If you've seen the movie, "The Social Network," then you know the co-founder of Facebook, Eduardo Saverin. He is the man that decided to sue the Facebook founder Mark Zuckerberg for an enclosed amount of money that is still unreleased.
Recently Facebook was estimated to be valued at $96 billion which Saverin responded to by renouncing his US citizenship to apparently avoid his taxes. Originally from Singapore, Saverin decided this would be the place he would move to. According to the article found on yahoo, "Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as 'certain foreign- sourced income,' according to a government website on tax policies there."
Although Saverin is renouncing his citizenship, he still has to pay an exit tax. Saverin will stay have to pay taxes on the capital gains from the stock holdings. He will have to pay taxes on all and even the shares that are not sold will be treated as if they are, there is no escaping the IRS.
Although Saverin will be paying a pretty penny in exit taxes, he will be saving a lot of money by renouncing his citizenship and his investments in foreign companies will only mean for money for the now 30 year old billionaire.
My question to you is, should US citizens be able to renounce their citizenship to avoid taxes? Why or why not?
6 comments:
As a matter of principle, I think renouncing citizenship is shady. Realistically, however, I don't think that there's a huge problem in citizens renouncing their citizenship to avoid taxes. Sure they are able to keep more of their income, but they lose out on all the benefits of being a citizen. I think the most broadly applicable benefits are Social Security and Medicare. Non-citizens are unable to tap into these benefits. Furthermore, citizens are able to vote in elections and travel more easily. Non-citizens will have to acquire certain documents each time they leave and reenter the country. Though Saverin's case is a bit different. Not only do his taxes probably add up to millions of dollars, but since he will no longer be residing in the US, citizenship benefits aren't really an issue. Personally, I would never trade the benefits of a US citizenship to avoid taxes but each to his own I guess.
No, citizens should not be able to renounce their citizenship just to avoid taxes. I know this is getting thrown around a lot by politicians, but I mean it when is say that this is an example of what unpatriotic should be. The government needs money to help pay for entitlement programs, building roads, paying the military, and the list goes on. If you are not willing to contribute your fair share to these funds (especially when you're a billionaire) then that just makes you look incredibly greedy. He has the money to pay taxes, he lives in the United States, so in my opinion, he should pay taxes. What is the point of living somewhere if you are not willing to pay for its upkeep? It would be like living in a house and then letting it rot because you decided that everyone else but you should help pay for the costs of your house. If he is no longer living in the U.S. as Sofia said, then I guess it is not as big a deal, but if he stays, I think my opinion has been made clear.
I guess it is understandable as to why he chose to renounce his citizenship. He still would have to pay up but not as much as he would of had to if he kept his citizenship. I think he should pay his share though, we all have to do it, it just makes him look greedy as Patrick had said. Its unfortunate that he did go through all of that just to avoid taxes but i guess he figured that he would rather keep the money. I know its a big chunk of money that would have been collected in taxes, but really now, you couldn't even contribute back to the country that even gave you the chance of creating Facebook and making all that money?
I think that it should not be illegal to renounce citizenship to avoid taxes. I agree that it is not a very patriotic thing to do especially if you are planning to remain in America. However, as long as the ability to renounce your citizenship for any reason remains, it would be very difficult to prove why a certain person is renouncing his/her citizenship. Thus, adding a clause that says that citizenship cannot be renounced for tax avoidance would simply be a superfluous use of legislation.
I don't know if unpatriotic is what I would call it, especially since he is moving back to the city from which he is originally. It is a bummer that he made that money in the US and then didn't pay taxes back to the country, but I think the exit taxes are a reasonable way to combat it especially since, as Kore said, it would not be plausible to pass legislation prohibiting renouncing citizenship to lessen one's tax burden
this just makes Eduardo Saverin look very greedy. he shouldnt be aloud to renounce his citizenship just so he can avoid some taxes. i agree that the U.S. at this moment really needs the money he would have been paying for etitlement programs such as social security and welfare. Even though he would be paying some taxes it still doesnt make up for what the U.S. has given hime. The U.S. gave him the Opportunity to become a millionare and now he is just renouncing it and just leaving it with barely paying it back. this just makes him look greedy.
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