Schumer: Facebook founder Saverin wants to ‘de-friend’ USA – The Hill’s Hillicon Valley


 

Schumer: Facebook founder Saverin wants to ‘de-friend’ USA

By Brendan Sasso and Alicia M. Cohn

Democratic Sens. Charles Schumer (N.Y.) and Bob Casey Jr. (Pa.) announced legislation on Thursday designed to punish people who renounce their citizenship in order to dodge taxes.

Their bill, the Ex-Patriot Act, is a direct response to Eduardo Saverin, the co-founder of Facebook, who renounced his U.S. citizenship last year. The news became public last week.

“Eduardo Saverin wants to de-friend the United States of America just to avoid paying taxes. We aren’t going to let him get away with it,” Schumer said at a press conference Thursday where he announced the new legislation.

The citizenship move will save Saverin, who was born in Brazil and now lives in Singapore, an estimated $67 million to $100 million in taxes. That amount could increase if Facebook’s stock price rises.

Schumer called Saverin’s actions “outrageous.”

“Saverin has turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire,” Schumer said.

Casey called Saverin’s plan an “insult to the American people” that “cries out for some basic justice.”

Under the bill, anyone who renounces their citizenship and has a net worth of $2 million or an average income tax liability of $148,000 over the last five years will be presumed to be trying to dodge taxes. The person can appeal that designation to the Internal Revenue Service.

But if the IRS determines a person gave up their passport for primarily tax reasons, all of the person’s U.S. assets will be taxed at 30 percent, double the usual rate of 15 percent.

The person will also be barred from ever entering the United States again.

To re-enter the United States, people would have to pay back all of the taxes they would have owed.

Saverin denies that he is giving up his citizenship to avoid taxes.

In an interview with The New York Times, Saverin said the move “had nothing to do with taxes.”

“I was born in Brazil; I was an American citizen for about 10 years. I thought of myself as a global citizen,” he said. 

He currently lives in Singapore, which has no capital gains taxes.

Schumer said if anyone believes Saverin’s explanation, “I have a bridge I want to sell you.”

The Constitution bars Congress from passing a law to punish a particular individual.

But Schumer argued that the bill is “clearly not unconstitutional” and would apply to anyone who is in a situation similar to Saverin.

He acknowledged that Saverin would be able to keep the profits from any stocks he sells before the bill becomes a law.

But he noted that the Facebook co-founder would be barred from ever returning to the United States, and he argued it would be difficult for someone as rich as Saverin to not own some investments in the country.

Schumer said the legislation has nothing to do with efforts to raise taxes on the richest one percent of the country.

When asked whether he thinks Republicans will support the bill, Schumer asked, “Why wouldn’t they?”

Casey said he would like to hear the reason why anyone would oppose the measure.

In a tweet on Thursday, the National Taxpayers Union, which advocates for lower taxes, said the Ex-Patriot Act is “not serious policy.”

“Why not build a tax system people want to inhabit, rather than use force to trap them?” the group wrote.

 Schumer: Facebook founder Saverin wants to ‘de-friend’ USA – The Hill’s Hillicon Valley.

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  1. #1 by --Rick on May 18, 2012 - 3:33 AM

    the National Taxpayers Union has it correct. Mr. Saverin renounced over a year ago and he stated at that time that U.S. regulations and tax codes made it too difficult to do business overseas; so difficult, in fact, that many nations no longer want to do business with America corporations.

    Just this week, a billionaire from France has done the same thing for similar reasons. He sees the newly elected socialist President and his party as hostile to businesses and success; so, he is taking his money and all of his businesses out of France to a country to be chosen. You can bet that country will NOT be the United States as its current business climate and view of success is not dissimilar from that of France.

    Ayn Rand wrote about a place called “Galt’s Gulch”. Could specific nations outside of the United States be that place where intellectuals, creators, and successful business owners take their wealth, their abilities and their minds seeking peace and freedom to act in their own selfish interests, i.e. the moral imperative that one must live for oneself as a primary if life is ever to have any meaning or happiness?

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