published Thursday, May 17th, 2012

Enemy of the economy

As deficit spending continues, with a Congress out of options and no leadership or discipline, the election of 2012 contains the call for "shared sacrifice" with the answer of proposed higher taxes by President Barack Obama and his fellow Democrats under the populist idea: Tax the rich.

The consequence?

This week, Facebook plans to offer 421.2 million shares of stock in an initial public offering at an estimated cost of $34-38 per share. That would raise almost $16 billion for the social media company.

As of April 30, one of the co-founders of Facebook officially renounced his U.S. citizenship. Eduardo Saverin, the first investor who provided early financing, was a Harvard classmate of Mark Zuckerberg. His share of the $96 billion company is four percent, which is projected to be worth up to $3.84 billion after the stock offering.

A spokesman for billionaire Saverin said, "Eduardo recently found it more practical to become a resident of Singapore ..." Singapore, by the way, has no capital gains tax, which would take 15 percent of Saverin's billion-dollar return.

You see, the Brazilian-born investor is among an ever-growing number of people who give up their citizenship to reduce their tax liabilities.

While America offers an environment rich in opportunity and the world's largest retail economy, the bloated government with no discipline to reduce our debt, restrain regulation and reform our tax policy is responsible for driving away wealthy citizens.

Without successful businessmen and women, along with their wealth, the American dream is destroyed. The current enemy of free markets and the opportunity to pursue prosperity is the federal government.

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Of course he's been in Singapore for two years, contributed nothing other than seed money to the company, and offers little to this country anyway. He isn't a successful businessman, he's a lotto winner.

But actually, if the government is bloated, why is employment in government dropping? And how do you expect the debt to drop without revenue increase? Why must tax policy be to give the rich more money to hoard? The federal government has been at the beck and call of the uber-rich for decades.

It hasn't helped the rest of the citizens. What do we deserve from our government? Can't we at least be protected from business fraud and corporate abuse?

May 17, 2012 at 12:27 a.m.
nucanuck said...

Any American with assets over two million dollars who renounces his/her citizenship must pay capital gains taxes on all holdings based on the values on the day of renunciation. Even if you haven't sold assets, you must pay.

Also, any American who renounces American citizenship to avoid taxes will have the renunciation rejected as an invalid reason.

Citizenship renunciation is rising because the US has made living abroad difficult for ex-patriots. Around five million Americans live outside the US, many for most or all of their lives. Most are regular working middle class people going about their normal lives.

A few years back the US passed a law requiring tax filing for all citizens wordwide, even if they had no US tax liability. Filing can easily cost several thousand dollars and failure to file can result in a fine up to $100,000 and/or ten years in prison.

The US government was trying to stop fat cat tax cheats and in so doing they have disrupted the lives of millions of ordinary people. Many are now considering renunciation.

BTW, famous Tennessean, Sir John Templeton renounced his US citizenship back in the 1960s and was later knighted by Queen Elizabeth.


Could anything be sillier than saying that the federal government is the enemy of the economy? Where did the TFP find this thinker?

May 17, 2012 at 1:47 a.m.
LibDem said...

This makes Eduardo Saverin something of a folk hero. Singapore provided the stable business environment in which he could make billions and now its army and navy will keep the world safe for him to enjoy his wealth.

May 17, 2012 at 8:16 a.m.
Livn4life said...

A man who has 3.84 billion dollars, does what he has to do. Talking that language is foreign speak for most Americans except...when class warfare continues to be the posture of one of our political parties. My question is if he renounces the citizenship and refuses to pay the taxes on what he had up to the day he renounced, do we send a Seal Team to bring him back?

May 17, 2012 at 8:56 a.m.
nucanuck said...

L4l,

The US State Department sends out the letter of acknowledgement of renunciation AFTER you have settled taxes on your entire net worth, not the day of renunciation. Until you you recieve that letter, you are still a US citizen.

Only the US and Mauritania require tax filing for all non-resident citizens. I know one divorced mother of two who works as a school secretary. She, like most non-resident US citizens, had not filed US taxes since marrying and leaving the states. She found herself owing more than $35,000 in penalties, thousands in preparation fees and yet, she owed no taxes. Millions of people like her no longer want the hassle and fear of dealing with the IRS when they have no tax liability.

Worst is the message that this policy sends to anyone considering US citizenship. One by one, the US is removing reasons well educated people might have to come to the USA.

May 17, 2012 at 9:58 a.m.
jesse said...

the simple solution is! CUT SPENDING AND RAISE TAXES on everybody!periot! we cannot JAWBONE ourselves out of this situation! i'm retired and have a part time job and i am makin it BUT IF we,as a country are to survive, there are some HARD TIMES commin! time to face up to the fact that the GOOD TIMES are past!(well the BEST times anyhow!)

May 17, 2012 at 12:18 p.m.
conservative said...

I can't blame the man at all, I guess I may have done the same had I been born in Brazil. He saw the future taxes he would have to pay to fund an ever increasing Socialist America ( that use to be a oxymoron ) and saved himself a lot of money.

May 17, 2012 at 3:48 p.m.
nucanuck said...

Many US corporations off-shore their business headquarters to avoid taxes. Why don't we rage against that?

May 17, 2012 at 4:07 p.m.
conservative said...

"Many US corporations off-shore their business headquarters to avoid taxes. Why don't we rage against that?"

I'ts very simple, a great many of the "we" want to avoid all the taxes "we" can.

May 17, 2012 at 4:21 p.m.

Buffett, the new tax masochist in chief still hasn't written that voluntary tax check... In fact, he still owes a BILLION dollars in taxes they can't seem to get him to pay. Smells like hipocritical boy cow poo to me. Conservative hit it right on the nose. Do as we say, not as we do.

May 17, 2012 at 4:32 p.m.

Livn4life, the US government informs/whoever is holding the money, or in this case, the stocks, that they'll be taking it.

Facebook doesn't want their IPO locked down under a judicial seal.

Nucanuck, people do. Or just state locations in the case of Microsoft. But they do have lots of money to influence elections. Color yourself surprised.

FPSE, keep arguing that Buffett issue, it just makes it look like you care more about mud-slinging than dealing with the problem. Stop trying to personalize it.

May 17, 2012 at 11:28 p.m.

And the Facebook IPO fizzles.

May 19, 2012 at 1:31 a.m.
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