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  • Facebook Billionaire Flees America for Lower-Taxed Shores

    Facebook’s much-vaunted initial public offering is on the horizon and promises to shower a few lucky individuals with millions if not billions of dollars. One of those Facebookers is the company’s billionaire co-founder Eduardo Saverin, who renounced his U.S. citizenship ahead of the IPO, potentially reducing his tax burden.

    Saverin, who was born in Brazil and is a resident of Singapore, holds a 4 percent stake in the company, which could be worth about $3.84 billion. Bloomberg reports that though Saverin won’t escape all U.S. taxes—he will still owe what is effectively an exit tax on the capital gains from Facebook’s stock holdings, even if it doesn’t sell the shares—he will enjoy the benefits of Singapore’s tax code. Namely, it doesn’t have a capital gains tax.

    While it’s unclear how much tax savings Saverin will realize from his decision to renounce his U.S. citizenship, his move highlights a very real problem for the United States. Bloomberg reports that a record 1,780 individuals gave up their U.S. passports last year, compared with 235 in 2008. The Cato Institute’s Dan Mitchell says this is part of a pattern that’s even being reflected across state lines here at home.

    There is a wealth of data on successful people leaving jurisdictions such as California and New York that have confiscatory tax systems.

    And there’s also lots of evidence of taxpayers escaping countries controlled by politicians who get too greedy. Mr. Saverin is just the latest example. And I suspect, based on the overseas Americans I meet, that there are several people who quietly go “off the grid” for every person who officially expatriates.

    The statists say these people are “tax traitors” and “economic Benedict Arnolds,” but those views are based on a quasi-totalitarian ideology that assumes government has some sort of permanent claim on people’s economic output.

    The Heritage Foundation’s 2012 Index of Economic Freedom shows that though the United States is known as the “Land of the Free,” America’s excessive tax burden makes it less economically free than other countries, putting it at a competitive disadvantage and convincing U.S. citizens to plant their feet abroad.

    One of the factors in weighing economic freedom is “fiscal freedom,” measured by analyzing the top tax rate on individual income, on corporate income, and on total tax burden as a percentage of GDP. In the United States, the top individual and corporate tax rates remain at 35 percent, on top of a capital gains tax and excise taxes, with the overall tax burden amounting to 24 percent of total domestic income. Compare that to Singapore, where the top income tax rate is 20 percent, the top corporate tax rate is 17 percent, and the overall tax burden is a mere 14 percent, and you can see why Saverin would be happier to lay down his financial roots in that country.

    America’s tax burden is set to get even worse beginning on January 1, 2013, when “Taxmageddon”—the largest tax hike in history—will clobber American taxpayers. Combine that with America’s growing debt and regulation, and you have a country where economic freedom is dwindling, especially when compared to countries like Singapore and Hong Kong.

    A billionaire like Saverin can afford to flee for greener pastures, but the rest of America isn’t so lucky.

    Posted in Featured [slideshow_deploy]

    28 Responses to Facebook Billionaire Flees America for Lower-Taxed Shores

    1. Rich Kamins says:

      How about that, one of the 99ers who made it to the 1% leaves the country…smart eh?

      • He'll be back, when it gets so dangerous out there in the "real" world where your wife and children can't walk down the street safely he be beginning to get back in…..Remember you pay taxes to maintain a stable society, if you don't want to pay your fair share then live in Mexico or anywhere else outside of the States Western Europe and Japan. Or another way of looking at it……If you want to keep your head pays your taxes.

        • David S Lesperance says:

          I am an international tax lawyer who has been expatriating Americans for over 2 decades. In all that time I have never had a single client express an interest in returning to live in the US. There are a number of countries such as Canada, Australia, New Zealand and most of Europe that have legal pre-immigration tax planning option which allow an ex-patriot to reproduce (or heaven forbid improve!) the personal and business lifestyle that they enjoyed in the US. I suggest that you google "Flight of the Golden Geese" before you rely on the "its bad and scary out there" strategy.

        • Daniel says:

          Er… you did look up Singapore before you made this post did you?

          Pity you didn't. I'd recommend it. Especially the part on the crime rate.

          Wow, what do you know? Low taxes AND low crime?

    2. Stirling says:

      The "Rich" are really the "canary in the coal mine" warning for the rest of the country. I say this because most successful people (of wealth) see the big economic picture, rather then the average person who only focuses on the small (personal) picture..

      It's similar to the 99% not being able to understand correctly the 1%'s role in being the job creators, and providers of prosperity for the rest of us. If the wealth leaves the country, everyone looses that remains, and since the government only "consumes" wealth (not creating it) it's revenues will decline with every single "Rich" person that leaves as well..

      • Roger S. says:

        Quite so! For those familiar with Ayn Rand's Atlas Shrugged: We are now well on our way to
        "Starnesville". Contrary to 99% notions, most wealthy people are not the brainless inheritors of
        wealth, nor mindless WStreet CDS speculators, but some really smart cookies who found ways
        to use opportunities abandoned or not yet noticed by others to create vast fortunes benefiting
        millions. They're getting tired of being "milked" for the privilege and having to endure being called
        names on top of it, for example by the likes of an Elisabeth Warren. Guess what: They're beginning
        to "Go Galt". More power to them, I say!

    3. jude richardson says:

      Singapore and Hong Kong are "countries" for economic convenience. In reality, they are merely cities. Maybe we should designate a midwestern city a separate "country" for the convenience of those entrepreneurs that would take their money elsewhere?

    4. Bobbie says:

      Who can blame them? Get out while the gettins' good. Previous presidents who didn't step into unconstitutional government, didn't interfere and left you freely on your own to develop personal merits! Hopefully the rich white people will go to! The government puts white people at any income level, through such an unfair and unequal tax burden for no fair reason. Oh wait, I forgot, 'fair' to Obama is doing anything he can to tear down white people. In his misled, wrongly educated mindset, his personal opinions taught as fact, far exceed truth and reality! Don't ever give into his personal opinions that aren't fact! I didn't get this understanding out of the American peoples constitution written by men who happened to have white skin, but Obama isn't a scholar to it's truth and would rather develop impressionable minds with weakness and falsities with his self pitied interpretation as fact! People look around, how can Obama's pathetic opinions, ever fly? there's been more than white people here since America started and if the American constitution is the way obama wants it to be, nobody but white would be here! AND Mr. Saverin billionaire would have NEVER COME TO BE! Obama and his attitude and unwillingness to consume truth, creates low self esteem and government dependency!

      Good luck Mr. Saverin! Proud America and your inalienable rights soon to be taken from us through the force of government, was able to give you the opportunity!

    5. JRSKK says:

      I am an American and proud of it. I don't think I could give up my citizenship for purely economic reason, but I understand why Saverin did it and don't hold it against him. We still live in a free society, sort of, except for taxes and regulations and etc.

    6. Richard Schramm says:

      This article does not provide any evidence that the person in question is leaving for the reasons claimed. In fact, he was a native citizen of Brazil. While the timing is interesting (pre-IPO), the burden of proof for the cause is on the author.

      There is evidence that America is loosing top talent to more lucrative markets. Markets with true mobility. See "America's Loss Is The Worlds Gain" which paints a grim picture. http://www.kauffman.org/uploadedFiles/americas_lo

      You note the number has increased since 2008 – OK – what happened in 2008? Why does the article not mention the increase maps to our economic issues? Taxes have not changed, and even if they were to, they would only go back to Clinton era tax rates when, as you recall, the economy was booming. It would be interesting to see if those leaving declined as the economy has recovered.

      GOP policies would not make this any better because, as noted, this is not about tax rates as claimed. History shows taxes on the upper bracket were over 50% for 63 of the past 100 years. Yet the change noted in the article above, and one referenced is recent when taxes have been significantly lower. How does the author explain the wealthy not leaving the U.S. when taxes were over 50% and as high as 92%? How does one explain this increase in renouncing citizenship when the upper bracket is up to 57% lower than previous highs and among the lowest of developed nations?

      Please respond and if necessary, correct this article to only reflect facts that can be proven.

      • Bobbie says:

        oh, you mean follow the example of Mr. Obama with the facts and evidence that back his words that's not there?

        • Richard Schramm says:

          Bobbie – that makes no sense. Please be specific – the thing Conservatives fear the most!

          • Bobbie says:

            To be specific I was responding to your last sentence. Still troubled? It's principle, Richard.

            For all the population increase in America, there's absolutely no reason to compete in tax increasings from years gone by. Proper governing would see it to decrease. But as the population amounts, so have tax exemptions for government discriminatory, bias reasons only.
            It's extremely unfair to allow tax exemptions for appearance reasons while increasing taxes on everyone else to make up the loss to increase unconstitutional discretionary spending that again if government was conducted constitutionally, discretionary spending wouldn't be extreme. Making sense yet? Sorry…

          • Bobbie says:

            Hopefully this time my reply will post, Richard. I'm specifically replying to your last sentence. Does that help? You'll have to open your mind wider if it doesn't…

    7. It's ridiculous that government thinks they know how to use our money better than we do. I'm moving from New Mexico, a poor state that imposes a personal income tax, partly because of the tax. My income is fixed, but the tax keeps going up. And this state also has a tax on medical doctors, which keeps them from coming or makes them move. I'm moving back to Tennessee where there isn't a personal income tax, though their state tax is higher. At least it's up to me whether I want to buy something or not.

    8. Ron Collins says:

      Taxes taxes taxes … make for more government government government and less personal freedom freedom freedom …28th amendment and a fair tax for all equally.

    9. Go ahead and tax them and watch them flee the country! they always find a way around paying taxes

    10. JustDamnMad says:

      And so the really BIG question is this: Will Warren Buffet continue to live in Omaha and pay less taxes than his secretary . . . . OR . . . . will he move to some foreign country and let Bill Gates worry about what to do with his estate while he lives high on the hog sipping pina caladas on some sandy beach and doesn't have pay his 30% anymore!!!!

      Just what EXACTLY did the American people think was going to happen when they CHEERED the administration on as they proposed that taxing the rich into oblivion was "the answer!" Well, it appears to me the administration KNEW what they were doing, but did the American people? They have been born and raised to believe they deserve something for nothing so they were easily duped into believing that "someone else" should share their hard-earned dollars. So now the first lemming has deserted America with MANY to follow . . . just like the POTHUS and his cohorts wanted!!!

      Ask yourself what happens when all the people who can afford to leave this country so they don't have to pay massive taxes . . . WHO will be left holding the bag for all the out-of-control spending that continues to grow exponentially every year????? GOTCHA . . . that would be the middle class and the poor, and sucker, that is YOU and ME!!!!! Welcome to the new Soviet States of America!!!!

      Are you better off today than you were FOUR years ago?? Ask yourself that question BEFORE you go into that voting booth in November and perhaps cast the deciding vote for the success or failure of this country!

      • Roger S. says:

        Don't stop at four!
        Are you better off than 10 years ago ?
        20?
        30?
        How about this tidbit: Today's $ buys about 4 cents' worth of equivalent 1912 goods ? (Weiss research)

      • Richard Schramm says:

        your argument makes no sense. Taxes on the wealthy were above 50% for 63 of the past 100yrs. Republican President, and Five Star General Eisenhower raised taxes on the wealthy to a whopping 92% where they stayed for 10 yrs.

        The administration has maintained the Bush tax rate, even after they added trillions to our national debt. When they expire, taxes will go up to a whopping 39% on the upper brackets, a full 53% lower than under a Republican President.

    11. Perry,Oklahoma says:

      keep on taxing and spending all you want, give it all to the entitled that work not and in many cases never have.

      Where are you going to get the MONEY when you have reduced all of US to there level?

      \

      So keep on AMERICA, I will grow my own and harvest for my friends and family and not one drop shall I give to those that won’t work for it. Even in the old days Hobo’s chopped wood for a bit to eat.

      You sorry slovan examples of human life. You don’t deserve a damn thing except to go hungry if you do not EARN it. Can you not see that you have created your own slavery? theonly difference is you don not have to work, so stay poor and ungratful. I DO NOT care, you and only you can make a difference in Your life. So quit asking me to change mine for you.

      And the politiciations that support you should be hung as TRATORS of Freedom and America. Better yet good old tar and feathering, don’t forget there staff there even worse!

    12. Pingback: Facebook: Otro multimillonario huye de Estados Unidos en busca de menores impuestos | Heritage Libertad

    13. Roger S. says:

      In general, it may be said that the "exit tax" is an abomination;
      somehow reminiscent of the "Reichsfluchtsteuer", a tax charged
      in the 30's by Nazi Germany against the capital of emigrating Jews.
      It amounted to typically more than 90% of the value of their possessions.

      The underlying ideology was the same, too: "you and what you produced
      and earned are not yours, but belong first to the community, the state.
      The whole idea was and is the purest essence of Communism!

      Go Saverin! Do yourself a deserved favor: don't return. Not you are the traitor, but the State,
      the Government which violated its own original charter to protect your unalienable rights!

    14. Pingback: Jeanette Cajide: Facebook’s Saverin Has a New Conservative Fan Base | | DigaNewsDigaNews

    15. Pingback: Jeanette Cajide: Facebook’s Saverin Has a New Conservative Fan Base | WestPenn Journal

    16. Jeanne Stotler says:

      35 Years ago, I would go to a doctor and the cost for just an office visit was $20.00 which we paid, Insurance was meant for hospital, ER care, it covered x-rays, casting a broken limb BUT not everyday visit. My kids went to Parochail chool and the cot was $15 a month tuition, bus fare from out lying Virginia was $1.10, gas as $.29 a gallon, our mortage was under $100.00 a month, need I go on, today you are lucky to get a mortgage under $1500.00 and an office visit to a MD is around $80.00 and ER visit is going to cost you about $1000.00 ( 1972 this would have paid a week in patient (I have proof as DH was in hospital 4/1972 for a week) I went back to school in 1978 and Comm. coll. was $15.00 a credit hour, we need to bring cost down so education is affordabble, medical care affordable, the way to start is MAKE GOVERMENT smaller and open up to fair trade within professions and states.

    17. Kuni says:

      About that ““Taxmageddon”—the largest tax hike in history” lie: http://www.politifact.com/truth-o-meter/statement

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