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

parallel_prankster writes "Bloomberg reports that Eduardo Saverin, the billionaire co- founder of Facebook, has renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill. From the article: 'Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin's stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. Saverin won't escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don't sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan's law school. For tax purposes, the IRS treats the stock as if it has been sold.'"

Comments

Re:Try some numbers...

[J'raxis]

Federal spending in 1990 was $1.1 trilion. Source. Federal spending is currently $3.8 trillion. Source. These figures are a combination of "discretionary" and "mandatory" spending.

The individual income tax for this year is $1.359 trillion, and the corporate is $0.358 trillion. Source.

( 1.359 + 0.348 ) / 3.809 = 0.449 = 44.9%

If you remove the $1.707 trillion that represents the income tax from the total Federal revenues of $2.902 trillion, you are left with $1.195 trillion of revenues. $1.195 trillion is bigger than $1.1 trillion, hence current federal revenues, minus the income tax, could pay for the 1990 budget.

Ron Paul states that:

I want to abolish the income tax, but I don't want to replace it with anything. About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent -- over half of all revenue -- comes from other sources, like excise taxes, fees, and corporate taxes.

We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don't need to "replace" the income tax at all.

Ron Paul is telling the truth. His 45% figure is accurate; his assertion that current Federal revenues sans income tax could pay for the 1990 budget, is accurate. You, however, are trying to confound the issue by bringing up irrelevant statistics, conflating statements I made with Ron Paul's statements, and outright lying when you say that Paul is doing so.

Re:Not a very graceful move

[Cimexus]

It's not necessarily always people trying to make a quick buck.

My wife is American but hasn't lived there since we were married (which was quite a while ago). She is considering giving up her US citizenship because once she makes more than a certain amount per year, she no longer falls under the foreign-earned income exemption and can actually end up getting double taxed (i.e. she pays her full local income tax, and then also has to pay income tax to the US on whatever she earns above the foreign-earned exemption limit. That is ridiculous, I'm sorry. Why would we do that if we didn't have to?

America is the only country I know of (there may be some others, but not that I've come across) that tax you based on your citizenship, rather than your residency. If you're a US citizen, you have to file a tax return and potentially pay tax, even if you've not set foot inside the country in 50 years and have no financial affairs there whatsoever. That needs to change if they want to stop people randomly giving up citizenship for financial reasons.

Re:Requirements for Citizenship in Singapore

[Solandri]

In my experience, their situation has absolutely nothing to do with not wanting to work. I get so sick of hearing ignorant pricks say some lame line like "work at McDonalds." There is no unlimited supply of jobs available anywhere. The poor want jobs - badly. They want to work, and do so when they can.

I worked at and eventually became a manager at a company which hired predominantly low-income workers. I got to work with and talk with quite a few of them, as well as interview countless others. The poor run the full gamut. Some want badly to work (the hardest worker I've ever met was poor, and - I later learned - an illegal immigrant). Some are lazy bums who will slack off the moment they don't have any supervision (we had to let one guy go because he was too lazy to even show up for work most days - it took him three weeks to pick up his first and only paycheck despite us calling him every 2-3 days because he was too lazy to drop by).

On average I would say the poor have a weaker work ethic and are harder to manage than middle- and upper-class folks. They are enthusiastic when they talk, and the first few days at work. But as the weeks wear on, their performance starts to drop. You have to micromanage them more (on average). That's partly what keeps them poor. Many of them also suffer from circumstances outside their control which keeps them down - severe allergies, an uncontrollable temper, physical handicaps which limits their ability to get manual labor jobs, kids and the inability to find babysitters, a criminal record from some stupid mistakes fresh out of high school, etc.

So on average I'd say GP is slightly correct. But the poor run the full gamut and it's horribly unfair to pre-judge them all based on the average. You really do have to get to know each individual and their quirks. If they have a good work ethic but are held back by circumstances, once you get to know them you can often match them up with jobs which minimize the impact of their impediment. e.g. The guy who had a bad temper loved animals, so we had him tending horses. He absolutely loved that, and it reduced his contact with other workers thus minimizing opportunity for his temper to become a problem. And many of the younger ones with a poor work ethic can be turned around with some good management and encouragement.

Your statement positively oozes contempt for people you quite obviously have no clue about. In my mind, anyone who sneers at a human being because of their poverty is worse than a card-carrying KKK neo-nazi. It's every bit as prejudiced as the belief that a person's color has anything to do with their character.

Given Slashdot's political leanings, I'd point out that the exact same thing is true for rich people. You shouldn't sneer at a human being because of their wealth either. Most of the wealthy people and especially the few millionaires I know are some of the hardest working people I've ever met.

It's wrong to assume poor people are lazy, and it's wrong to assume rich people are undeserving fat cats who simply take advantage of others. You really do need to avoid these prejudices and get to know each person individually.