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Schumer Wants To Ban U.S. Citizenship-Renouncing Facebook Co-Founder
By
Jen Chung
Published May 17, 2012
Modified May 17, 2012
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By
Jen Chung
Published May 17, 2012
Modified May 17, 2012
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Listen, Eduardo Saverin, you may have co-founded Facebook and you may have renounced your U.S. citizenship in anticipation of tomorrow's big IPO day, but there's something you're not familiar with: The wrath of Senator Chuck Schumer. Chuck and Senator Bob Casey of Pennsylvania are looking into ways to bar tax dodgers like Saverin. Schumer said today, "Saverin has turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire. This is a great American success story gone horribly wrong... Sen. Casey and I have a status update for him: Pay your taxes in full, or don't ever try to visit the U.S. again."
Saverin was born in Brazil, but moved to the U.S. in 1992. He now lives in Singapore last year and Bloomberg News noted, "Besides helping cut tax bills stemming from the Facebook, the move may also help him avoid capital gains taxes on future investments since Singapore doesn’t have a capital gains tax." It's believed that Saverin could save up to $67 million. His spokesman explains that Saverin's move was motivated by his goal to invest around the world, "U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts. Many foreign funds and banks won’t accept Americans. This was a financial rather than a tax motive." And Saverin himself released a statement:
“My decision to expatriate was based solely on my interest in working and living in Singapore, where I have been since 2009. I am obligated to and will pay hundreds of millions of dollars in taxes to the United States government. I have paid and will continue to pay any taxes due on everything I earned while a U.S. citizen. It is unfortunate that my personal choice has led to a public debate, based not on the facts, but entirely on speculation and misinformation.
“As a native of Brazil who immigrated to the United States, I am very grateful to the U.S. for everything it has given me. In 2004, I invested my life’s savings into a start-up company that initially was run out of a college dorm room. Since then the company has expanded dramatically, has created thousands of jobs in the United States and elsewhere, and spawned countless new companies across the United States and other countries.”
Senator Casey said, "This guy just thinks he can rip us off by engaging in this scheme. We’ve got troops overseas that are sacrificing on our behalf every day, all the values that we hold dear. And Mr. Saverin spits in their eye, he spits in the eye of the American people. It’s an insult. He should be held accountable."
Facebook's initial public offering is set for tomorrow, with the stock price set at $38. The sale is expected to raise $16 billion and value the company at $100 billion. Here are details of Schumer and Casey's "Ex-PATRIOT Act (“Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act)":
Under the proposal, any expatriate with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for tax avoidance purposes. The individual will then have an opportunity to demonstrate otherwise to the IRS by meeting specific IRS requirements. If the individual has a legitimate reason for renouncing his or her citizenship, no penalties will apply. But if the IRS finds that an individual gave up their passport for substantial tax purposes, then it will prospectively impose a tax on the individual’s future investment gains, no matter where he or she resides.
Tagged
bob casey
chuck schumer
citizenship
eduardo saverin
money
tax dodging
taxes
wall street
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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