Senators want to block Facebook’s Saverin from reentering the U.S(venturebeat.com)
venturebeat.com
Senators want to block Facebook’s Saverin from reentering the U.S
http://venturebeat.com/2012/05/17/senators-block-saverin-citizenship/
81 comments
"Reaching across the aisle"? Hee. You must not have read much about Republicans in Congress lately. It takes quite a bit more than a little elbow grease and "reaching across the aisle" to get anything real passed these days.
As if the democrats are any better. They still haven't passed a budget in the Senate since Obama has been in office. Both parties suck.
Incorrect on both counts. Democrats in Congress do not have anything remotely resembling the record of consistent obstructionism for its own sake that the GOP has. Nor do Democrats sign ideologically-required Grover Norquist "pledges" before taking office. Nor do they filibuster any and all appointees to anything close to the extent that the GOP has in recent years. And lastly, the Senate has, of course, passed budgets yearly during Obama's term...no thanks to the Republicans.
Please show me the budgets they passed.
The US wouldn't get a cut of that unless the exchange rate really sucked and that £20,000 was worth more than $90,000. Plus any UK taxes you paid on it (assuming there is a taxation treaty between the UK and US) are deductible from your US tax liability.
In general you have to either live in a country that doesn't have a tax treaty with the US or not pay taxes on your income in the country in which you reside.
In general you have to either live in a country that doesn't have a tax treaty with the US or not pay taxes on your income in the country in which you reside.
That is only true for "Earned Income" if he's not self employed. If he's a web contractor for example, he still has to pay self-employment taxes %15.3 of his UK earned income received from his UK clients, EVEN IF HE LIVES IN THE UK... to the US... fair? really?
http://www.irs.gov/publications/p54/ch03.html#en_US_2011_pub...
http://www.irs.gov/publications/p54/ch03.html#en_US_2011_pub...
A Brazilian who got US citizenship, helped create thousands of jobs in the US, moved to Singapore in 2009 and effectively lives and works there since then, applied to drop his US citizenship in January 2011 and will pay the exit tax for it will now potentially be subjected to an illegal (re constitution) retroactive law to "punish" him when the main reason (I speculate) he decided to do so is the crazy American legislation that wants expats to pay their taxes twice (abroad and at home) even if they really live and work abroad?
Ah..it's election year
Ah..it's election year
Why not, after all actions must have consequences. If he wants to avoid taxes and it's legal by all means he should do it. But there should be consequences to his actions, this proposition seems like a possible one (quite extreme though).
I would like to remind all the wannabe rich on HN who believe that one day they will be in his shoes, nobody succeeds alone and your success has a price for the country. For example in the case of Facebook there are more infrastructure costs for the whole internet, additional regulations have to be passed, etc...
PS: Ghostery on Venturebeat: 17 spying widgets found... Not going on that website ever again.
I would like to remind all the wannabe rich on HN who believe that one day they will be in his shoes, nobody succeeds alone and your success has a price for the country. For example in the case of Facebook there are more infrastructure costs for the whole internet, additional regulations have to be passed, etc...
PS: Ghostery on Venturebeat: 17 spying widgets found... Not going on that website ever again.
Isn't this completely backwards? Why would you be able to punish someone for doing something completely legal? Do we punish profitable corporations who pay no tax? Of course not; they're abiding by the laws. If you want to prevent this stuff from happening, change the law.
> If you want to prevent this stuff from happening, change the law.
Isn't that what they are trying to do?
Isn't that what they are trying to do?
"Isn't that what they are trying to do?"
No they are not. They are trying to skim money out of someone who worked his ass off and when it is time to get paid, he is being shortchanged.
No they are not. They are trying to skim money out of someone who worked his ass off and when it is time to get paid, he is being shortchanged.
The only thing he provided was the angel funding for Facebook. He literally hasn't done any work to earn the increase in the value of Facebook's stock since he got fired a few months after Facebook launched. This guy is practically the reason for founder vesting cliffs.
He's not being shortchanged; he's done nothing to earn this money.
He's not being shortchanged; he's done nothing to earn this money.
Yes, exactly. They are trying to change the law with the "Ex-Patriot Act". Also, let's address this:
>Do we punish profitable corporations who pay no tax? Of course not; they're abiding by the laws.
Maybe we should change this law too. Especially in a political environment that is supposed to be doing everything it can to support small businesses. It takes a certain sized corporation to be able to funnel their earnings through Ireland (for example). Makes it hard to compete for the little guy.
>Do we punish profitable corporations who pay no tax? Of course not; they're abiding by the laws.
Maybe we should change this law too. Especially in a political environment that is supposed to be doing everything it can to support small businesses. It takes a certain sized corporation to be able to funnel their earnings through Ireland (for example). Makes it hard to compete for the little guy.
No we don't because regulators are always one step before the corporations on taxes.
Actions that you take legally must have consequences too, as long as these consequences are legal the thread of legality has been preserved along the way. It's not a punishment, it's a consequence. I am not born in the US, thus I don't have the right to be the US President, is it a punishment ? No it's simply a consequence.
I would love all people that say that we need to "fix" the tax system instead of making "rich go" to take a step back and get out of their simplistic views. The tax system and a state is infinitely more complex than any company you could imagine. The worst part is that a country sets its own rule and thus has way more responsibility. Moreover higher instances require a state to behave a certain way and prevent certain behaviors. Even worse, external entities such as foreign countries can interfere with internal regulation mechanism (that's what's happening in this case).
The US being a relatively free state cannot prevent any body to abandon a nationality and thus to lower their tax. For most it's an important procedure which allows you to forfeit other nationalities and take a nationality that requires you to have no other nationalities( some countries impose that). Tax evasion is a constant battle because the laws have to guarantee cases like the one I mentioned but they are also used to save money. Thus legislator are constantly fighting a war against tax evasion and this is one example.
Again, your success has a burden on the whole community and we have to pay it. I know why it's so hard to understand here, many of you who see themselves as future entrepreneurs are thinking "Oh gosh, it's going to happen to me one day, I don't like that" and want to fight against it, but really try to see vastness of the complexity of the problem. There is no simple fix.
edit: Changed the phrasing
Actions that you take legally must have consequences too, as long as these consequences are legal the thread of legality has been preserved along the way. It's not a punishment, it's a consequence. I am not born in the US, thus I don't have the right to be the US President, is it a punishment ? No it's simply a consequence.
I would love all people that say that we need to "fix" the tax system instead of making "rich go" to take a step back and get out of their simplistic views. The tax system and a state is infinitely more complex than any company you could imagine. The worst part is that a country sets its own rule and thus has way more responsibility. Moreover higher instances require a state to behave a certain way and prevent certain behaviors. Even worse, external entities such as foreign countries can interfere with internal regulation mechanism (that's what's happening in this case).
The US being a relatively free state cannot prevent any body to abandon a nationality and thus to lower their tax. For most it's an important procedure which allows you to forfeit other nationalities and take a nationality that requires you to have no other nationalities( some countries impose that). Tax evasion is a constant battle because the laws have to guarantee cases like the one I mentioned but they are also used to save money. Thus legislator are constantly fighting a war against tax evasion and this is one example.
Again, your success has a burden on the whole community and we have to pay it. I know why it's so hard to understand here, many of you who see themselves as future entrepreneurs are thinking "Oh gosh, it's going to happen to me one day, I don't like that" and want to fight against it, but really try to see vastness of the complexity of the problem. There is no simple fix.
edit: Changed the phrasing
Again, your success has a price on the whole community and we have to pay it.
Could you explain this statement? Specifically, what is the price of Saverin's success that is paid for by the rest of us?
The normal justification for taxation is that they pay for public services, e.g. roads and police. Saverin is no longer consuming those services. Why should he continue paying for them?
Could you explain this statement? Specifically, what is the price of Saverin's success that is paid for by the rest of us?
The normal justification for taxation is that they pay for public services, e.g. roads and police. Saverin is no longer consuming those services. Why should he continue paying for them?
"A price on the whole community" might not have been the best phrasing, but I'd tend to agree that Saverin benefited immensely from being in the US (and that the stable government supported by taxes absolutely played a role in his success).
As for why he should continue to pay for services he is no longer using? Well, to me his current money is a kind of deferred income from the years he was in the US. He earned his billions while he was at Harvard, and then later while he was in the US. The income wasn't realized until later, because that's how startups work.
I see this as a completely different situation from an American who leaves the US, takes up residence in Canada, earns a salary in Canada, pays Canadian taxes, makes investments as a Canadian resident, etc. This was a situation where someone actually earned the wealth in the US, as a US citizen.
As for why he should continue to pay for services he is no longer using? Well, to me his current money is a kind of deferred income from the years he was in the US. He earned his billions while he was at Harvard, and then later while he was in the US. The income wasn't realized until later, because that's how startups work.
I see this as a completely different situation from an American who leaves the US, takes up residence in Canada, earns a salary in Canada, pays Canadian taxes, makes investments as a Canadian resident, etc. This was a situation where someone actually earned the wealth in the US, as a US citizen.
> He earned his billions while he was at Harvard
IMHO the deferred argument is bogus, it's not like he could have pocketed then but decided not to. Whatever valuation Facebook will get tomorrow is, well, tomorrow's valuation.
Was attending Harvard free? Don't think so
> The income wasn't realized until later, because that's how startups work.
so would a founder get some money back if his startup bombed and he lost his money? Or is all the downside on him while the upside must be shared?
IMHO the deferred argument is bogus, it's not like he could have pocketed then but decided not to. Whatever valuation Facebook will get tomorrow is, well, tomorrow's valuation.
Was attending Harvard free? Don't think so
> The income wasn't realized until later, because that's how startups work.
so would a founder get some money back if his startup bombed and he lost his money? Or is all the downside on him while the upside must be shared?
Was attending Harvard free? Don't think so
I have no idea. I don't think the government provided him with a free apartment or car either. It's not really central to my argument. My point is that he earned this money while living in the United States as a citizen of the United States, even if he didn't realize the gains until later.
so would a founder get some money back if his startup bombed and he lost his money? Or is all the downside on him while the upside must be shared?
This is pretty much how taxes work. You generally pay more in taxes when you make money than when you lose money.
EDIT: One thing I would say - if he has legally paid his taxes, then I don't think he should be barred from re-entry into the United States. I may not like the strategy, but I don't see how you can be accused of having renounced your citizenship for the purpose of avoiding taxes if the US imposed an exit tax on you and you paid it!
I have no idea. I don't think the government provided him with a free apartment or car either. It's not really central to my argument. My point is that he earned this money while living in the United States as a citizen of the United States, even if he didn't realize the gains until later.
so would a founder get some money back if his startup bombed and he lost his money? Or is all the downside on him while the upside must be shared?
This is pretty much how taxes work. You generally pay more in taxes when you make money than when you lose money.
EDIT: One thing I would say - if he has legally paid his taxes, then I don't think he should be barred from re-entry into the United States. I may not like the strategy, but I don't see how you can be accused of having renounced your citizenship for the purpose of avoiding taxes if the US imposed an exit tax on you and you paid it!
[deleted]
...Saverin benefited immensely from being in the US (and that the stable government supported by taxes absolutely played a role in his success).
This is irrelevant to the question of Saverin paying individual income taxes. Any foreign investor gains these benefits and pays for them via corporate income taxes and the like.
Should all foreigners who make investments in the US be subject to US income taxes? If not, then this argument is moot.
This is irrelevant to the question of Saverin paying individual income taxes. Any foreign investor gains these benefits and pays for them via corporate income taxes and the like.
Should all foreigners who make investments in the US be subject to US income taxes? If not, then this argument is moot.
No, I think that income earned in the United States should be subject to US income taxes.
I would consider stock that was earned while working in the US to be income earned in the US, even if they don't become valuable and aren't exercised until a later date.
I would consider stock that was earned while working in the US to be income earned in the US, even if they don't become valuable and aren't exercised until a later date.
Here's a thought-
His actions provided massive value to the US, creating an enormous amount of wealth that did not previously exist and adding to the nation's assets.
Far from exacting a price on a community, his actions have paid off quite handsomely for the community.
His actions provided massive value to the US, creating an enormous amount of wealth that did not previously exist and adding to the nation's assets.
Far from exacting a price on a community, his actions have paid off quite handsomely for the community.
What evidence do you have that his actions provide massive value? I grant that the actions of somebody at Facebook did, but I don't have particular reason to believe that he was the key factor. He was, after all, forced out early on, and hasn't done much interesting since.
This business of attacking Saverin personally is ridiculous. You do it, other people do it, and eventually it seems like the thing to do. Then when Congress starts to attack Saverin it seems normal. We have to go after those greedy rich bastards, don't we? But it's a very dangerous precedent. Do the words "bill of attainder" not mean anything to anyone here?
I couldn't agree more. But that would be true if his tax rate were 5%, 15%, or 25%.
Nobody likes paying taxes, but I'm not radical enough to believe that someone who becomes a billionaire while working and living in the US as a US citizen shouldn't pay US taxes. Almost nobody does - it's the tax rate that people really disagree about.
What that rate should be is, of course, open to debate, but I don't really see it as central to this particular argument. I think this is more narrowly about the extent to which the money Saverin made from facebook should be considered money earned in the US as a US citizen.
Nobody likes paying taxes, but I'm not radical enough to believe that someone who becomes a billionaire while working and living in the US as a US citizen shouldn't pay US taxes. Almost nobody does - it's the tax rate that people really disagree about.
What that rate should be is, of course, open to debate, but I don't really see it as central to this particular argument. I think this is more narrowly about the extent to which the money Saverin made from facebook should be considered money earned in the US as a US citizen.
We have to pay something now, make up for the lost revenue. The government could have probably made a lot more off Saverin over his lifetime if they had a sensible tax policy. No wonder Saverin is fleeing to Singapore.
You cannot use legality as a defense for two reasons:
1. By renouncing your citizenship you put yourself in an extra-legal position.
2. The laws are perceived as underdeveloped. That's why the situation has attracted the attention of US senators.
1. By renouncing your citizenship you put yourself in an extra-legal position.
2. The laws are perceived as underdeveloped. That's why the situation has attracted the attention of US senators.
exactly. could not agree more
There are consequences. He no longer gets to vote. He no longer has access to US-funded social programs. There is a long list of things he can no longer enjoy as a US citizen; natural consequences of not being a citizen. It sounds like you support introducing unnatural consequences.
I once visited the US on business and left without purchasing anything more than a meal. If every action must have consequences, what consequences would you suggest for my actions? Perhaps I should be banned from re-entering the US since I didn't contribute significantly enough to the US economy while I was there?
I once visited the US on business and left without purchasing anything more than a meal. If every action must have consequences, what consequences would you suggest for my actions? Perhaps I should be banned from re-entering the US since I didn't contribute significantly enough to the US economy while I was there?
"But there should be consequences to his actions"
You mean consequences to actions that he took legally ?
You mean consequences to actions that he took legally ?
Yeah, let's sacrifice individual liberty for larger government revenues, and justify it using class warfare.
Only winner here is Singapore, with a tax policy that makes way more sense than United States tax policy.
Only winner here is Singapore, with a tax policy that makes way more sense than United States tax policy.
A better idea would be to deport the Senators to Somalia or Turkmenistan or somewhere, and block them from re-entering the U.S.
How would this help anything?
It would be a start. Our government is totally evil, corrupt, and invasive. Anything that takes away from their ability to interfere with things is a Good Thing.
Deport all the Senators, then the House Reps, then all of the judges, the President, Vice President, and then start on the rank-and-file bureaucrats... Oh, how I long for that day.
Deport all the Senators, then the House Reps, then all of the judges, the President, Vice President, and then start on the rank-and-file bureaucrats... Oh, how I long for that day.
My understanding is that the rule blocking reentry from people who drop citizenship for tax reasons is longstanding. I'm entirely in favor of both the rule and the application in this case.
This goes on frequently within the US, too. A friend of friends made north of $100m in the dot-com bubble on a company that later collapsed. He made his money in SF, but bought a house in Nevada so that he could dodge the California taxes.
It may be legal, but it was a douchebag move, the moral equivalent of going out for a meal with a big group and sneaking out before the check arrives.
This goes on frequently within the US, too. A friend of friends made north of $100m in the dot-com bubble on a company that later collapsed. He made his money in SF, but bought a house in Nevada so that he could dodge the California taxes.
It may be legal, but it was a douchebag move, the moral equivalent of going out for a meal with a big group and sneaking out before the check arrives.
"the moral equivalent of going out for a meal with a big group and sneaking out before the check arrives."
Not quite. Saverin played a major part in cooking the meal (using your analogy) and deserves his fair share of sneaking out before the check arrives. Heck, he should be paid for making the meal and a thank you!!
Not quite. Saverin played a major part in cooking the meal (using your analogy) and deserves his fair share of sneaking out before the check arrives. Heck, he should be paid for making the meal and a thank you!!
Yes but society did a lot as well (for example providing enough free education so that most people are even able to use FaceBook in the first place), and thus they are do their share as well. Instead, he is trying to duck out so that his fair share gets minimised as well.
It's like trying to leave the dinner party and leaving $40 when your meal added up to $43.25 before tip and tax.
It's like trying to leave the dinner party and leaving $40 when your meal added up to $43.25 before tip and tax.
Please. The fellow played a modest early role and was then forced out because he wasn't competent to handle the rest. His was a minor role in a major startup, and he is basically a lottery winner. For which I say: congrats!
Also, you misunderstand restaurants in the same way you misunderstand economies. The guy who chops the vegetables in the 3 months after the restaurant opens should certainly be paid and thanked. But his job only exists because of heavy investment by the restaurateur.
And that sous chef should still pay his taxes just like everybody else, because restaurants are heavily dependent on civic infrastructure.
Also, you misunderstand restaurants in the same way you misunderstand economies. The guy who chops the vegetables in the 3 months after the restaurant opens should certainly be paid and thanked. But his job only exists because of heavy investment by the restaurateur.
And that sous chef should still pay his taxes just like everybody else, because restaurants are heavily dependent on civic infrastructure.
And that sous chef should still pay his taxes just like everybody else, because restaurants are heavily dependent on civic infrastructure.
The issue in question is whether the sous chef, after leaving the US permanently and renouncing his citizenship, should pay taxes to the US on his investments above and beyond what any foreign investor would pay.
Saverin did pay his taxes just like everybody else. The question is whether he should now pay taxes above and beyond what other Singaporeans are obligated to pay.
The issue in question is whether the sous chef, after leaving the US permanently and renouncing his citizenship, should pay taxes to the US on his investments above and beyond what any foreign investor would pay.
Saverin did pay his taxes just like everybody else. The question is whether he should now pay taxes above and beyond what other Singaporeans are obligated to pay.
Do you have any evidence that he's sold all his stock? Because he wouldn't have paid all his capital gains tax until the last share is sold.
If he has indeed paid all the tax on the Facebook lottery winnings, then I don't have a problem with him renouncing his citizenship. But I've seen estimates that he saves $100m by doing this, and I presume that's because he still has the stock.
If he has indeed paid all the tax on the Facebook lottery winnings, then I don't have a problem with him renouncing his citizenship. But I've seen estimates that he saves $100m by doing this, and I presume that's because he still has the stock.
You are right. From a few random websites: "In 1996, Congress included a provision in the expatriation law to bar entry to any individual “who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States.”
This section of the 1996 Immigration law, known as the Reed Amendment, added ex-citizens to the list of other “excludables” which includs practicing polygamists, international child abductors, and aliens who have unlawfully voted in U.S. elections."
Avoiding taxes by moving after the fact is an asshat thing to do.
This section of the 1996 Immigration law, known as the Reed Amendment, added ex-citizens to the list of other “excludables” which includs practicing polygamists, international child abductors, and aliens who have unlawfully voted in U.S. elections."
Avoiding taxes by moving after the fact is an asshat thing to do.
Avoiding taxes by moving after the fact is an asshat thing to do
No it isn't. Avoiding paying taxes is the Right Thing To Do. The idea that taxation is just or right is rooted in some ridiculous ideas, like the notion of an "implicit contract" which is a total oxymoron. Contracts are explicitly, well, explicit. The idea that someone drew some lines on a map, gave that area a name and created something called "government" and now have some authority to collect money from anybody who happens to be inside those lines is absolutely absurd.
No it isn't. Avoiding paying taxes is the Right Thing To Do. The idea that taxation is just or right is rooted in some ridiculous ideas, like the notion of an "implicit contract" which is a total oxymoron. Contracts are explicitly, well, explicit. The idea that someone drew some lines on a map, gave that area a name and created something called "government" and now have some authority to collect money from anybody who happens to be inside those lines is absolutely absurd.
Ah, capitalized phrases, the sign we've crossed from politics to religion. In the name of the Fountainhead, and of the Galt, and of the Holy Dollar: go forth and tax no more. Hear our prayer, St. Ayn.
That you find something absurd isn't proof that it's a bad idea, or that it doesn't work, or that you can just pretend your fantasy world will be awesome. I think it's absurd that we genius beings of ethereal light and wisdom are implemented on top of leaky, decaying bags of meat. But that's how it works for now, and denial isn't going to make my life any better.
That you find something absurd isn't proof that it's a bad idea, or that it doesn't work, or that you can just pretend your fantasy world will be awesome. I think it's absurd that we genius beings of ethereal light and wisdom are implemented on top of leaky, decaying bags of meat. But that's how it works for now, and denial isn't going to make my life any better.
That you find something absurd isn't proof that it's a bad idea
No, but it's still a bad idea.
and denial isn't going to make my life any better.
So work on changing the situation. That what I do vis-a-vis my issues with the way American society is implemented. At least with this stuff, we have tools at our disposal to try and actually change things: running for office, volunteering for campaigns, donating money, spreading the word about better ways of doing things, etc., etc.
No, but it's still a bad idea.
and denial isn't going to make my life any better.
So work on changing the situation. That what I do vis-a-vis my issues with the way American society is implemented. At least with this stuff, we have tools at our disposal to try and actually change things: running for office, volunteering for campaigns, donating money, spreading the word about better ways of doing things, etc., etc.
There's no evidence he qualifies under that clause. He didn't renounce to avoid taxation, quite the opposite: He was paid up on his taxes and paid an "exit tax" according to the quote in an article I read last night.
The USA requires you to get permission before renouncing. Part of the process of getting that permission is being audited by the IRS to make sure you're up to date on your taxes, and paying an excise tax on the money you're taking out of the country.
The clause you're referring to is for people who sneak money out of the country and then trick the US into "letting" them renounce where the US thinks they are up to date on their taxes but they aren't because they hid the money. There's no evidence he has hid any money, and no evidence that he has renounced to avoid paying taxes.
Unlike most countries, the USA taxes citizens on their worldwide income, no matter where it is earned or where they live. This means that unless you want to be paying taxes to the USA for money earned outside the USA for businesses outside the USA, you have to renounce.
Further, if he sold all his Facebook stock before giving up citizenship, he's already paid taxes on it. If he has kept that stock, then it is still the stock of a US company listed on a US exchange and after it goes public, he'll still have to pay taxes if he sells any shares-- just as any non-US citizen who owns stock on an american exchange does.
I can't see any evidence that he's avoided any taxes by leaving--- except taxes on income he produces outside the USA.... and why would the US have any right to that income anyway?
The USA requires you to get permission before renouncing. Part of the process of getting that permission is being audited by the IRS to make sure you're up to date on your taxes, and paying an excise tax on the money you're taking out of the country.
The clause you're referring to is for people who sneak money out of the country and then trick the US into "letting" them renounce where the US thinks they are up to date on their taxes but they aren't because they hid the money. There's no evidence he has hid any money, and no evidence that he has renounced to avoid paying taxes.
Unlike most countries, the USA taxes citizens on their worldwide income, no matter where it is earned or where they live. This means that unless you want to be paying taxes to the USA for money earned outside the USA for businesses outside the USA, you have to renounce.
Further, if he sold all his Facebook stock before giving up citizenship, he's already paid taxes on it. If he has kept that stock, then it is still the stock of a US company listed on a US exchange and after it goes public, he'll still have to pay taxes if he sells any shares-- just as any non-US citizen who owns stock on an american exchange does.
I can't see any evidence that he's avoided any taxes by leaving--- except taxes on income he produces outside the USA.... and why would the US have any right to that income anyway?
This is political BS aimed at making rich people look bad in an election year and nothing else. As if 60 million means anything at all to our budget. Less than 2k people left last year. At most we are talking about a few billion in a multiple trillion budget. It just doesn't matter. The negatives of not having intelligent businessmen ever come back far outweighs the few bucks we could have taken from them. I'm just going out on a limb, but I suspect facebook has generated more than 60 million for the government so far.
I find it funny that the US is acting like a scathed lover when in actuality it was her own restrictive propensities that push him away. GG USA for scaring away another great BF.
I don't get why people keep saying Saverin filing his paperwork in January 2011 makes it completely obvious that he was not doing this to avoid paying taxes. Facebook was going to have an IPO and the guy was clearly preparing for it.
It may not be illegal, but it sure is disgusting.
It may not be illegal, but it sure is disgusting.
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I just sent a letter to Sen Casey, one of my senators.
I want to know why he is wasting his time on this crap.
I can think of a lot of other issues that he should be spending his time on.
Wouldn't this be a retroactive law? Surely it wouldn't apply to him as he renounced his citizenship before the law was made?
No, the restriction only applies to criminal laws.
Also, having renounced his citizenship and already given up his U.S. residency, he is no longer subject to the protections of the U.S. constitution.
Also, having renounced his citizenship and already given up his U.S. residency, he is no longer subject to the protections of the U.S. constitution.
Lots of Rich people pay less income tax than the middle working class or even the lower working class. Should we kick them out of the country too, for being intelligent?
Don't we all want to pay less tax? If there was a legal loophole would you do it?
Don't we all want to pay less tax? If there was a legal loophole would you do it?
I don't particularly want to pay less tax. I just want to pay my fair share. Having lived in places with much shoddier governments, I think I get pretty good value on my dollar. So when somebody is trying to dodge their fair sahre, I don't like it.
What about the hoards of riches who invest in foreign countries?
I mean, they made their money in the US, not just do they use the infrastructure, but also take money from American people directly.
Now they want to send the money out, and help other countries to start businesses and create jobs?! They might as well live in those 3rd world countries themselves, forever!
I mean, they made their money in the US, not just do they use the infrastructure, but also take money from American people directly.
Now they want to send the money out, and help other countries to start businesses and create jobs?! They might as well live in those 3rd world countries themselves, forever!
if they are US citizens they pay taxes in the US even if they do live in those "3rd world countries" 9after having paid whatever taxes they owe to the "3rd world countries"...)
Does this mean we can stop Arrington from reentering California too?
The visa rules already say this, as was pointed out by pretty much all news stories at the time. Is there any way this isn't just grandstanding and cheap point-scoring?
http://www.uscis.gov/ilink/docView/22CFR/HTML/22CFR/0-0-0-1/...
http://www.uscis.gov/ilink/docView/22CFR/HTML/22CFR/0-0-0-1/...
There's no evidence he qualifies under that clause. He didn't renounce to avoid taxation, quite the opposite: He was paid up on his taxes and paid an "exit tax" according to the quote in an article I read last night.
The USA requires you to get permission before renouncing. Part of the process of getting that permission is being audited by the IRS to make sure you're up to date on your taxes, and paying an excise tax on the money you're taking out of the country.
The clause you're referring to is for people who sneak money out of the country and then trick the US into "letting" them renounce where the US thinks they are up to date on their taxes but they aren't because they hid the money.
There's no evidence he has hid any money, and no evidence that he has renounced to avoid paying taxes.
Unlike most countries, the USA taxes citizens on their worldwide income, no matter where it is earned or where they live. This means that unless you want to be paying taxes to the USA for money earned outside the USA for businesses outside the USA, you have to renounce.
The USA requires you to get permission before renouncing. Part of the process of getting that permission is being audited by the IRS to make sure you're up to date on your taxes, and paying an excise tax on the money you're taking out of the country.
The clause you're referring to is for people who sneak money out of the country and then trick the US into "letting" them renounce where the US thinks they are up to date on their taxes but they aren't because they hid the money.
There's no evidence he has hid any money, and no evidence that he has renounced to avoid paying taxes.
Unlike most countries, the USA taxes citizens on their worldwide income, no matter where it is earned or where they live. This means that unless you want to be paying taxes to the USA for money earned outside the USA for businesses outside the USA, you have to renounce.
California is 20% illegal immigrants, paying no tax at all. Those ones they do not block from entering...
Well they probably pay sales taxes, just saying....
This doesn't pass the laugh test, even if you had a source, which you don't.
Have you heard of the sales tax? You might have come across mention of it somewhere. I'll give you a hint. It's around 9% in CA, depending on where you live.
Have you heard of the sales tax? You might have come across mention of it somewhere. I'll give you a hint. It's around 9% in CA, depending on where you live.
Most illegal aliens actually pay taxes, as businesses are mostly worried about the IRS not the INS, but aliens can't collect S.S. so it is a net win in that sense. But not a sensible way to run a country.
Non US citizen here.
I think the senators are taking this personally. More than 'He didn't pay the tax' this is about 'Does US no longer matter that people are renouncing citizenship?'
The fact is rest of world thinks they don't need US or go to US to do big things, anymore. That is something for the Senators to think about.
I think the senators are taking this personally. More than 'He didn't pay the tax' this is about 'Does US no longer matter that people are renouncing citizenship?'
The fact is rest of world thinks they don't need US or go to US to do big things, anymore. That is something for the Senators to think about.
Sure, lets keep foreign born past citizens who helped create $100B companies from coming back to the USA. That will show them!
I really don't think we could survive another attack on the order of Facebook!
I really don't think we could survive another attack on the order of Facebook!
I don't think Saverin's contributions are really proportionate to his windfall. But even that aside, yes, it's great that people come to this country to build things. But this country also offers a lot that makes that possible (there's a reason they come here, after all), not least the enforcement of laws and a relatively level playing field, and part of the bargain is that you pay some back when you win.
You could argue that what he's doing now amounts to insider trading.
You could argue that what he's doing now amounts to insider trading.
You seem to be arguing that he didn't "pay some back when you win". However, as part of the renunciation process you have to be up to date on your taxes, and you have to pay a tax on any money you move out of the USA. Thus he's already paid his taxes.
Now he's a citizen and resident of singapore. He's got a couple investments there. But your claim that he owes the US taxes on what he built in the USA would seem to no longer apply, right? Since he's building the next thing in singapore, wouldn't he owe singaporean taxes?
If he didn't renounce, the US government would be taxing him on the money he makes in Singapore on a singapore business as well. Even though he's no longer benefiting from the "services" provided by the US government.
The US is unusual in the fact that it taxes citizens on their worldwide income. Further, it imposes fairly onerous reporting requirements that make it difficult for US citizens who live outside the USA to conduct business.
Just because he spent 10 years here, doesn't mean the US really deserves a cut of everything he makes for the rest of his life. This is why there's a renunciation process, and he has gone thru that process legally.
Now he's a citizen and resident of singapore. He's got a couple investments there. But your claim that he owes the US taxes on what he built in the USA would seem to no longer apply, right? Since he's building the next thing in singapore, wouldn't he owe singaporean taxes?
If he didn't renounce, the US government would be taxing him on the money he makes in Singapore on a singapore business as well. Even though he's no longer benefiting from the "services" provided by the US government.
The US is unusual in the fact that it taxes citizens on their worldwide income. Further, it imposes fairly onerous reporting requirements that make it difficult for US citizens who live outside the USA to conduct business.
Just because he spent 10 years here, doesn't mean the US really deserves a cut of everything he makes for the rest of his life. This is why there's a renunciation process, and he has gone thru that process legally.
I think the way the US claims taxes on foreign income is wrong. But this is clearly not foreign income, and he's leaving with clear foreknowledge of a likely future windfall.
I don't think anyone is claiming he has not complied with the law. They're saying that if he wants to renounce citizenship, he must also renounce the benefits of being in the US. If that's truly his intention anyway, then he has nothing to worry about, right?
I'm sure that even if this happens he's not going to shed many tears. If he wants to see his family, they can just meet somewhere else.
I don't think anyone is claiming he has not complied with the law. They're saying that if he wants to renounce citizenship, he must also renounce the benefits of being in the US. If that's truly his intention anyway, then he has nothing to worry about, right?
I'm sure that even if this happens he's not going to shed many tears. If he wants to see his family, they can just meet somewhere else.
"But this is clearly not foreign income"
The IRS themselves disagree with you on that statement.
http://www.irs.gov/publications/p54/ch04.html#en_US_2011_pub...
The IRS themselves disagree with you on that statement.
http://www.irs.gov/publications/p54/ch04.html#en_US_2011_pub...
Either he sold his Facebook stock before leaving, in which case he already paid taxes on it. Or he didn't, and since FB is an american company listed on an american exchange, when he sells any of it he'll still be subjected to long term capital gains, as any other non-US citizen who owns stock on a US exchange is.
Thus the only thing to be upset about is that we have a person who has the ability to produce a high income for himself that the USA can no longer tax.
Thus the only thing to be upset about is that we have a person who has the ability to produce a high income for himself that the USA can no longer tax.
Non-resident aliens are specifically excluded from paying capital gains to the US. I wonder why? The US also refuses to collect information on income earned in the US by foreign residents (currently there are some efforts to change this, being obstructed by congress). Of course if you suggest that this means the US is a tax haven then you are in for an earful. Other, bad, countries are tax havens. Never the magnificent USA!
A far more equitable solution to the Saverin 'problem' would be to apply CGT to ALL US-derived gains. Most countries do this. But that is unlikely to happen as it would reduce foreign investment...
A far more equitable solution to the Saverin 'problem' would be to apply CGT to ALL US-derived gains. Most countries do this. But that is unlikely to happen as it would reduce foreign investment...
I think U.S. citizens have, at least, some warranted sense of righteous indignation here. The guy came to the U.S., jumped onboard a company that really couldn't have made it this big anywhere else (at least at the time), takes the money and runs. I think people are generally well within reason to dislike his choices and reform the system to prevent he and others from repeating.
If a Brazilian interviewed the founders of a company remotely, made a remote angel investment, and the company became a success in the US, should the Brazilian also be obligated to pay individual US income taxes?
If not, what difference does it make that the Brazilian resided in the US for some period of time?
Note that the corporation is still paying US taxes by virtue of being physically located in the US. The issue is whether the investor should pay additional individual income tax on top of that.
If not, what difference does it make that the Brazilian resided in the US for some period of time?
Note that the corporation is still paying US taxes by virtue of being physically located in the US. The issue is whether the investor should pay additional individual income tax on top of that.
Your first remark is irrelevant because he didn't just reside in the US. He is/was a US citizen. This is not an issue of whether or not the investor should pay income taxes on top of it or not. This is a tangential issue that is not what's being debated, though it is a reason that a lot of people get upset.
I do not understand the fuss about this. If Saverin gave up his US citizenship legally, plans to live outside the US for many years, who cares what taxes is he avoiding? These senators need to get their acts together and fix the tax code instead.
If he truly intends to live outside the country and not return here, then what's proposed has no teeth. But it's more likely that he's doing what many wealthy people have done before him, namely renouncing citizenship officially, but continuing to spend as much time as they please in the US. It actually seems pretty reasonable to deny reentry to someone who has left and had a nice windfall as a result. (Perhaps cleaner: demand repatriation of any capital gains as a condition of visa issuance. Assets acquired after the renunciation are of course exempt.)
he's been living and working in Singapore since 2009 and there is no way for a non citizen "to spend as much time as they please in the US". You'd need a Visa that is linked to work and in that case work would be of course taxed in US.
Wealthy people can get investment visas pretty easily:
http://en.wikipedia.org/wiki/E-2_visa
http://en.wikipedia.org/wiki/E-2_visa
which is what I wrote: there is no way he can just spend as much time as he wants without approval, supervision. And the Visa can be rejected
It actually seems pretty reasonable to deny reentry to someone who has left and had a nice windfall as a result.
How is it reasonable? What exactly is the USA gaining by this action? How is this making life better for the citizens of the United States?
This is just political bullshit, nothing more, nothing less. The Senators involved are far more harmful to the USA than Eduardo Saverin ever will be.
How is it reasonable? What exactly is the USA gaining by this action? How is this making life better for the citizens of the United States?
This is just political bullshit, nothing more, nothing less. The Senators involved are far more harmful to the USA than Eduardo Saverin ever will be.
Quasi-related tax rant: I am not a US citizen, but I live here. I want to get a green card (the process for that is another rant entirely). If I get one, I will owe tax on my earnings in any country. Earn £20,000 in the UK? Well, the UK gets a tax cut of that. Oh, and so does the US, for reasons unknown. America is the only country that does this, as far as I know.