obama fault, especially for raising taxes later! We should reduce taxation immediately! He's driving away the rich!

[Sea Skimmer]

I'd figure it was straightforward link to him cashing out on the Facebook stock offering. I doubt specific tax laws really mattered; he'll have so much money he never needs to care about anything again.

[HMS Conqueror]

Well, there's at least one solution to this problem that ThinkProgress might want to consider:

[Stark]

In what way is citizenship linked to taxation in America?

Or y'know is this 100% bullshit and he'll be paying tax on money earned in the US just like everyone else and thinkprogress just doesn't know what capital flight actually means?

[Flagg]

In what way is citizenship linked to taxation in America?

Or y'know is this 100% bullshit and he'll be paying tax on money earned in the US just like everyone else and thinkprogress just doesn't know what capital flight actually means?

If you're a US citizen and earn money anywhere in the world you have to pay Federal income tax on it.

[LaCroix]

What exactly would be his gain?

Tax on capital gains in the US is 15% (according to a quick look-up)? That's not even the lowest tax bracket in most countries...

Brazil taxes capital gains , and would claim 27% of a sale that large.
Even Singapore wants 20% of the cake.

But then, I might be overlooking something, tax laws aren't meant to be something easy to decipher.

[HMS Conqueror]

As far as I'm aware Singapore doesn't have CGT. Is there some other tax that would result in the same thing?

[Stark]

In what way is citizenship linked to taxation in America?

Or y'know is this 100% bullshit and he'll be paying tax on money earned in the US just like everyone else and thinkprogress just doesn't know what capital flight actually means?

If you're a US citizen and earn money anywhere in the world you have to pay Federal income tax on it.

How would they even know about it? Do you send tax certificates to the US?

[Flagg]

In what way is citizenship linked to taxation in America?

Or y'know is this 100% bullshit and he'll be paying tax on money earned in the US just like everyone else and thinkprogress just doesn't know what capital flight actually means?

If you're a US citizen and earn money anywhere in the world you have to pay Federal income tax on it.

How would they even know about it? Do you send tax certificates to the US?

Yeah, IIRC you have to send them information about your employment. If you don't and they audit you you're fucked.

[Stark]

American citizenship sounds like pretty funny stuff. :v

[LaCroix]

As far as I'm aware Singapore doesn't have CGT. Is there some other tax that would result in the same thing?

As far as I could see, CG is summed up under general income in Singapore. Frankly, I never heard of a separate CG tax rate (like the US have) before investigating it for this thread. Most countries say income is income.

[HMS Conqueror]

As far as I'm aware Singapore doesn't have CGT. Is there some other tax that would result in the same thing?

As far as I could see, CG is summed up under general income in Singapore. Frankly, I never heard of a separate CG tax rate (like the US have) before investigating it for this thread. Most countries say income is income.

It's in the UK too, and generally is quite common.

The reason is that corporate profits are usually taxed separately, so if you make money through a corporation you are taxed initially on the corporation's profit, then taxed again when it pays the money to you as a dividend. If US citizens had to pay corporation tax (35%) and then higher rate income tax (>35%, depending on state AFAIK), they would have an effective ~60% tax on income derived through corporations.

The US has a low CGT rate, but a high corporation tax rate (which, incidentally, is why a lot of the attacks on high wealth individuals' tax rates are not very honest; usually they ignore the corporation tax element).

[LaCroix]

As far as I'm aware Singapore doesn't have CGT. Is there some other tax that would result in the same thing?

As far as I could see, CG is summed up under general income in Singapore. Frankly, I never heard of a separate CG tax rate (like the US have) before investigating it for this thread. Most countries say income is income.

It's in the UK too, and generally is quite common.

The reason is that corporate profits are usually taxed separately, so if you make money through a corporation you are taxed initially on the corporation's profit, then taxed again when it pays the money to you as a dividend. If US citizens had to pay corporation tax (35%) and then higher rate income tax (>35%, depending on state AFAIK), they would have an effective ~60% tax on income derived through corporations.

The US has a low CGT rate, but a high corporation tax rate (which, incidentally, is why a lot of the attacks on high wealth individuals' tax rates are not very honest; usually they ignore the corporation tax element).

Conceded on the GCT. It really seems to be common.

Still, I disagree about the "their money has been taxed twice argument". Corporations are people (corporate person-hood). Tehy earn their own money. And they don't even need to pay dividends if they don't want to (Apple...) The dividend recipients are different people (usually - a corporation might own their own stock).

Thus, the payment of dividends is in fact a loan payment for money invested, thus subjected to taxation. This will only be done to the extent to the income of the recipient, which usually will not qualify for top bracket - Granny McGee and her small retirement portfolio certainly won't qualify for it, she might even be tax exempt.

The people who do qualify for top bracket usually have huge sums of money flying around. They are, in fact, a one-person bank institute. And you wouldn't argue against a bank having to pay top bracket tax (which is really low in the US, anyway) because the people repaying their mortgages already had to tax their income, won't you?

[HMS Conqueror]

Corporations aren't people, they just have some legal attributes of them for convenience of managing large organisations. All corporations and all money is ultimately owned by people.

Look at it like this: suppose you incorporated as a "consultancy" with one employee (ie. you) and contracted with your current employer to work the same hours in the same job. You aren't mysteriously earning more money just by being called a corporation, but you now pay more tax.

You could argue that rich people should pay a 60% tax rate (ie. pay top bracket twice) but that's not the same as arguing they actually do pay a 15% tax rate. They don't.

[PainRack]

As bloomberg notes,he has paid the capital gains tax on facebook. What he profits from would be if he intends to sell all his shares post IPO when the price skyrocketed.

There are no capital gain tax in Singapore,,singapore does not tax overseas income. Facebook probably qualifies,although any investment gains made due to his residence and work in singapore wont.

Nevertheless,its sheer semantic/loopholes to argue that Saverin escaped taxes. He already paid a devalued cgt in the states n his income is taxed here.Our rates are lower,but they more progressivr than the states.

Lacroix is right if facebook was made in Singapore. If he sold it for 3 billion dollars,he would had been taxed 20%.

[Thanas]

Well, there's at least one solution to this problem that ThinkProgress might want to consider:

As a German, who had his family divided by that wall and remembers the awful border controls very well:

Screw you.

[PainRack]

http://www.iras.gov.sg/irasHome/page04.aspx?id=186
.
I assume that it was stock options. otherwise stock investment arent taxable.


http://www.iras.gov.sg/irasHome/page04.aspx?id=152
He Is a investment trader so his income from that is taxable. if one isnt a trader,its not taxed

[SirNitram]

Worth pointing out that he was born in Brazil, and has lived in Singapore for several years already. It ins't like he tore up the only roots he ever knew to flee by cover of darkness to Asia.

He also renounced his citizenship in september last year. I sincerely doubt that this is explictly linked to the US potentially raising capital gain taxes, although the timeline does fit with the potential expiry of the Bush tax cuts.

The right-wing take on this is literally batshit crazy.
They took a story about the stateless rich, a situation that has accelerated in the last twenty years and compiled it as an Obama is dooming America campaign.

Bloomberg starts the ball rolling. Factual, but opionated.
http://www.bloomberg.com/news/2012-05-1 ... e-ipo.html

It voices the opinion that taxes on expats are burdensome.


Gets expanded to opinions like this
http://blog.heritage.org/2012/05/11/fac ... ed-shores/
Taxes are evil!

And this is all Obama fault, especially for raising taxes later! We should reduce taxation immediately! He's driving away the rich!

It's Heritage. It always compiles things into some version of 'Democrats, taxes, or secularity is dooming America'.

[HMS Conqueror]

As a German, who had his family divided by that wall and remembers the awful border controls very well:

Screw you.

But I'm anti-wall

[LaCroix]

Corporations aren't people, they just have some legal attributes of them for convenience of managing large organisations. All corporations and all money is ultimately owned by people.

Not exactly. If I register a company of "Thomas the Plumber", then while it is a company, it is no legal person, but a company in my name. All earnings will simply be attributed to my personal earnings and summed up as general income. And then it's taxed, once.

If I register a "corporation" (whatever type), which has these legal attributes (called 'legal personhood'), and benefits (limited liability, for instance), then you pay this corporate tax as a fee for having these benefits that normal businesses don't have.

A huge majority of businesses are not subjected to this double taxation, and nobody forces you to make your business an incorporated company.

[HMS Conqueror]

I know what a corporation is.

Being legally assigned [some] rights of persons doesn't make them people, any more than Parliament can turn me into a horse.