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Senators To Unveil the 'Ex-Patriot Act' To Respond To Facebook's Saverin
An anonymous reader writes "Sen. Chuck Schumer, D-N.Y., has a status update for Facebook co-founder Eduardo Saverin: Stop attempting to dodge your taxes by renouncing your U.S. citizenship or never come to back to the U.S. again." See this earlier story on Saverin's plan to make the leap out of the U.S. tax system.
A) More government/laws
B) More Taxes
C) More War
D) All of the above
Why target only those evade their taxes by renouncing their citizenship? Shouldn't these politicians take a good look at themselves? How many of them use every loophole (or sneaky, illegal tactic) they can find to evade their taxes? These people are not above reproach. Most, if not all, are just as guilty of evading their taxes.
Like the Soviet Union where you can't leave?
Or like Nazi Germany, where you can leave, but not bring any of your valuables?
Senators to drastically simplify the tax system and eliminate loopholes?
Instead, these two people are going to overreact to the publicity received by this particular individual and create a bill to address him and the people like him (I believe under a couple thousand people over the last few years). It will do little to impact the nation as a whole.
Imagine if they were to put their effort into fixing the root of the problem...
With asshats like Chuck Schumer in office, what makes him think Saverin (and many others) *want* to come back? It's a little like a hotel manager banning you from his hotel after you complain about the fact that someone took a crap on the room's bed.
Capital gains are already due when you renounce your citizenship. Placing the burden of proof on someone to prove they aren't renouncing for tax purposes is ridiculous, and possibly unconstitutional. Why would I need a "valid" reason to renounce my citizenship? And adding a clause to bar the person from reentry for life is just petty. Blaming people for leaving when we have laws and policies they disagree with is pointing the finger in the wrong direction. Either we don't want those people here anyway, or else we're the problem.
https://www.eff.org/https-everywhere
Expatriates from every country have family, friends, and historical ties to the country they came from. Denying visitation for that reason is morally wrong. Moreover I'm universally opposed to bills of attainder and ex-post-facto laws. They were stupid and contemptible back during the ACORN stupidity, and they're still an unreasonable abuse of legislative power now. If this act applies in any way to Saverin, it would be an undermining of the rule of law.
Why are your senators always so mad?
It makes them look busy.
Doing it as an individual is novel. However, it is a very common case for companies to do this - take all the benefits of incorporating in one place, then set up shell corporations to book all your profits elsewhere wherever taxes (and services, but it doesn't matter) are minimal. But then when somebody infringes their rights, they come crying to the powerful government where they incorporated (which actually has expensive stuff like courts and diplomats and armies to impose a global Intellectual Property regime... It's especially common among high-tech companies.) So if you include that, it is actually a large issue.
I'm not too comfortable with this particular law for some reason. I think I'd rather see nations work together to close the inter-government loopholes in corporate taxes instead.
Reduce taxes by $67 million != only pay $67 million.
Because he didn't make any of that money based on Government-subsidized infrastructure, did he? Like, for example, the protocols and research necessary to create the Internet?
This is like someone making shedloads of money with a trucking company, and then doing everything possible to not pay for roads.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
I think they're pissed off because it's the most uncomplicated way (and fully legal) of avoiding taxes. You don't even need to hire expensive lawyers or anything, like many of them senators probably have, in order to evade taxes. It's ENVY!
So what you're saying is that $64.0 mil should be enough taxes for any government?
As a nation of immigrants, I sometimes wish say China or another major country would try to pull the same thing with their citizens who have emigrated to the U.S. We would hear all kinds of politicians going high and right about human rights and violations of national sovereignty, etc.
One could argue that what FaceBook co-founder Eduardo Saverin did was unethical, but despite all of that, the right to emigrate and ex-patriate is a basic human right that is enshrined in U.S. and in international law. Punishing individuals who exercise a basic human right is by definition tyranny.
Investment income is the reward you get by risking your money by investing in a business. Investing in a business gives them capital to buy assets and hire employees.
It is not something that should be discouraged, unless your myopia extends to economics.
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That someone is successfully abusing the system better than they are.
Not that I sympathize with this slimy tax-dodger, but I hope he gets away with it.
The value of his demonstration on how the rich view the world is worth more to the world (and the American public) than the taxes he owes. I don't want that demonstration stopped.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Man he sure has some nerve for coming to this country and then renouncing his citizenship last year before the IPO was planned. And he really has some nerve paying his exit taxes when he renounced his citizenship and then not paying them after he was already not a citizen. Reading some of the better written articles on the topic today you should know that since he plans to become a citizen of Singapore where he lives and has lived for the past few years you have to renounce your other citizenships, which is exactly what he's done.
don't we have much bigger things to worry about? This isn't a common case....well, it might be if things continue the way they are going.
From the article, "Last year 1,700 people renounced their U.S. citizenship." YES, for a nation of only 313 million, 1,700 people renouncing their citizenship in a single year is a major problem. I for one am glad our Senate is on it.
Exactly. All the massive companies have their main corporate body elsewhere in a tax havens, and you get bet the main shareholder have their wealth set up in a similar manner.
Perhaps the politicians would be better off serving the public and not setting up laws to facilitate the above for a quick back-hand in their own self interest.
>>Who puts Saverin's house out when it is burning out of control?
Singapore.
>>Who paves the roads and repairs the bridges that Saverin's luxury cars utilize every day?
Singapore.
>>Who delivers the mail that Saverin relies on for his business and home operations?
Singapore.
>>Who manages the pipes and treatment of the shit that Saverin dumps down his toilets every day?
Singapore.
>>Who patrols the streets that Saverin lives and works on, protecting him from crime?
Singapore.
>>Who watches and protects the nation of America when terrorists and other countries seek to destroy Saverin's way of life, property, and business interests?
America, but he lives in Singapore and has for three years so he couldn't care less.
Because he didn't make any of that money based on Government-subsidized infrastructure, did he? Like, for example, the protocols and research necessary to create the Internet?
All valid points. However, I am a little bewildered as to why you have stood idly by whilst China conducts massive commerce over the same infrastructure with money actually leaving the USA and no sales tax being paid on those transactions to the American government. Where is your outrage there? Not only is that like a truck drive avoiding paying for roads, it's like a truck driver driving your money away on those same roads. Why is this not outrageous?
This is like someone making shedloads of money with a trucking company, and then doing everything possible to not pay for roads.
Look, my initial reaction to this story is identical to yours. I see this guy go to Harvard, reap the benefits of being in a safe country with tax dollars that create the ecosystem for something like Facebook to flourish and then when it comes to his turn to put back into the system, he kites off. Well, the story isn't that simple, he was born in Sao Paulo and probably is one of the people the US has brain drained from India, Brazil, etc in order to bolster our own economy. On top of that, Facebook is a global phenomena by now with serious activity world-wide. So, you know, I don't feel so bad that now Singapore or where ever he takes up residence has "reverse brain drained" the US in this instance due to "steep" taxes. I'd be more upset if Zuckerberg did it but in the end, this single IPO is probably trivial compared to every company maneuvering "sales" to Ireland and the Netherlands to avoid paying billions of dollars to the United States each year. This is a one time thing and I think the "Ex-Patriot Act" is garbage when they should be targeting the systematic avoidance done by almost every company that can claim international sales. Poor poor Eduardo, he was just being an efficient little Capitalist.
With corporate person-hood becoming a major problem, will the "Ex-Patriot Act" apply to these tax evasion strategies of which everyone is guilty?
My work here is dung.
It's not entirely to avoid taxes - he'll pay those regardless. It's to make it easier to do business in other countries. There have been a few articles on ex-pats, and the legal hoops through which people and foreign banks, in particular, have to jump is ridiculous, if not downright onerous. Some foreign banks have simply refused to do business with Americans because of these stupid regs. It's as if the good ol' US of A owns your ass, even if you're not in this country, or making money, here.
Schumer - my senator, unfortunately - is just grandstanding, once again, the pissbag...
From 8 USC 1182 - INADMISSIBLE ALIENS:
(E) Former citizens who renounced citizenship to avoid taxation
Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible.
So, what's the point of the "new" proposed law besides political grandstanding?
Why target only those evade their taxes by renouncing their citizenship? Shouldn't these politicians take a good look at themselves? How many of them use every loophole (or sneaky, illegal tactic) they can find to evade their taxes? These people are not above reproach. Most, if not all, are just as guilty of evading their taxes.
Tax avoidance is NOT tax evasion. There is a big difference between the two.
Yes they are, if you have ever dealt with the IRS as a expat, or tried to setup banking in another country with the US as your nationality you would do exactly the same thing. No bank wants to deal with you, the IRS requires immense amounts of info on every single account you hold and the fines for making a mistake as unbelievable.
If you don;t plan on returning its actually a decent way out of the IRS system.
It's not a matter of not giving investors incentives. It's a matter of giving them reasonable incentives, then them turning around, giving you the middle finger, and not paying their fair share after being giving major tax breaks and government protection.
Just because you're wealthy or a large corporation doesn't mean you get to skimp on your share of the check when it's your turn to pay up.
I find it quite bad if the Senate is actually doing this in response to one guy leaving. The constitution offers us 2 key protections that I wouldn't want to live without:
* No ex post facto laws.
* No bills of attainder
In other words, the congress is forbidden from using their power to make laws to punish people they don't like especially after the fact. That leads to the worst sort of tyranny. Any law crafted to target one individual (or a very smal group) is effectively a bill of attainder, even if it doesn't mention them by name.
Socialism: a lie told by totalitarians and believed by fools.
Back in 2007, Halliburton was making so much money off no-bid war-related contracts, it moved headquarters out of America in order to avoid paying taxes on all the money it was making from the US government.
Very clever Mr. Schumer!
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They aren't doing it to get Saverin after the fact.
They're doing it to make goddamn sure that nobody else gets any similar ideas.
Rather like the Berlin Wall, or other forms of capital controls. If Atlas starts to shrug, you chain him down.
If a guy leaves because he has to pay $67 million after earning $4 billion then he doesn't deserve citizenship.
It was the 'system' who allowed him to earn that money in the first place.
No sig today...
Don't smoke, don't feed the homeless, don't pick which lightbulb you like, etc., etc.
Your own food is too fatty, salty, etc.
Liberals don't believe in a right to privacy except for the sexual sphere of life. They are busybodies par excellance.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
If he gave up his citizenship, he is no longer a citizen of the US and gets none of it's protections. He is not being charged with a crime after the fact, he is just not getting back into the country he renounced.
Taxes are for the poor and the ignorant. The tax laws are written by wealthy law-degree wielding politicians and their corporate campaign contributors. There are no "accidental" loopholes. If you are middle class, live frugally all your life, you are sooner or later going to be in for a rude awakening. If you are an emerging rap star, athlete, lottery winner, or you inherit your great uncle's farm, you are going to get nailed. But if you come from wealth, or if you come into wealth through scheming, nepotism, and bribery, then you likely know how important it is to have a good wealth management company, tax advisor, and asset protection attorney. This is why you read about rich people declaring bankruptcy and then buying out some multi-million dollar company in just the next year. At some point your wealth grows to such an extreme point that you must protect it from the greedy masses of democratic societies. This is the world where you
incorporate in the Cook Islands
bank in the Cayman Islands
maintain residence in Monaco
maintain citizenship in Switzerland
register your yacht in the Bahamas
spend most of your time traveling the Caribbean and Pacific Islands
It doesn't hurt to befriend a lonely and isolated dictator or two.
Investment income is the reward you get by risking your money by investing in a business. Investing in a business gives them capital to buy assets and hire employees.
It is not something that should be discouraged, unless your myopia extends to economics.
But the real engine for progress is work, not investment money. Capital by itself doesn't do anything without somebody to use it. However, the people actually doing the work are taxed more on their income than the people who provide the capital, even though they're the actual real creators.
Nobody denies investment is necessary. I don't however think it's economically or morally superior to live from investments rather that do good honest work. That's why I think taxing income from investment less than income from work is a bad moral choice, and provides all the wrong incentives for society. I mean, what would happen if capital income would be taxed equally to income from work, or perhaps even more? Would the rich stop investing, would they be, as you say, "discouraged"? This won't happen, or they'll lose their capital to inflation. What will happen is more money would go to the real creators, who would then be able to create more - or maybe some of the formerly idle rich would have to enter the work market themselves and actually become productive. Either way the society would be better off, so I can't really see where the bad part is.
The government is effectively paying him $67M to take $4B and invest it in Singapore instead of the US.
More power to him, so long as the government is insisting on getting paid AMT or capital gains now on unrealized income from an appreciated investment which hasn't been sold.
The problem is that they want their poind of flesh now, rather than waiting for it to turn from an investment into "mall money" (money you can take down to the mall and spend).
I knew, though not well, a Netscape guy who was a paper multimillionaire when the Netscape IPO happened. In order to make it a long instead of a short term capital gain, and thus pay less tax, he did an exercise and hold, rather than a same day sale. Then the .bomb happened and the stock price tanked. So there he was with a couple hundred thousand in share value, and the government wanted their 35% of the $27M they valued it at at the time the options were exercised.
Eventually he killed himself, rather than going to Federal (debtor's) prison for tax evasion, since you can't dismiss taxes owed through bankruptcy.
Capital gains taxes as a matter of public policy are potentially defensible, even though they make you pay taxes on an investment of after-tax income and therefore amount to a surtax, but AMT is just asinine: the government can wait to get its money until I get my money.
-- Terry
You've lost me. An American drop owns something ... somewhere .. that doesn't appear in the sentence. And some unnamed neuter object (perhaps the one that just went missing) has (or is) most excellent.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Why are they safer in Luxembourg? A typical English football crowd could pwn their army, nick their Porsches and drain their wine cellars in about 15 minutes.
Unless the Belgians came to their aid.
Then it'd only take 10, drrrrrTISH.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Small government? Small government gave us Love Canal, the Housing Crisis that only took down the entire U.S. economy and gave the world's economy the flu, Enron, the toxic sludge flood in West Virginia from the Martin County Coal Corp., L.A.'s air quality before the EPA forced them to clean it up, etc...the list is quite long.
Small government means no FDA to make sure your prescription isn't ground up beetles. It means no high fund to fix the interstate network's bridges (yep, those states are going to get right on top of that one). No NTSA to do post mortems on plane crashes because you can always trust the airlines with your safety. No SEC to make sure you aren't buying that swamp land masquerading as a gold fund.
Grandma doesn't get her SS check, you know the one, the one that prevents her from having to move in with you. Grandma also won't get her medicare, you'd pick up her medical expenses for her, right? While we're at it, lets turn the mentally ill out of their group homes, you have some extra room in yours, right?
The list goes on. Fucking grow up already.
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