Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

[photon555]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Let's see. "There shall be no ex post facto laws." "The accused shall be presumed innocent until proven guilty." Will the last true American patriot to leave please take down the flag and bring the Constitution with him. There must be some other country that appreciates life, liberty, and the pursuit of happiness. Instead of at least seeing the real problem: a bloated, corrupt government that would rather imprison it's own people than let them leave in peace, these two hypocritical clowns in the Senate just see the situation as another opportunity to get their worthless mugs before a camera, and their names in print. What's next, a concrete wall around the country and machine gun towers. I'd like to see Schumer's and Casey's financial records for the last decade. I'd bet dollars to donut holes (inflation at work) that they'd both need to live to 200 to get released from a well deserved prison sentence. The 16th amendment must be repealed before we're all outright slaves. Nobody can live free while the IRS exists.

[goodrich4bk]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Interesting to see all the Saverin apologists here. You do realize that $67 million is 1.74% of his 3,840,000,000 windfall, don't you?

Having made all of his money exploiting his fellow citizens' desire for social connectivity, he flees to an island to avoid a 1.74% tax. And this is evidence of what, exactly? That Mark Cuban is next? That Steve Jobs was a putz? That we'll never again see the likes of a man with the genius and vision of Saverin?

I'll tell you what I think it evidences: pathological greed.

Not that long ago, my father returned from WWII victorious. His generation saved the free world from tyranny. But their first thought was not to reward themselves with a tax cut. To the contrary, facing the largest debt in our country's history, they taxed themselves at the marginal rate of 91% and entirely paid off their war debt before their children started college 20 years later. And that all occurred under a Republican administration.

Today's generation faces the same issue, but they are blinded by greed and a sense of entitlement that appears to have no bounds. Much of our nation's debt was incurred in the Cold War, a struggle that resulted in the fall of communism in both the USSR and China, and in the Middle East to secure oil resources without which our economy would have long ago collapsed. While Singapore (Saverin's new home) was quaking in Red China's shadow, and Brazil (Saverin's old home) was incapable of supporting a democratic market economy, Americans were innovating, risking and, yes, fighting and dying for the freedoms and entrepreneurial opportunities Mr. Saverin now enjoys. Moreover, it was the West's example --- that a free society is also a wealthier society --- and not just our military expenditures that ensured communism's collapse.

It is truly a sign of Saverin's depravity that rather than pay 1.7% of his windfall to support the free society that made such a windfall possible, he runs to an island that likely would give him neither freedom nor protection absent America's prior successes. So, go ahead and use him as a poster child for any sort of libertarian rant you want, but to me he will always be a coward, unwilling to stay and fight for the economic and political freedoms the rest of us are staying in America to protect.

[aaron]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

He is not getting all the billions now, that is why it is a small tax (1.7%) . The rub is that he may not need to pay taxes on future sales. In other words, he is doing exactly what corporations are allowed to do to avoid taxes; he is off-shoring his headquarters to Singapore. He needs a better lawyer and PR. He would not need to renounce his citizenship to just to get out of paying taxes. That is silly. Taxes are for the little people.

That leads me to believe this is all a bunch of nonsense so they can pass more legislation to enslave us.

If I were in his position, I might leave too. This is not the America I signed up for! I was taught about freedom and justice and right and wrong. The U.S. has strayed very far from those ideals. There ARE other countries besides this one. In Singapore, perhaps the guy just feels free and safe.

[goodrich4bk]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Aaron, the U.S. taxes all citizens' earnings, wherever made. So, yes, if he wants to avoid paying U.S. income tax on investment income from his $3.84 billion of assets, he needed to give up his citizenship. In short, he voluntarily gave up his citizenship for money, pure and simple. Regardless of what one thinks of our tax laws, I don't see how any American would want to see such a person return, do you?

I also think you're romanticizing an act of simple greed. No person with $3.84 billion needs to go anywhere to feel free and safe. And are you seriously claiming that billionaires in this country do not feel free and safe? What are you talking about --- really, that is a sincere question and not intended to be rhetorical. I am 56 and although I am not yet wealthy enough to retire, I feel completely free and safe here in California.

In any event, what are you doing to bring America back to the ideals that you "signed up for"? What are those ideals and how have we strayed from them? While there is certainly much that could be changed in this country, I don't think I'd ever leave it without doing everything possible to change it. What did Saverin do?

No, I think Saverin's departure is a window into nothing more than the emptiness of one man's soul.

[aaron]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Aaron, the U.S. taxes all citizens' earnings, wherever made. So, yes, if he wants to avoid paying U.S. income tax on investment income from his $3.84 billion of assets, he needed to give up his citizenship. In short, he voluntarily gave up his citizenship for money, pure and simple. Regardless of what one thinks of our tax laws, I don't see how any American would want to see such a person return, do you?

I also think you're romanticizing an act of simple greed. No person with $3.84 billion needs to go anywhere to feel free and safe. And are you seriously claiming that billionaires in this country do not feel free and safe? What are you talking about --- really, that is a sincere question and not intended to be rhetorical. I am 56 and although I am not yet wealthy enough to retire, I feel completely free and safe here in California.

In any event, what are you doing to bring America back to the ideals that you "signed up for"? What are those ideals and how have we strayed from them? While there is certainly much that could be changed in this country, I don't think I'd ever leave it without doing everything possible to change it. What did Saverin do?

No, I think Saverin's departure is a Window into nothing more than the emptiness of one man's soul.

I thought there was a 30% "exit tax" in place and he has to pay it regardless. If that is not the case, it should probably be put into law. Of course you cannot build a fortune, switch your citizenship, and get out of paying your taxes. That is only for corporations to do.

There are plenty of ways to avoid paying taxes. His lawyers (he could afford the best) could get that taken care of easily. Hell, some of the biggest "American" corporations are based out of the Caribbean.

That is why I think there is a lot more to this bruhaha than what a couple of Senators (or whoever) are promoting in the media. Regardless, it does not make sense to me. In America laws do not matter at their level, so it is difficult to gauge the accuracy of any story like this.

I am afraid of the good Senators' bill. They think $2 million is a vast fortune. You cannot retire on $2 million with any kind of security. They are effectively locking you into this country for the rest of your life ($2 million will be worth $500,000 over the next 20 years with inflation). It is very convenient that the media is spinning this up and getting everybody's emotions boiling, and then They suddenly have a new bill all ready to go. It makes me want to get out of here while they still allow it.

I recommend these threads from user xPat:

http://www.itulip.com/forums/showthr...295#post212295

And the following thread:

http://www.itulip.com/forums/showthr...376#post221376

[DSpencer]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

It's amazing to see the difference in opinion on this issue. It's frightening to see the way that many on here view other people's money.

Consider:

1. Saverin was born in Brazil and has lived in Singapore since 2009 according to wikipedia. So I don't understand these comments that imply he should have some kind of undying loyalty to the US and try to "fix it".

2. 80% of Facebook users are outside the US. It's not like he got rich selling American flags at the 9/11 memorial or something.

3. More than likely, this guy will pay more taxes to the US government in the 18 or so years he spent in the US than every person in this thread will pay for the rest of their lives combined. Yet he is somehow a leech on the system who needs to be crushed and punished while they are true patriots saving America.

4. My admittedly limited understanding of the situation is that he will "save" money on taxes if in fact the shares sell at the price that people expect. Is this guaranteed? If Facebook gets hacked and the shares plummet, will everyone come rushing forward to plea that Saverin should get a tax refund? Am I missing something about how this works?

5. The US tax code is absolutely horrible and I don't see how anyone can deny this. Now they want to make it even crazier or more complex? Insanity.

6. He should be barred from ever returning? Why? Should we also prohibit tourism because they don't pay US income taxes?

7. Given the chance, if someone offered you $67,000,000 to give up your US citizenship and move to anywhere in the world....would you really turn that down?

8. Please don't forget my fellow Americans, that when you buy something online and don't get charged sales tax - You need need to keep records and pay the tax yourself! You wouldn't want to rip off the government like a greedy traitor! But I'm sure that everyone already does that...

[c1ue]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

I thought there was a 30% "exit tax" in place and he has to pay it regardless.

The tax only applies if your assets are over a certain level ($2M?). The question really is what the valuation of Saverin's Facebook stake was worth in September 2011 vs. now - it certainly wasn't worth zero.

As for the Senators - populist pandering in the finest historical style. Yet another indicator of the worthlessness of many members of the political establishment.

I'd be less surprised if these morons were trying to get a backdoor payoff from Saverin in return for 'dropping' the bill.

[A Dub]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Its interesting to see the polarized opinions being posted here, which parallel our society’s Republican vs Democrat political polarization. I’m curious to hear the perspectives of those who believe Eduardo Saverin is a selfish, greedy parasite with respect to the following:

1. Do you believe that people should be free to renounce their citizenship and be relieved of all the privileges and responsibilities that come with that citizenship? Or do you believe that a Government should have the power to attach citizenship and the obligations of citizenship against your will?
2. What makes you so sure that Saverin renounced his citizenship in order to lower his future tax bill, rather than for other reasons?
3. Saverin had to pay U.S. capital gains taxes on the fair value of his Facebook stock at the time he relinquished his citizenship. Bloomberg estimates his gain to be $2.4B and his tax liability to be $365M. Why does that not qualify as “paying his fair share”?

Thanks for sharing

[goodrich4bk]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

"It's amazing to see the difference in opinion on this issue. It's frightening to see the way that many on here view other people's money."

Are you referring to the way Saverin views the taxes he would pay if he was a U.S. Citizen today? Nobody here, myself included, said anything about "his" money. I and others here are talking about the 1.7% --- the $67,000,000. Had he kept his citizenship, that money would not be his, it would be paid to the government as taxes. When he gave up his citizenship to avoid those taxes, you and I, along with every other American, became obligated to pay the $67,000,000 instead. Or did I miss something and Congress passed some special law the "paid for" his departure by reducing a government program by $67 million?

1. You appear to have missed the part in Saverin's life when, as the son of a wealthy Brazilian family (who was allegedly the target of kidnapping threats), he vaulted to the head of the line and was granted not only residency but also U.S. citizenship because he feared for his life. If you don't understand why some Americans would expect him to have some loyalty to the U.S. under such circumstances, that's a serious problem you have.

2. So a foreigner who comes to the U.S., takes advantage of our economic freedoms and then leaves is okay so long as he sells his product/services to other foreigners? My point was that the U.S. and the West are the wellspring of economic freedom and that wellspring was created by generations of people who actively participated in and transformed their societies into what they are today. NONE of what you and I enjoy in this country today was created by people who departed to an island with their wealth. Although Saverin is entitled to every penny he made (and please note I did not engage in any of the snarky commentary about how he made or whether it was deserved) he is no hero, no role model and certainly not welcomed to return.

3. Again, you will notice I did not address the tax system in general or whether he had paid his "fair share". I did not call him a "leech" or ask that he be "crushed and punished". In fact, I don't even know where you get such notions from what I have written. If he had stayed, I would consider him an upstanding citizen deserving of the same presumptions of loyalty and good faith that I afford every American citizen. My comments were directed at those who are using him as a poster child for libertarian ideals --- a notion I find deeply disturbing for the reasons stated. I limited my comments to his particular circumstances and admitted reason for renouncing his citizenship. I think that speaks volumes about the man and his appreciation --- or lack thereof --- of the society that took him in when he needed us. That you choose to defend his behavior is similarly illuminating.

4. I am not a tax expert but what I have read is that he owes no taxes until the shares are sold. His departure was to avoid paying taxes on the "earnings of a U.S. citizen" which are subject to tax wherever those earnings are made.

5. Did I say anything about the U.S. tax code? In any event, why are you fretting about a change in the tax code that will only affect Americans who are giving up their citizenship to avoid taxes?

6. See my comments above. The distinction is simple; tourists are tourists, ingrates are not welcomed.

7. Again, I addressed this. I would never give up my citizenship for 1.7%, 10% or even 25% of my wealth. I love this country and it is the home of my ancestors. I intend to participate in the democratic traditions that made my own success possible so my children can succeed, too. I guess you answer that question differently than do I.

8. Who has called Saverin a traitor? Who has said he shouldn't be able to leave? Really, you need to ask yourself why you keep assuming that Saverin's critics are making arguments they are not making. He is simply an ingrate, somebody who has no sense of what created the very community he exploited. As my post mentioned, all you need to do is look at the life of Steve Jobs, Mark Cuban or any number of great American entrepreneurs to see what others have freely done with their fame and fortune. And, no, they should not be expected to do any of the things they did. But Saverin is in a league of his own making and if you cannot see that then you have a very shrunken notion of what constitutes a civilized society.

[touchring]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Having made all of his money exploiting his fellow citizens' desire for social connectivity, he flees to an island to avoid a 1.74% tax.

You must see that while Saverin is a nobody in California, he is a great celebrity on this "island" where 99% of hundred millionaires and billionaires made their money through political connections, money laundering, real estate speculation rather than through innovation.

With the celebrity status, comes the privilege of free beautiful Asian women of all ethnicity.

[goodrich4bk]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

A Dub, I don't think you read my posts carefully. Also, I saw no references to Democrats or Republicans in any of the posts above. For the record, I am a thoughtful libertarian who voted Ron Paul in the 2008 primary, Obama in the 2008 general election and who has not yet decided who he will vote for in 2012. But here are my answers:

1. Saverin is free to leave and no government should have the power to attach the obligations of citizens against an individual's will.

2. What other reasons would he have? Why else would he have done it? America allows duel citizenship, so he did not need to give up American citizenship to gain citizenship in Singapore. But I have another question: why are you going out of your way to explain his behavior?

3. Again, I could give a rat's ass about whether he has paid or is paying his "fair share". You missed my point. My point is that today he values his American citizenship at 1.7% of his net worth. I suspect that at the time he pleaded for it to save his life, it was worth a lot more than that to him and his family. He is an ingrate. Again, for emphasis, an INGRATE. What part of that do you not understand?

And, no, he doesn't need to pay any capital gains taxes until the stock is sold. In the meantime, he can pledge the stock as loan collateral and invest the loan proceeds without paying any U.S. taxes on the resulting income. Also, any future gains in the stock will not be subject to U.S. tax. These are the existing tax rules and he is fully entitled to exploit them.

If you want to see more Saverins who come to this country for its economic freedom and then leave when they feel they have extracted the maximum benefits of citizenship, by all means continue to praise the Saverins of the world as if they are John Galt. You will notice, however, that real Americans stand their ground and stand up for what they believe in. Saverin is just an opportunist, and to him I say good riddance.

[goodrich4bk]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Yes, that is exactly the person I see. He is the opposite of a Ron Paul, Steve Jobs or Mark Cuban. He is a man without a home, a man without a soul. He will not be missed.

[DSpencer]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

goodrich4bk,

I didn't mean to imply that these were all points made by you or even necessarily in this thread. I've read a lot of different sources and comments on the issue because I find it interesting. While I do disagree with your position, if I somehow implied a position that you don't hold, my apologies.

Yes I refer to the $67MM as his money, because it is his money and the fact that in some alternate reality he might have paid it in taxes does not make it not his money. Would he be screwing us if he thought about buying a billion dollar boat and then changed his mind because now the government can't collect sales tax? Will our taxes increase if FB shares drop to $30/share due to lost capital gains revenue? Or best of all: will our taxes go down if Saverin says "hey government, here's $100MM and keep the change"? I'm going to guess: not a chance in hell.

I do see where you are coming from regarding the fact that Saverin came to the US for protection and received it. Maybe he should be forever grateful for that. But keep in mind, he came to America when he was like 11 years old, he didn't exactly have a choice. And why was he vaulted to the head of the line and granted citizenship? Because America protects anyone in danger of kidnapping? Or because his family was wealthy and Uncle Sam wanted a piece of it? Which I think is fine by the way, but the point is it wasn't likely done out of pure charity.

What I don't understand is the idea that he has somehow "exploited" the US. Ignoring the details, he helped create a company that has employed many people and generated huge amounts of tax revenue for the US while creating a product that many people love. Where/when did our community get exploited?

Many people, including myself, see the legislative angle of this as proof of our fears being realized. First they make it hard/expensive to leave, then they make it unpleasant to stay.

[c1ue]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

I am not a tax expert but what I have read is that he owes no taxes until the shares are sold. His departure was to avoid paying taxes on the "earnings of a U.S. citizen" which are subject to tax wherever those earnings are made.

Renouncing your citizenship means an instant tax payment - at current market prices.

While I am no expert either, my understanding is that if you own a house worth $1.5 million, even if you originally paid $50K, you own taxes on the current market value of $1.5 million. This is a 'mark to market' valuation, not the normal tax basis valuation which is commonly employed in other circumstances.

Thus in my mind while it is very possible that Saverin's tax bill on his then current Facebook holdings might be smaller than it is now (post IPO), at the same time it should not be zero. Unless of course some other machinations are already at play (for example his Facebook ownership is actually owned by a trust or corporation which he controls).

I also note that there were some exceptions in the original HEART act - in particular one in which someone who holds dual citizenship but only resided in the US for 10 of the previous 15 years - in this case no exit tax is paid.

It might well be this specific loophole which is what is happening and nothing to do with Facebook pre-IPO shares.

[dcarrigg]

Re: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

I am a thoughtful libertarian

Indeed you are. These days I find it harder and harder to find a libertarian who doesn't take the hard line that 'all taxation is theft.' I'm glad to see it.

For I have been fearing that libertarianism had become a monolithic, dogmatic, anti-pragmatist orthodoxy of fools, like the Communists who came before them.

For those of you calling Singapore freedom, I think you sorely mistake the meaning of the word.

Sure it's a Milton Friedman / Chicago School paradise like Pinochet's Chile before it. So it will not have capital gains taxes or estate taxes, and there will be a toll on every road to keep them private. And there'll be a fast lane highway to keep the riff-raff out for rich folks who can pay the higher toll.

This comes at the expense of living in a country where you can only vote for one party, the one that has ruled non-stop since independence. And where one man, Lee Kuan Yew, has ruled with an iron fist since independence. 30 years as Prime Minister, and many years beyond. Sterilization after two children. Life imprisonment for minor drug offenses with daily corporal punishment in the form of caning. Boundless political corruption.

Mubarak had nothing on this guy.