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Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 2:44 pm

Quote:
Facebook co-founder Eduardo Saverin has come under increased scrutiny following news that he had renounced his U.S. citizenship to become a resident of Singapore.

The move drew criticism as reports pointed out that the move would save Saverin — who owns a part of Facebook — millions of dollars in taxes after the company goes public.

Saverin has denied that he is moving for tax purposes, and has said that his decision was based solely on his business investments.

On Thursday, Sens. Charles Schumer (D-N.Y.) and Bob Casey (D-Pa.) announced plans to introduce a bill to respond to Saverin’s move, which a news release from Schumer’s office called an “avoidance scheme.”

“The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country,” the release said, adding that the legislation would bar individuals like Saverin from re-entering the country.
http://www.washingtonpost.com/busine...p/2012/05/17/gIQAPFCyVU_story.html


A more accurate name for the bill they proposed would be the "Shackling of Americans Act". A virtual Berlin Wall, indeed. . .

[Edited 2012-05-17 07:53:36]
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Tugger
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 3:34 pm

Quoting PPVRA (Thread starter):
“The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country,” the release said, adding that the legislation would bar individuals like Saverin from re-entering the country.

What a load of horse$h!t! Why on earth are they making a big deal about this one thing? The tax code does have to be rewritten but this is just pandering and stupid. Even if it is solely for tax reasons why is it anything to be bothered about? Corporations do things like this (move ops offshore, shift money through foreign locations) all the time just to avoid taxes, there have been a few articles recently (one by the NYT on Apple's maneuvers) about what is done to avoid taxes and it is amazing.

If they want to go after something then go after those types of operations. But of course there will be HUGE lobbying and corporate money money thrown at Congress to leave things as they are and in fact if anything changes it will probably just benefit the corporations. Here this is just one guy so that probably explains it.

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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 4:23 pm

I laughed when I read this. I'm just waiting for the Democrats to march into Congress with this proposed bill wearing t-shirts saying "Death To Capitalism!"

This a knee-jerk patriot move that makes absolutely zero business sense. By imposing expat taxes and barring re-entry to the country, they're not only alienating the people holding the wealth, but are essentially signing away any potential future investment! Just because someone denounces their citizenship and runs with their American-made dollars, it doesn't mean that there won't be any future inflow of cash back to the US via foreign investment, partnerships, etc. If anything, this is going to encourage promising new ventures (or entrepreneurs with big ideas) to take their potential out of the country before registering it as an American entity (this is becoming the norm for corporations).

Saverin is clearly lying through his teeth about his real motives behind changing citizenships, but I'm not sure why. There's no way that bill is going to vote before the Facebook IPO. If I were him, I'd be getting on that SQ flight with my suitcase of cash and my middle finger in the air.

Quoting PPVRA (Thread starter):
A more accurate name for the bill they proposed would be the "Shackling of Americans Act". A virtual Berlin Wall, indeed. . .

  
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 4:50 pm

I don't know about the bill but I find Saverin despicable. He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship. All to avoid paying taxes in the country that made him rich.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 5:11 pm

Quoting mham001 (Reply 3):
All to avoid paying taxes in the country that made him rich.

Everyone that can, does this to some extent. As they say, never pay taxes unless you absolutely have to. I pay my taxes but I use every tool offered to minimize them to what is absolutely required (doesn't mean I don't support returning tax rates to where they were ten years ago though).

Whether noble or ignoble, Eduardo Saverin is doing what he feels is best for him and is within the law and his rights to do. And I am OK with that.

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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 5:19 pm

Quoting mham001 (Reply 3):
I don't know about the bill but I find Saverin despicable. He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship.

Why should you care if he goes, he wasn't even an American to begin with, the guy is Brazilian by birth, he didn't use any US resource's to make his fortune, without his personal fortune Facebook might not have existed. BTW he's also been living in Singapore since 2009.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 5:43 pm

Quoting PPVRA (Thread starter):
Fbook Cofounder Drops Citizenship, Angers Senators 

Funny as hell. They are more upset at him taking his money away with him than asking themselves what policies they came up with that drove him away.

Thousands of very wealthy (mostly retired) Americans have abandoned their US citizenship and taken off over the past few years thanks to the FATCA law (which was Sen Schumer's brainchild). Capital flight is a historic problem in countries who try to tax too much - never thought we'd see the day that the US would have that problem, but here we are.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 5:55 pm

Quoting mham001 (Reply 3):
I don't know about the bill but I find Saverin despicable. He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship. All to avoid paying taxes in the country that made him rich.

If you look at Facebook's history, and their current business model, you'll find that being American had very little to do with making him rich. Heck, the man who originally invested in Facebook, Peter Thiel, isn't even American, he's German.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 6:07 pm

Quoting PPVRA (Thread starter):
The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country,” the release said, adding that the legislation would bar individuals like Saverin from re-entering the country

This is total kneejerk. "We cannot allow the wealthy to rewrite their own rules"--well, every other American has the exact same right to do this. I dont see how this bill can be enforced unless you impose rules on various overseas banks and the like, the costs of which would be imposed on all other Americans.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 6:25 pm

Quoting PPVRA (Thread starter):
A more accurate name for the bill they proposed would be the "Shackling of Americans Act".

So you have no problem at all with tax dodging?

I'm not saying I agree with the Senators or not, just trying to get an understanding for where you stand.

[Edited 2012-05-17 11:25:34]
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 6:53 pm

Quoting D L X (Reply 9):
So you have no problem at all with tax dodging?

I'm not saying I agree with the Senators or not, just trying to get an understanding for where you stand.

I know you aren't asking me but I'll jump in because I don't understand your question.

By "dodging" are you implying it is something incorrect to do? Even though it is legal and well within his rights to do? Or are you not OK with the normal/legal things that everyone does to minimize their tax liability?

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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 8:32 pm

Quoting tugger (Reply 10):
By "dodging" are you implying it is something incorrect to do?

I think we can agree that it raises serious questions. Sub-prime lending was legal too. Didn't make it right.

It's also legal to move your money in off-shore accounts, but we both know the intent of doing so is so that you can hide the money and not share with IRS (as required) how much you've made off that off-shore account.

Quoting tugger (Reply 10):
By "dodging" are you implying it is something incorrect to do?

By "dodging" I mean that it is highly suspect that right before he's about to receive a major windfall, he denounces his citizenship and will therefore have a much smaller tax burden.

How many people do you know renouncing their citizenship? Doesn't that strike you as odd?

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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 8:37 pm

Quoting D L X (Reply 9):
So you have no problem at all with tax dodging?

If the money is earned in the US, by all means it should be taxed in the US.

By saying that he is bugging out to move to Singapore, that does not mean that he's not going to pay taxes on the sale of Facebook. If he earned it in the US he still has to pay taxes. Any investment bank which handles the IPO will find themselves in very hot water if they collect money for the shares and then wire those funds, no taxes paid, offshore. Nobody is disputing that

But once he has his millions (or billions), post-tax, he's going to spend them in Singapore, not in the US. That annoys people like Shumer, who seems to believe that US citizens should be chained in the country and not allowed to emigrate or to take their money out of the country. Oddly like the Soviet Union back in the day, but I'm sure he doesn't see the similarity.

Of course he would not have to give up his US citizenship if the US would respect tax territoriality like all other civilized nations.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 8:54 pm

Quoting Dreadnought (Reply 12):
But once he has his millions (or billions), post-tax, he's going to spend them in Singapore, not in the US.

If that's all that happens, I don't give half a crap what he does with the money. I mean, sheeeeet. I'm about to blow a bunch of American dollars in the EU in about a month on vacation.  

Well, I give half a crap, but only in a "Buy American" sense.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:11 pm

Quoting PPVRA (Thread starter):
The senators will call Saverin’s move an outrage

Why would that do that? The senators want to impose more taxes, Saverin doesn't want to pay taxes. So problem, solution, everybody wins.

Quoting WestJet747 (Reply 2):
Saverin is clearly lying through his teeth about his real motives behind changing citizenships, but I'm not sure why. There's no way that bill is going to vote before the Facebook IPO. If I were him, I'd be getting on that SQ flight with my suitcase of cash and my middle finger in the air.

Why should he say anything other than that he's trying to avoid taxes? It's not like they won't allow him to renounce his citizenship. Frankly, as far as I'm concerned, taxes are negotiable like anything else. If he can find a country to make him a citizen at a lower tax rate, good for him.

Quoting mham001 (Reply 3):
He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship. All to avoid paying taxes in the country that made him rich.

America did not make him rich. His ideas, work and innovation made him rich. I find the notion that the country can make you rich and that personal wealth is essentially a trust from the nation despicable.

Quoting us330 (Reply 8):
"We cannot allow the wealthy to rewrite their own rules"

That's easy: just don't let it happen. But if we write rules that dig our hands too deep in the cookie jar, people will do exactly what Saverin is doing.

Quoting D L X (Reply 9):
So you have no problem at all with tax dodging?

No. People should do whatever possible to minimize tax liability.

Quoting D L X (Reply 11):
I think we can agree that it raises serious questions.

Not really. Either you owe the tax and you have to pay it, or you don't. Do everything possible so you don't.

Quoting D L X (Reply 11):
By "dodging" I mean that it is highly suspect that right before he's about to receive a major windfall, he denounces his citizenship and will therefore have a much smaller tax burden.

It would be more suspect if he didn't.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:14 pm

Is this the same Eduardo Saverin portrayed in The Social Network by Andrew Garfield?
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:18 pm

I have no problem with the guy changing citizenship. But when he surrenders his passport he will be standing in line for visas like anyone else. I doubt, however, that that will bother him.

Considering the fact that a very large amount of money is involved my bet is that he will also be tagged at the IRS for audits on an annual basis for all US based income.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:18 pm

Quoting Dreadnought (Reply 12):
But once he has his millions (or billions), post-tax, he's going to spend them in Singapore, not in the US. That annoys people like Shumer

That is not the point of Schumer's bill.
Schumer's bill is concentrated squarely on the taxes due on money made in the US, which even Saverin has stated he will pay.

The real issue here is to go after folks that are leaving the US Citizenship soley for Tax Purposes.

Not that I particularly agree with the bill since corporations get to do it all the time, but don't make Schumer's bill into something it isn't.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:21 pm

Quoting Dreadnought (Reply 6):
Capital flight is a historic problem in countries who try to tax too much - never thought we'd see the day that the US would have that problem, but here we are.

Indeed. And with it, a lot of investments. And eventually a brain drain too.

Quoting D L X (Reply 9):
So you have no problem at all with tax dodging?

Avoidance strategies, no problem at all. Evasion - I would never recommend it to anybody.

Quoting D L X (Reply 11):
Sub-prime lending was legal too. Didn't make it right.

Borrowing to people or institutions with low or awful credit quality is something the government does massive amounts of as a matter of public policy.


Quoting D L X (Reply 11):
How many people do you know renouncing their citizenship? Doesn't that strike you as odd?

Few, but growing numbers:

http://intltax.typepad.com/.a/6a00e54fb13f518834016304ed09fe970d-pi

[Edited 2012-05-17 14:22:34]
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 9:44 pm

Quoting casinterest (Reply 17):
That is not the point of Schumer's bill.
Schumer's bill is concentrated squarely on the taxes due on money made in the US, which even Saverin has stated he will pay.

Schumer was one of the creators of FATCA, which was tailor-made to put in punitive taxes on "US Persons" (citizens, foreign spouses of citizens, anyone who ever got issued a SS number because of a student visa, etc), living overseas, who had money overseas (such as inherited from a foreign family member). Cases I have personally heard about have seen punitive taxes amounting to 50% of the entire fortune, and in one case over 100% - i.e. they took away the family's millions and they still owe more because of the fees due to accountants and lawyers.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 10:54 pm

Quoting PPVRA (Thread starter):
A more accurate name for the bill they proposed would be the "Shackling of Americans Act". A virtual Berlin Wall, indeed. . .

You can't tax a non-citizen....simple as that.

If this bill passes, I'm going to burn my passport and become a nonstatesman.

I highly doubt this will pass though. Highly unconstitutional.

Either way I am about to join this man's ranks in about 10 or 15 years if American politics continue down this same road.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 11:15 pm

Quoting mham001 (Reply 3):
I don't know about the bill but I find Saverin despicable. He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship. All to avoid paying taxes in the country that made him rich.

This is the benefit of small government ideas, less regulation - letting entrepreneurs go about the business of getting wealthy without being impeded.

If you are innovative enough to be wealthy, you should be given incentives. This sort of thing doesn't give anyone an incentive to try to become wealthy.  
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Thu May 17, 2012 11:27 pm

Quoting BMI727 (Reply 14):
America did not make him rich. His ideas, work and innovation made him rich. I find the notion that the country can make you rich and that personal wealth is essentially a trust from the nation despicable.

LOL, seriously? Since when does ripping off MySpace equate into ideas and innovation? Users initially flocked to Facebook because the site was seemingly more private (you had be invited/seemingly confirm your identity) before it became a hot fad.

Can you name one other country that gives somebody the opportunity to rip off somebody else's idea, improve on it and have it become a global fad to the tune of a $100B market value?

(That doesn't mean I think he should have to pay taxes. But that's not what I'm responding to.)
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:06 am

A huge number of shoppers are at Pennsylvania's King of Prussia mall because PA doesn't subject clothes to sales tax, unlike NJ. NJ, DE and MD make a lot of liquor sales to Pennsylvanians trying to escape the PLCB's monopoly. AZ and NV are full of Californians who got sick of the state's income tax structure.

Quoting CompensateMe (Reply 22):
LOL, seriously? Since when does ripping off MySpace equate into ideas and innovation? Users initially flocked to Facebook because the site was seemingly more private (you had be invited/seemingly confirm your identity) before it became a hot fad.

Well, first of all, MySpace itself was a rip off of Friendster. Facebook was launched just a few months after MySpace and was different in that your university affiliated was a huge part of your profile. MySpace never had networks and focused mainly on high school kids.

A lot of enormously successful products involve just slight modifications of existing products. The iPod, for example, was just a slight redesign of existing MP3 players. You might not find it innovative, but the market disagrees.
 
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:06 am

Quoting D L X (Reply 11):
By "dodging" I mean that it is highly suspect that right before he's about to receive a major windfall, he denounces his citizenship and will therefore have a much smaller tax burden.

How many people do you know renouncing their citizenship? Doesn't that strike you as odd?

Follow. The. Money.

Well honestly I don't find it suspect at all. He is most probably doing NOW it to avoid the tax consequences (and if he is who really cares). But the thing is he is only nominally connected to the USA, he is perfectly free to do what he wants. As others have alluded to, what are we becoming a financial USSR? If you are here you can't leave, "you and your stuff are ours"? That's asinine.

It does not strike me as odd at all that he is renouncing his US citizenship. I was born here so this is my home country, I also live here and have a life and family here so it is absolutely my first and one and only home country. But if that wasn't the case, why would I care about keeping a US citizenship? And then add to that the fact it would cost me millions upon millions of dollars to do so? Yeah, I'd drop it too.

Quoting CompensateMe (Reply 22):
Can you name one other country that gives somebody the opportunity to rip off somebody else's idea, improve on it and have it become a global fad to the tune of a $100B market value?

China?  

By the way the one word you used is key to the success of the USA throughout history: "Improve".

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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:11 am

Quoting KiwiRob (Reply 5):
Why should you care if he goes, he wasn't even an American to begin with, the guy is Brazilian by birth, he didn't use any US resource's to make his fortune, without his personal fortune Facebook might not have existed. BTW he's also been living in Singapore since 2009.

Have you seen The Social Network, he got screwed over by Zuckerberg and sued under the DOJ to get shares and money as compensation and now stands to cash in big from the IPO.

Quoting BMI727 (Reply 14):
Frankly, as far as I'm concerned, taxes are negotiable like anything else.

News to me, you pay what your country's tax department deems you should pay and there is now way around it. If you owe money to the IRS they will get it one way or another and if you still refuse then they will arrest you.

Quoting casinterest (Reply 17):
The real issue here is to go after folks that are leaving the US Citizenship soley for Tax Purposes.

The funny part is, sure he lives in a place where he can pay less taxes but something as trivial as chewing gum is now illegal for him.
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:46 am

Quoting PHX787 (Reply 20):
If this bill passes, I'm going to burn my passport and become a nonstatesman.

And then you'll be tracked down and SB1070'd outta here, alien.  
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:50 am

I wouldn't chose Singapore as a tax haven either, but there are other options. Now, he says he's doing business there and that's very possible. The way the US is taxing its citizens everywhere is kind of strange really, it defies the justifications of why there are taxes. Taxes are there to pay for things you use or are entitled to where you live. If you can't use the services because you don't live there, why should you pay ? Well, I guess there could be a small "expatriate tax" to pay for consular services or things like that.

Imagine an American living in a third world country where everything is crappy but where taxes are low. He now has to pay cash for every service, but still pay taxes to the US for those same services he can't use ?
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:55 am

Quoting mham001 (Reply 3):
don't know about the bill but I find Saverin despicable. He used the resources of this country to make his fortune and then renounces the most valuable thing any citizen has, his citizenship. All to avoid paying taxes in the country that made him rich.

Saverin is a tax-evading "internationalist". He was born in Brazil (his father is a wealthy import/export and real estate mogul), the family moved to Miami to escape organized crime threats to their family in Brazil, then he went on to Prep School in Florida and Harvard University (graduated with a degree in economics). Saverin also filed a law suit against Facebook and Zuckerburg as he felt his share in Facebook was being diluted. Zuckerburg (afraid of possible bad press) worked out an out-of-court settlement. Saverin is said to be a raging sociopath, according to schoolmates at Harvard. He's an internationalist - he has no sense to patriotism to the United States.

[Edited 2012-05-17 17:59:39]
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 1:11 am

Quoting mham001 (Reply 3):
I don't know about the bill but I find Saverin despicable

You know what I find despicable? The U.S. taxing people it deems U.S. citizens for tax purposes (with arbitrary IRS criteria defining who it should apply to) for income earned abroad (the only country other than Eritrea that does this). The U.S. in essence making it impossible for its own citizens to compete on a global scale, for global jobs. The U.S. confiscating the retirement savings of U.S. citizens who worked their entire careers abroad. The U.S. making it impossible for U.S. citizens who live abroad to own even basic checking accounts to pay their rent. The U.S. requiring annual financial statements from three generations of family members of non-U.S. citizens that happen to be unfortunate enough to be married to U.S. ones. That is truly despicable. A guy renouncing a piece of paper so ten years from now he can stop being subject to tyranny is not despicable, it is just common sense.

Quoting BMI727 (Reply 14):
So problem, solution, everybody wins.

Exactly. For someone who hates the "1%" so much they sure get their panties in a twist when they leave.

Quoting PPVRA (Reply 18):
And eventually a brain drain too.

I am currently in the U.S. on an H-1B visa, paying more taxes than most Americans, and contributing to a Social Security system I will never collect on. When it comes times to have to get a green card I will surely look for a job abroad, as that is like the Hotel California - you can check in any time you like but you can never leave.

Quoting PHX787 (Reply 20):
You can't tax a non-citizen....simple as that.

Actually, the U.S. does that all the time. If you renounce your U.S. citizenship you not only pay an exit tax (30% of your already-taxed net worth) but you need to keep making tax payments as if you were a U.S. citizen for the following 10 years.

Quoting tugger (Reply 24):
what are we becoming a financial USSR? If you are here you can't leave, "you and your stuff are ours"? That's asinine.

Yep. Just like the Hotel California.

Quoting StarAC17 (Reply 25):
I can't figure out why money is more important than freedom to some people.

How the hell is being taxed on income you earned abroad (or having to file yearly detailed asset summaries even if you are not subject to a tax liability), with punitive fines if you mess up even the most inconsequential paper, freedom?
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 1:28 am

Quoting PPVRA (Thread starter):
Facebook co-founder Eduardo Saverin has come under increased scrutiny following news that he had renounced his U.S. citizenship to become a resident of Singapore.

And what is of big concern is Zuckerberg himself who might not be too far behind Saverin in renouncing his citizenship.Zuckerberg has made no secret of the fact he is both an atheist and anarchist.Zuckerberg has proposed to build a floating city in international waters and declare total separation of any government.While I can't remember who was the source,which I believe was Yahoo,and this story goes back awhile,recently another individual proposed the same thing.

This might explain why Zuckerberg doesn't want to sell FB and even some greed on Zuckerberg's part to carry out such a plan.But clearly,there is a lot of arrogance on the part of Zuckerberg.And it could be Saverin was intended to be a fall guy at this time to test the waters for Zuckerberg.
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Mir
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 1:31 am

If he wants to go, let him go. And then treat him like any other foreigner. Make him apply for visas to come back just like anyone else. No need to impose additional taxes on him.

Quoting BMI727 (Reply 14):
America did not make him rich. His ideas, work and innovation made him rich.

By that logic, there should be a lot of rich people in North Korea, since all it takes is ideas, work and innovation. Obviously that's not the case - it takes a country where such things are valued, where there is a ready supply of intelligent people, where there is a good legal structure to ensure fair competition, etc.

Yeah, you need to be smart and work hard, but discounting the benefits that being in a certain country bring is foolish.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
StarAC17
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 1:54 am

Quoting Mir (Reply 31):
By that logic, there should be a lot of rich people in North Korea, since all it takes is ideas, work and innovation. Obviously that's not the case - it takes a country where such things are valued, where there is a ready supply of intelligent people, where there is a good legal structure to ensure fair competition, etc.

It's simpler than that, he created something people wanted. Being in America was a catalyst because there is no Internet censorship (you would never see something like this coming out of China for those reasons).

He also like Steve Jobs broke the traditional rules and did things their way.

Quoting Mir (Reply 31):
If he wants to go, let him go. And then treat him like any other foreigner. Make him apply for visas to come back just like anyone else. No need to impose additional taxes on him.

This bill bars anyone who renounces their US citizenship to avoid taxes from entering the US again.

Quoting PSA53 (Reply 30):
This might explain why Zuckerberg doesn't want to sell FB and even some greed on Zuckerberg's part to carry out such a plan.But clearly,there is a lot of arrogance on the part of Zuckerberg.And it could be Saverin was intended to be a fall guy at this time to test the waters for Zuckerberg.

Facebook's time is limited, this IPO is timed because for a large part many think it is a passing fad and it is way to make a lot of money before a decline.
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us330
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 2:00 am

Quoting PSA53 (Reply 30):
This might explain why Zuckerberg doesn't want to sell FB and even some greed on Zuckerberg's part to carry out such a plan

"doesn't want to sell FB"--the site is having its IPO tmw, you realize that?

Quoting PSA53 (Reply 30):
Zuckerberg has made no secret of the fact he is both an atheist and anarchist.Zuckerberg has proposed to build a floating city in international waters and declare total separation of any government

You really do need to supply a source when you are making outlandish statements such as these. Why is he living in california if he's an anarchist? that state's government is about as big as a state government can be.
 
compensateme
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 2:05 am

Quoting aa757first (Reply 23):
A lot of enormously successful products involve just slight modifications of existing products. The iPod, for example, was just a slight redesign of existing MP3 players. You might not find it innovative, but the market disagrees.

I certainly don't disagree with your first statement. But I do disagree with you and a previous poster that Facebook (initially) added "ideas" and "innovation" to the market. It prospered because it addressed the primary concern at the time (users had to be invited to seemingly "confirm" their identity). It wasn't the first site to do so, it just became the most popular. The market doesn't have to agree -- it'll flock to what's ever the most popular social networking website. The only thing impressive about Facebook is that it managed to hang onto its membership base for so long. Nor is there another country on Earth where getting lucky will net you $19B several years later. Certainly not China.

[Edited 2012-05-17 19:16:18]
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PHX787
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 3:59 am

Quoting EA CO AS (Reply 26):
And then you'll be tracked down and SB1070'd outta here, alien.

LOL! And i'd be proud of that.

Quoting Pyrex (Reply 29):
Actually, the U.S. does that all the time. If you renounce your U.S. citizenship you not only pay an exit tax (30% of your already-taxed net worth) but you need to keep making tax payments as if you were a U.S. citizen for the following 10 years.

Boy, we sure do like taxing people, don't we? Shouldn't it be against international law to tax someone who isn't a national of your country?!
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zhiao
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 4:13 am

Quoting WestJet747 (Reply 7):
If you look at Facebook's history, and their current business model, you'll find that being American had very little to do with making him rich. Heck, the man who originally invested in Facebook, Peter Thiel, isn't even American, he's German.

It absolutely does. Why do you think a huge portion of successful high tech and internet firms originate in USA? Facebook was able to launch due to the huge American market which enabled it to later expand. Not to mention a top notch US Ivy League education which fosters incredible innovation.

[Edited 2012-05-17 21:19:37]
 
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zippyjet
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 4:21 am

Money talks you know what walks. Hopefully he will take advantage of the local lovely female population.
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aa757first
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 6:32 am

Quoting Aesma (Reply 27):
Imagine an American living in a third world country where everything is crappy but where taxes are low. He now has to pay cash for every service, but still pay taxes to the US for those same services he can't use ?

I think there is an automatic deduction of about $100,000 when you're abroad, which would probably cover a lot of income for someone living in the developing world.

As an aside, does anyone know why this policy exists? It seems contrary to our otherwise tax skeptical nature.

Quoting stasisLAX (Reply 28):
Saverin is said to be a raging sociopath, according to schoolmates at Harvard.

Then it must be true.

Quoting stasisLAX (Reply 28):
He's an internationalist - he has no sense to patriotism to the United States.

So? That isn't illegal, nor is it immoral.

Quoting PSA53 (Reply 30):
And it could be Saverin was intended to be a fall guy at this time to test the waters for Zuckerberg.

There's nothing illegal about this.

Quoting StarAC17 (Reply 32):
This bill bars anyone who renounces their US citizenship to avoid taxes from entering the US again.

And that's the silliest portion of the bill. When you visit, you have to pay taxes.

Quoting zhiao (Reply 36):
It absolutely does. Why do you think a huge portion of successful high tech and internet firms originate in USA? Facebook was able to launch due to the huge American market which enabled it to later expand. Not to mention a top notch US Ivy League education which fosters incredible innovation.

The Ivy League education was probably paid for by his wealthy parents, not the US government. This is a perfectly legal maneuver. I'd also like to point out Facebook has created a lot of high paying jobs in the Silicon Valley and there will be a lot of sudden millionaires running around the Bay. That works out nicely for the middle class people who work at Neiman Marcus, Mercedes-Benz and Century 21.

Quoting CompensateMe (Reply 34):
But I do disagree with you and a previous poster that Facebook (initially) added "ideas" and "innovation" to the market.

Sometimes small ideas can be really revolutionary. But there's also an aspect of luck here -- many businesses are profitable not because they're mind-blowing, but just happened to be in the right place at the right time.
 
Mir
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 6:44 am

Quoting StarAC17 (Reply 32):
This bill bars anyone who renounces their US citizenship to avoid taxes from entering the US again.

That's already in the laws on visa eligibility, though it says that avoiding paying taxes is grounds for visa rejection, not automatic visa rejection. But it's not very enforceable, since you'd have a very hard time proving that you expatriated for the purpose of avoiding taxes.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
Superfly
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 8:09 am

Quoting Dreadnought (Reply 19):
Schumer was one of the creators of FATCA,

This is something that I've been griping about in the other tax related threads. This is unbelievable!

Quoting Aesma (Reply 27):
The way the US is taxing its citizens everywhere is kind of strange really, it defies the justifications of why there are taxes.

Agreed!   
Many foreign banks are closing accounts with US Citizens as a result.


Quoting Aesma (Reply 27):
He now has to pay cash for every service, but still pay taxes to the US for those same services he can't use ?

That is the gist of it.  
Quoting Pyrex (Reply 29):
For someone who hates the "1%" so much they sure get their panties in a twist when they leave.

 
Exactly!

Quoting Pyrex (Reply 29):
that is like the Hotel California - you can check in any time you like but you can never leave.

Excellent analogy.

Quoting Pyrex (Reply 29):
If you renounce your U.S. citizenship you not only pay an exit tax (30% of your already-taxed net worth) but you need to keep making tax payments as if you were a U.S. citizen for the following 10 years.

That is criminal.

Quoting PSA53 (Reply 30):
And what is of big concern is Zuckerberg himself who might not be too far behind Saverin in renouncing his citizenship.

Superfly may not be that far behind as well and I'm not even rich.
Bring back the Concorde
 
CXfirst
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 8:24 am

Quoting D L X (Reply 11):
How many people do you know renouncing their citizenship?

Well, Singapore does not allow dual citizenship for non-born citizens. So for Saverin to get citizenship, he was required to be a permanent resident for 2 years, and then give up any other citizenships when receiving Singaporean citizenship.

As he moved there in 2009 (3 years ago), I would argue that he lived there, enjoyed it, got permanent residency, and has had the thought of gaining citizenship since then. He wasn't able to until recently, and that just happens to coincide with facebook being put up on the stockmarket.

I'm not saying he would have gotten citizenship now if facebook wasn't going to be traded, but for someone who has been thinking about it, has had permanent residency, this is the logical time to do it. To me, it doesn't seem like a method to avoid tax, rather the tax avoision being an added benefit.

-CXfirst
 
Superfly
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 8:46 am

Quoting D L X (Reply 11):
How many people do you know renouncing their citizenship? Doesn't that strike you as odd?

I know several and they're not all 'rich'.

Quoting CXfirst (Reply 41):
I would argue that he lived there, enjoyed it,

  

The girls in Singapore are much nicer and prettier than in Miami.  
Bring back the Concorde
 
StarAC17
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 9:50 am

Quoting Aesma (Reply 27):
The way the US is taxing its citizens everywhere is kind of strange really, it defies the justifications of why there are taxes. Taxes are there to pay for things you use or are entitled to where you live.

I don't think you have to pay but you are required to file a return that says that you didn't earn any income in the US. Most of the issues that US citizens run into are insane penalties for not filing for potentially decades.

It's still nonsense.

Since this came up, does anyone know the rule for Canada, I will likely be in Australia for all of 2012 with no Canadian income. Do I tell my dad who did my 2011 taxes to file for me or just ignore it, Canada has no mandate for you to file when living abroad??

Quoting Superfly (Reply 40):
Agreed!   
Many foreign banks are closing accounts with US Citizens as a result.

Big issue in Canada and we are lobbying against this. There are over a million US citizens living in Canada and we are pretty sick and tired of giving uncle Sam information he has no business having.
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Aesma
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 10:02 am

Quoting StarAC17 (Reply 43):
I don't think you have to pay but you are required to file a return that says that you didn't earn any income in the US. Most of the issues that US citizens run into are insane penalties for not filing for potentially decades.

IIUC you have to pay the difference between local and US taxes, so if local taxes are higher (like here in France) then you don't own the IRS. Still have to do the paperwork, though.
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bjorn14
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 10:22 am

Quoting Dreadnought (Reply 12):
If the money is earned in the US, by all means it should be taxed in the US.

The funny thing is most capital gains investment by foreigners is NOT taxed by the US

Quoting BMI727 (Reply 14):
It's not like they won't allow him to renounce his citizenship.

He renounced it last year so it's a done deal and there is a 1868 law on the books allowing US citizens to renounce.

Quoting homer71 (Reply 15):
Is this the same Eduardo Saverin portrayed in The Social Network by Andrew Garfield?

Yes.

Quoting aa757first (Reply 38):
I think there is an automatic deduction of about $100,000

It's actually $92K. I hit that level in Norway with an average Norwegian salary.

Quoting aa757first (Reply 38):
When you visit, you have to pay taxes

Only if you visit for 4 or more months. If you're a US citizen you cant spend more than 38 days in country or you lose your exemption.

Quoting Mir (Reply 39):
That's already in the laws on visa eligibility, though it says that avoiding paying taxes is grounds for visa rejection, not automatic visa rejection. But it's not very enforceable, since you'd have a very hard time proving that you expatriated for the purpose of avoiding taxes.

This shows how srupid Chuckie Schumer is. It's already on the books but rarely if ever enforced.
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Pyrex
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 11:47 am

Quoting Mir (Reply 39):
But it's not very enforceable, since you'd have a very hard time proving that you expatriated for the purpose of avoiding taxes.

Dude, it is the IRS, they can do whatever the hell they want. Since when did lack of evidence ever stop the sociopaths running their international taxation department?

Quoting Aesma (Reply 44):
IIUC you have to pay the difference between local and US taxes, so if local taxes are higher (like here in France) then you don't own the IRS. Still have to do the paperwork, though.

That is not true - it only applies to income taxes. So if you are living in a country with a different tax structure (e.g., low/no income taxes and really high sales tax, real estate taxes, etc.) so that your total tax bill is actually higher than what you would pay in the U.S. you can still get hit with U.S. taxes. Plus, any contributions you make for local tax-deferred retirement savings schemes (even if mandatory under U.S. law) will not be deductible for U.S. income tax purposes.
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us330
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:11 pm

Quoting aa757first (Reply 38):
As an aside, does anyone know why this policy exists?

I don't know for sure--and that kind of information can presumably be found in the legislative history for the act, which includes the various debates and statements by politicians supporting it---but I can make an educated guess that a plausible reason for it that you will never see mentioned in any legislative history, or uttered by any politician in support of it, relates to accountability, representation, and whether passing an act like this would hurt a politician's chances of reelection. A plausible explanation could be that the expat population is an easy scapegoat because they aren't that visible to the average voter, sufficiently spread out so that they are unable to act collectively to express their disapproval, and lack a designated representative in congress--so, they can't hold Washington accountable for actions that affect them.

I'm not familar with how/whether expats can vote for representatives other than the president. Can anybody on this thread enlighten me?

Quoting StarAC17 (Reply 43):
Big issue in Canada and we are lobbying against this. There are over a million US citizens living in Canada and we are pretty sick and tired of giving uncle Sam information he has no business having

It's not just Canada. Google Bank Wegelin--a Swiss bank heavily fined for helping Americans evade taxes--and a bank with no locations outside Switzerland.
Here's a story regarding their indictment:
http://www.businessweek.com/news/201...lping-u-s-clients-evade-taxes.html
 
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Dreadnought
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 12:26 pm

Quoting us330 (Reply 47):
It's not just Canada. Google Bank Wegelin--a Swiss bank heavily fined for helping Americans evade taxes--and a bank with no locations outside Switzerland

I was working at Credit Suisse in 1989 when it was announced that we bought First Boston, following UBS's purchase of Warburg. I remember the talk in the hallways that this was an unbelievably bad idea. Having assets in the US just opened us up to the US government eventually holding our US assets hostage.

It's very simple. The US should tax activity in the US. Anything outside of US borders is none of their damned business.
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Mir
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RE: Fbook Cofounder Drops Citizenship, Angers Senators

Fri May 18, 2012 1:14 pm

Quoting Pyrex (Reply 46):
Dude, it is the IRS, they can do whatever the hell they want.

It's the State Department, actually - they're the ones who issue visas, not the IRS.

-Mir
7 billion, one nation, imagination...it's a beautiful day

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