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

[goodrich4bk]

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

dcarrigg, thanks for the post. I was unaware of those Singaporean "traditions".

I can see from some of the posts here that the Saverin story, like the Travon Martin case, stirs up many more issues than the mere subject of taxing ex-pats on their way out the door. To those who defend his tax-avoiding actions in the name of individual liberty, here is my response to Joel Bowman's piece yesterday in the Daily Reckoning. As you can see, Mr. Bowman's fawning over Saverin (the title of his piece was "Run, Saverin, Run!) in the name of libertarian purity was just a little too much for me to bear when he concluded that "all taxes are theft". Here is my take on that particularly ludicrous notion:

Joel:

I'm as much a free market fan as you claim to be, but I view the Saverin story a little differently than apparently you do.

I see a man who would have produced nothing in his home country of Brazil. Indeed, by his own admission when he applied for U.S. citizenship, he was high on a list of rich kids targeted for kidnapping and was not expected to survive in one piece if we did not grant his request.

Somehow, and far ahead of a list of good people wanting to be America's next entrepreneur, he was granted not only American citizenship but also admission to Harvard, where he met many bright and like-minded sons and daughters of America's richest and most privileged families. When an opportunity to invest came along, his family wealth allowed him to purchase a ground floor interest in Facebook that, through the hard work, dedication and bright ideas of many other young Americans, made him a billionaire.

By our nation's rules, every penny of that is rightfully Saverin's. By the same token, though, and by those same rules, every penny of that gain is taxable. Saverin wants to play for the former rules and ignore the latter.

Rules are rules, Joel, and you don't get to pick and choose which ones you follow and which ones you don't. Advocate all you want to change the rules, but until those rules change, Saverin's gains are not yours or mine to claim and the taxes on those gains are not theft.

Yes, I highlight that because it is one of your favorite --- and most outrageous -- sayings. Don't you see what folly you invite when make such a statement? Don't you see that when you call tax laws "theft", then others will call Saverin's earnings their own? Don't you see that when you cannonize a common ingrate like Saverin just to make a rhetorical point, you invite the Robin Hood fans to start looking for a hero of their own?

I have noticed you often lament about the "decline" of America. As your youthful photo suggests that neither you nor your father were actively involved in WWII or its immediate aftermath, perhaps you might learn a little from examining more closely that earlier America you long for. This was an America inhabited by our "Greatest Generation", men and women who had every justification for lowering their taxes immediately after VE day in 1946. After all, if they saved the free world, who would have blamed them if they had done just that? But they didn't. In fact, they did the opposite. They raised the marginal tax rate to 91% so that their war debts --- the debts paid in money, rather than in blood --- would not be passed on to their children. Within a decade, they accomplished that mission, setting the stage for their children --- the Boomers --- to prosper like no other previous generation had prospered in the history of the world.

You see, Joel, that Greatest Generation did not view taxes as theft. They had witnessed hell on earth, and viewed those taxes as an entirely reasonable cost of ensuring a much better world for their children. Nor were these 91% tax rates (as opposed to the 20% that so frightens your and Saverin) imposed by "liberals" or Democrats. They were imposed during a Republican administration and approved by President Eisenhower -- the same Eisenhower who encourage Americans not to run from taxes, but to actively participate in our democracy to ensure those precious revenues were not wasted.

Today, you devoted your considerable talent to praising another kind of man altogether. A man who made billions of dollars exploiting the basic human need for community and then ran away to an island so he could be left all alone. If that is the legacy you wish to leave your children, so be it. But just who do you think will be left in America to pay the bills of civilization that you are encouraging --- nay, cheering ---Saverin and others to run from? Who will be left to stand in the public square to rail against the coming tide of anger that the fleeing Saverins of the world have unleashed? I am certain you won't be, but I and my children will --- and we will never forgive you and other cowards for having incited, instead of reasoned with, the vast majority of Americans who are decent, hard working men and women not at all looking for handouts or a piece of Saverin's wealth. They are simply shocked that a man so fortunate to have lived here would not choose to stay and participate in the community he so richly exploited.

From your writings, Joel, I know you feel that America is a sinking ship. I do not at all agree. At last count, we have hundreds if not thousands of Steven Jobs and Mark Cubans. But even if your worst fears come true, Saverin is no better than the wealthy cads who jumped off the Titanic onto the last lifeboats ahead of women, children and the less socially connected ---and then claimed hero status when they landed safely ashore. And you are nothing but a mouthpiece for such men.

Next time, try finding some real heroes in America to write about. There are millions of us if you just look around.

[lektrode]

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

dcarrigg, thanks for the post. I was unaware of those Singaporean "traditions".
.....
.... They are simply shocked that a man so fortunate to have lived here would not choose to stay and participate in the community he so richly exploited.

From your writings, Joel, I know you feel that America is a sinking ship. I do not at all agree. At last count, we have hundreds if not thousands of Steven Jobs and Mark Cubans. But even if your worst fears come true, Saverin is no better than the wealthy cads who jumped off the Titanic onto the last lifeboats ahead of women, children and the less socially connected ---and then claimed hero status when they landed safely ashore. And you are nothing but a mouthpiece for such men.
...

+1
ever so sincerely
another son of a ww2 vet

[A Dub]

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

Thanks for the color on your view goodrich4bk. The polarization analogy to Republicans vs Democrats is my own. My observation is that people posting online about this story tend to either have a rather hostile view towards Saverin or a rather hostile view towards those who are criticising him, which I believe parallels the polarization and hostility of the political debate these days.

There are other reasons he may have renounced his citizenship, to speculate on a few:
* Singapore does not allow you to naturalize unless you renounce your existing citizenship
* FATCA goes into effect in 2013 and foreign financial institutions are turning away American customers as a result. Since this guy is wealthy, retaining US citizenship will stifle his ability to manage his investments.
* Not wanting the administrative burden of having to file US tax returns for the rest of his life if he has no intention of returning here.

Its entirely possible that he renounced his citizenship in order to avoid any future US tax liability. If you're a billionaire would you really give up US citizenship to save, as you say, 1.7% of your net worth? I suspect most US billionaires would pay up.

You asked why I'm going out of my way to explain his behavior. I'm not trying to do that, nor am I praising him, it just interests me why his decision enrages people.

Ordinarily you don't pay cap gains tax until you sell the underlying security, but when you renounce citizenship you must pay an "exit tax" even if you don't sell the shares. He does have to hand over the $365M.

[goodrich4bk]

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

Apologies accepted. Also, I did not intend to use the term "exploited" pejoritively. Rather, I used it with this meaning: to utilize, especially for profit, as in "to exploit a business opportunity".

But you raise a good point. Did Saverin exploit our community in the pejoritive sense, i.e., did he profit from taking unfair advantage of others with less knowledge, power or bargaining position?

I am even less an expert on Facebook than I am on taxes, so forgive me if I misunderstand its business model. As I understand it, people use its interface to post information that may be of interest to their chosen circle of friends. The information can be text, links, photos --- just about anything digital. The interface allows this information to be shared simultaneously among the group and, at the same time, is reviewable by any single member of the group at their leisure.

As far as that goes, it's not much of a business model. The company gives away the interface and maintains its massive database for free. So where did Facebook get the revenue that allowed the IPO to sell at $38 a share today, making Saverin a billionaire?

From advertising, that's where. Over 85% of Facebook's revenue is from advertising. And advertising gets its money from people who buy goods and services advertisers are selling. No markets for goods and services, no advertising, no money for Saverin.

Now here comes the "exploit" part. Did Saverin invent a new kind of advertising? No. Did he invent a type of advertising that was more effective? No. Neither Saverin nor Facebook created anything new. Instead, they took an existing idea --- My Space and Friendster ---and modeled it to exploit an unsuspecting community of young, computer-connected people for personal profit. Instead of paying writers and photographers to publish a glossy magazine, instead of hiring reports to investigate and write about important issues, instead of constructing billboards or producing expensive television shows --- Facebook took the free labor of volunteer gossips to deliver a huge number of eyeballs to its advertisers. And then those advertisers paid Facebook, not the free workers --- for the value that those workers' content.

I call that exploitive. What do you call it?

You may not think its exploitive because there is no harm, only private gain. If so, you are mistaken. When advertisers use Facebook instead of my local newspaper, my local television show or my local magazine, scores of middle class workers in my neighborhood are laid off. Many of them become my clients (I am a bankruptcy attorney). In my 28 years of practice, more than a few of these kinds of workers have fared much worse. The loss of a middle class income has forced their children from their homes, divorces often follow and a generation is left in poverty. This is not debatable; indeed, Schumpter coined a phrase for it: "creative destruction".

I am not suggesting that such destruction is a bad thing. To thrive and provide a general benefit to all who live and work in a capitalist system, the system must routinely be nourished by failure --- failure which reallocates scarce capital to more productive uses. Nor am I suggesting that Saverin did anything wrong by seizing this opportunity and making a massive fortune from it. Rather, I am revealing how shallow is the claim that he "earned" his fortune through the volunteer actions of others. For those who have lost their jobs as a result of any innovation, there is nothing voluntary about it.

[jk]

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

here's how it's done, guys:
Google 2.4% Rate Shows How $60 Billion Lost To Tax Loopholes

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.


all saverin had to do was place his holdings in some kind of trust, perhaps assign some intellectual property rights to a shell corporation set up in a foreign jurisdiction to which he would have to pay the greater portion of gains on stock holdings so as to have offsetting deductible expenses, etc. i don't really know how these things work, this is just a bunch of jargon i've picked up along the way. but someone of saverin's wealth has access to the most sophisticated and most devious tax lawyers in the world. renouncing citizenship is simple and obvious and so not good p.r. there are plenty of ways to remain a u.s. citizen and not pay much tax. as someone said earlier, taxes are for us little people.

[dcarrigg]

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

You asked why I'm going out of my way to explain his behavior. I'm not trying to do that, nor am I praising him, it just interests me why his decision enrages people.

[dcarrigg]

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

here's how it's done, guys:
Google 2.4% Rate Shows How $60 Billion Lost To Tax Loopholes

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.


all saverin had to do was place his holdings in some kind of trust, perhaps assign some intellectual property rights to a shell corporation set up in a foreign jurisdiction to which he would have to pay the greater portion of gains on stock holdings so as to have offsetting deductible expenses, etc. i don't really know how these things work, this is just a bunch of jargon i've picked up along the way. but someone of saverin's wealth has access to the most sophisticated and most devious tax lawyers in the world. renouncing citizenship is simple and obvious and so not good p.r. there are plenty of ways to remain a u.s. citizen and not pay much tax. as someone said earlier, taxes are for us little people.

And so? Because it's legal everyone should shut up and take it?

Anyone watching ESPN can see Curt Schilling doing a similar stupid move.

He got $75 out of the former Rep. Gov. of RI by supporting him. Now he's insolvent and the press is all over it.

If he would have instead taken the following ten step plan:

1) Incorporate 'Bloody Sock Capital LLC'
2) Capitalize with small but credible amount of money ($4M - the amount he capitalized 38 Studios with)
3) Purchase a portfolio of well known but not public tech shares where possible (foursquare - hulu [Providence Equity Partners])
4) Set up meeting with retirement board (pension fund)
5) Use your connection to RI's governor to push for investment in your VC fund
6) Show glitzy powerpoint of overly optimistic expected future returns
7) Obtain $100M investment
8) Push $75M to 38 Studios and spread the rest around the tech world
9) Do some 'mark to model' accounting that shows 38 studios to be very profitable
10) Show expected paper returns and keep investment.

He wins. No press is around because it is too complicated. Let's face it, it's not worth robbing the taxpayers unless you're a bank or a fund any longer. It doesn't mean that you're morally or ethically right, though.

Saverin made a dumb move.

It doesn't mean us "little people" should take it lying down.

So what if Fryer Tuck could have been tax exempt from the Sheriff of Nottingham?

Robin Hood was still the Hero.

[flintlock]

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

Too bad they don't go after the banksters with the same alacrity.

Exactly! At least this guy created something for the money he EARNED.

[flintlock]

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.

I agree Saverin and others like him should pay their taxes. But surely you don't believe it was the people in that 91% bracket that paid off the lion's share of the WWII debt? We can have all kinds of hypothetical tax rates but its meaningless if we don't shut down the loopholes. People always will find a way around punitive rates like that.

People like Saverin are all about money. What else would you expect? It's a rare bird who reaches that level of wealth and still thinks about silly things like gratitude to country, freedom, civil rights, protection. Wealthy people can buy those things to some degree. Welcome to the new world order. Every man for himself. This is what happens when we seek out a "world without borders". We will ultimately end up with a "Locust" mentality where billionaires hop from one hot spot to the next, using the advantages of the host nation while it suits them, then moving on when the bill comes due. I don't really know how you put the genie back into the bottle at this point. There will always be a host nation waiting to accept there wealth with open arms. As far as taxes, the low bidder wins. I suppose the answer may lie with a complete change in how we tax. Instead of income tax a consumption tax for example. I've never liked the idea of taxing production anyway.

"Greed" is one of those words impossible to define but I think most of us know it exists to some degree. However, there can be no true economic freedom while using the term in a legal sense. At what point do I get to judge someone else's use of money? I may think my neighbor is a greedy bastard because he buys a new car instead of shoes for his children. My customer may thing I'm greedy because I could charge him less and still pay my bills. For all we know, Severin wants to use the savings to fund an orphanage in his native country. He may feel, like I do, that most tax money being paid today is going into an inefficient grinder that wastes more than half of what it takes in. So I shy away from using the term myself.

[flintlock]

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...

Yes, I'm also a little surprised sometimes at all the Pro-tax mentality. Whatever happened to the good old days when tax collectors were tarred and feathered, and people rightly resisted their own servitude to the state?Its almost as if there is a lack of loyalty to one's own people vs to the state.

It mostly boils down to whether or not you believe the state owns the rights to you and your production . We all know we need to pay taxes to make things function smoothly. Nobody is advocating zero tax. The question is will the state ever think they have enough! In general, they never do until people push back. Tax heavy economies do not flourish. So think of tax resisters as providing a much needed service in keeping the country competitive. If we all lay down like lambs to the slaughter, we'll eventually end up with a 100% tax and we'll all be in the crapper. Except the rich who can simply afford to move to a country with lower taxes. You are not going to punish the rich very long with high taxes and get away with it. You end up punishing the poor actually.

The real problem is not about tax loopholes but in the system itself. Find a better way to tax and you won't have special interests receiving special tax consideration and billionaires changing countries every few years. It would cut out half the corruption in congress and very possibly result in a renewed interest in America as a place to do business. Of course congress will never go for a change, because it cuts them out of the loop.


Cut out the loopholes, force people to pay if they want to play in US markets, but for God's sake don't lose sight of the big picture.

[flintlock]

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.

I have always found the concept that potential tax revenues are property of the government repulsive. It implies a state of slavery exists. Its now in vogue for some to refer to a tax cut as if it was a present from the state to the individual or company in question. All this does is imply the state actually owns the means of production and are kind enough to let you keep a bit for yourself. I'm still waiting to hear all the collectivist nation success stories. How's it worked out historically? What, Europe? Ha. Only possible in recent history because the US spent trillions on defense that allowed these Socialist states to spend their money on social projects instead of tanks and airplanes. And I suspect we will see that coming to and end very shortly.

Its a spending problem folks, not a revenue one. Wake up. We can't afford our current standard of living. At least not most of us. All we can hope to do is make our economic environment more conducive to providing good jobs, so people have a chance at providing for themselves. High taxes on business will only force the jobs away. Tax individuals, not businesses if you want to see results.

[goodrich4bk]

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

I agree we have a spending problem, not a revenue problem. This is precisely why I support Schumer's efforts, if not the details of his particular bill. Here's why.

You write: "The real problem is not about tax loopholes but in the system itself." I believe the loopholes make the system unfixable. If the uber-rich are paying 15% or less of their income to maintain the society in which they earn their fortunes, why do you think they would want to lower taxes further? They aren't stupid. They absolutely understand that it takes at least a 15% charge on productivity to keep a complex system such as our modern civilization humming. Many of them are paying much less than that right now --- such as the wealthy living on muni bonds --- so why would they have any interest in another "system"? Unless and until you raise their taxes, the very people who own our government will prevent all changes to the tax "system" that favors them. No pain, no gain.

[jk]

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

And so? Because it's legal everyone should shut up and take it?

Anyone watching ESPN can see Curt Schilling doing a similar stupid move.

He got $75 out of the former Rep. Gov. of RI by supporting him. Now he's insolvent and the press is all over it.

If he would have instead taken the following ten step plan:

1) Incorporate 'Bloody Sock Capital LLC'
2) Capitalize with small but credible amount of money ($4M - the amount he capitalized 38 Studios with)
3) Purchase a portfolio of well known but not public tech shares where possible (foursquare - hulu [Providence Equity Partners])
4) Set up meeting with retirement board (pension fund)
5) Use your connection to RI's governor to push for investment in your VC fund
6) Show glitzy powerpoint of overly optimistic expected future returns
7) Obtain $100M investment
8) Push $75M to 38 Studios and spread the rest around the tech world
9) Do some 'mark to model' accounting that shows 38 studios to be very profitable
10) Show expected paper returns and keep investment.

He wins. No press is around because it is too complicated. Let's face it, it's not worth robbing the taxpayers unless you're a bank or a fund any longer. It doesn't mean that you're morally or ethically right, though.

Saverin made a dumb move.

It doesn't mean us "little people" should take it lying down.

So what if Fryer Tuck could have been tax exempt from the Sheriff of Nottingham?

Robin Hood was still the Hero.

my point was not that it's ok because everyone does it. my point was that everyone [with big money] does it, and so the whole system needs to be examined, and it's a distraction to focus on this one individual and his spectacularly public and understandable way of avoiding taxes.

[c1ue]

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

Its a spending problem folks, not a revenue one.

This isn't quite correct in my view. We have a financialization problem, which is causing the spending problem. So long as we have too much financialization, we're not going to ever get enough revenue because of the miracle of compound interest.

Let me put this another way: what would happen to the US economy if 1/2 of all mortgage debt as well as home prices were magically cut in half?

[touchring]

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

This isn't quite correct in my view. We have a financialization problem, which is causing the spending problem. So long as we have too much financialization, we're not going to ever get enough revenue because of the miracle of compound interest.

Let me put this another way: what would happen to the US economy if 1/2 of all mortgage debt as well as home prices were magically cut in half?

Home prices in the US is already very cheap as compared to the rest of the world.