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U.S. billionaire chooses to build new life in Singapore



Published: Fri, May 18, 2012 @ 12:00 a.m.

For a few short years, Eduardo Saverin was an American success story. The young man came here with his already wealthy family from Brazil, settled in Miami, attended prep school and then Harvard University, from which he graduated magna cum laude in 2006. It was a degree he would never need to make a living; he was already on the way to being a billionaire as one of the four founders of Facebook.

Today is a big day in the history of Facebook, the social network that is expected to increase its total value to about $100 billion through an IPO of 421 million shares for public purchase.

But Saverin won’t be in Cambridge or New York or Miami or anywhere else in the United States to celebrate. Saverin will be in Singapore, where he has been since 2009. And if a couple of U.S. senators have their way, Saverin will never visit Cambridge or New York or Miami or anywhere else in the United States ever again.

That’s because Saverin, 30, has renounced his U.S. citizenship in a move that may have been designed to insulate him from future capital gains taxes on his Facebook holdings — worth about $4 billion now — and any other U.S. investments he may hold.

After the story broke recently, Saverin responded to the criticism — more accurately disdain — to which he was being subjected by denying any attempt to avoid taxation. Indeed, a spokesman said that Saverin is subject to millions of dollars in tax liability under a law covering citizens who renounce their citizenship.

“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Tom Goodman, Saverin’s spokesman, told Bloomberg News.

Senators respond

Saverin’s intentions — good or bad — notwithstanding, two Democratic senators, Chuck Schumer of New York and Bob Casey of Pennsylvania have proposed the Ex-PATRIOT Act, a bill that should at least get an award in the creative acronym category, standing as it does for the phrase, “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act.

The bill would establish a 30 percent tax on future capital gains on anyone determined by the IRS to have left the country for tax purposes. It would also bar them from re-entering the United States.

We don’t know that such a law will actually stop anyone from leaving, but on its face it seems fair. Saverin is no doubt an intelligent and hardworking young billionaire, but he is a billionaire in large part by virtue of the opportunities that were made available to him in the United States.

If he believes the grass is greener in Singapore, he’s welcome to stay there. Or go anywhere else outside the United States that he may choose. But he can’t come “home” again.

We wouldn’t wish ill on him, but if he’s ever in a foreign land and gets into a spot where he could use the influence of the American consulate, we hope there’s at least a moment when he questions whether becoming a man without a country was such a smart more.


Comments

1chuck_carney(499 comments)posted 2 years, 4 months ago

More American have renounced their citizenship in the past year than ever before. i heard the rate quadrupled. Makes me wonder if people are moving to countries with lower taxes to protect their wealth.

Democrats let the poor move in and the rich move out. Sounds like a good plan for economic failure

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2Springman(235 comments)posted 2 years, 4 months ago

Who says that more Americans have renounced their citizenship than ever before? Michelle Bachman?

Read "The Sociopath Next Door:" the American culture of individualism can foster sociopathic behavior that isn't as tolerated in more group-oriented societies such as in Asia.

Having been to Singapore (starting with R&R, 1966), I will testify that it is no democracy , and eveyone is guilty until proven otherwise.

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3Photoman(1004 comments)posted 2 years, 4 months ago

Let's transfer him from ship to ship at sea and never let him see this land of ours again. We do, however, want to keep his money here to help "support" our way of governing-you know, tax the hell out of the rich so we can redistribute the wealth to our welfare society.

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4DontBanThisDrone(466 comments)posted 2 years, 4 months ago

Can't blame 'em one bit. I'd do the same thing if I were him. You would too.

(-:

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5doubled(210 comments)posted 2 years, 4 months ago

You republicans on here are either not too smart or just ok with being complete hypocrites. You get on this guy for leaving and taking his money with him --and say he's unamerican, etc, etc,...yet you vote for politicians who fight tooth and nail to provide huge tax breaks for corporations that ship thousands of jobs a year to overseas countries. Politicians like Mitt Romney. He's done it for years and years...and he's your presidential candidate. Conversely, our current President proposed that we take away these tax breaks and only reinstitute them when the company starts bringing those jobs back - for Americans. And what do your so called patriotic GOTP leaders doing in response? Nothing, other than saying 'NO". So is this guy leaving the US to save 67 million ANY DIFFERENT than ABC corp saving 67 million in payroll tax and/or other corp tax breaks when it moves its manufaturing plants to Thailand or Brazil, etc,. Well, is it? Our taxes are the lowest they've been since the 1950s and all you do is complain. Pay your taxes, it's the price we pay for getting to live free in the greatest country this earth has ever seen. Or -- you could always leave. You might not save 67 million, but at least you'll save a few percentage points in taxes.

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6chuck_carney(499 comments)posted 2 years, 4 months ago

From the 99% (i.e. Wall St. Occupiers) to the 1% (the billionaires) to Singapore(home of zero capital gains tax and future ex-patriots).

Taxing the rich isn't going to solve the problem. they will simply move away.

The US needs the rich to keep their money here and use it to create more businesses and jobs.

The number of US citizens renouncing their citizenship has quadrupled over the last four years.

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7chuck_carney(499 comments)posted 2 years, 4 months ago

Hey Springman,

By the way the WSJ reported the following on 5/18/2012:

"Last year, almost 1,800 U.S. citizens turned in their passports and green cards, a sixfold increase from 2008. "

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8doubled(210 comments)posted 2 years, 4 months ago

HEY CHUCK CARNEY.. THE NY TIMES ALSO SAID THIS...Just so we get all the info instead of your typical GOTP half-truths......

"First, in 2008, under G.W. Bush, the expatriation rules were changed. There is no longer the 10 year U.S. tax return filing requirement. Although there is now a mark-to-market regime triggering gains upon expatriation, up to $636,000 of gain can generally be excluded for individuals expatriating in 2011 (the amount is annually adjusted for inflation). Further, non-U.S. citizen, nonresidents can now annually visit the U.S. for 120 or more days without becoming taxed as U.S. residents (under the pre-2008 rules, visits to the U.S. for more than 30 days during any of the 10 years following expatriation caused the individual to be treated as a U.S. resident for that year).

With the $636,000 exclusion from the mark-to-market gain, many individuals can expatriate without paying any U.S. tax. It is important to note, however, that some individuals, especially those with assets in foreign pension plans, may unexpectedly pay more tax than they realize. The circumstances of each individual considering expatriation must be closely analyzed to determine the amount of U.S. tax that will be due upon expatriation.

The second reason for the increase in expatriations, I believe, is the recent publicity regarding the penalties and voluntary disclosures for failing to report offshore bank and other financial accounts. The U.S. tax rules for U.S. citizens living overseas can be quite complex. The increase in awareness of the penalties has caused many individuals with dual citizenship to conclude that their U.S. citizenship is not worth the stress and hassle of the U.S. tax filing rules. The U.S. is almost the only country in the world that requires its citizens that live permanently in another country to continue to file tax returns in the country of citizenship. Combine the U.S. tax return filing complexities with the potentially bankrupting penalties for failing to report certain items, and many individuals conclude that their lives would improve by shedding their U.S. citizenship."

Now -- is this the fault of our President? Or is it more likely caused by the passage of laws by our Congress, passed over the last ten years, which is made up of both GOTP and Democratic reps? Doing everything they can to help out those poor million/billionares who have SWISS BANk ACCOUNTS. Yeah, that's what I thought. So, please, do everyone here a favor and just stop -- unless you have all the facts.

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9southsidedave(4780 comments)posted 2 years, 1 month ago

Don't hate on Eduardo Saverin!

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