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Facebook Government The Almighty Buck United States

Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO 911

Posted by timothy
from the my-country-right-or-holy-moley-look-at-this-bill dept.
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.'"
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Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

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  • by bobwrit (1232148) on Friday May 11, 2012 @09:25PM (#39975329) Homepage Journal
    Just to provide a little bit more information to this story, here are the requirements for citizenship in Singapore: http://www.ica.gov.sg/page.aspx?pageid=132 [ica.gov.sg]
  • Re:Unfair taxes ! (Score:4, Informative)

    by J'raxis (248192) on Friday May 11, 2012 @09:43PM (#39975463) Homepage

    And when they created it in 1913, it was 1%, and only on incomes over $3,000 ($65,331.57 in 2010 dollars). There was a single 6% "surtax" on incomes over $500,000 ($10,888,594.79).

  • by Jeff1946 (944062) on Friday May 11, 2012 @09:47PM (#39975489) Journal

    I looked up Singapore individual tax rates. Max out at 20% and 0% on capital gains. Looks like a good deal for him. I assume Calif will get some tax out of him too before he leaves. I assume he must have another citizenship already. Notice Singpore requires two years residency before you can be a citizen. Of course maybe there is a billonaire's exception.

  • by chill (34294) on Friday May 11, 2012 @09:52PM (#39975519) Journal

    You don't see real American rich people renouncing citizenship.

    Actually, the number was way up in 2011. A total of 1,780. It may not seem like a lot, but in 2008 it was 235.

    http://www.bloomberg.com/news/2012-05-01/wealthy-americans-queue-to-give-up-passports-in-swiss-capital.html [bloomberg.com]

  • by Anonymous Coward on Friday May 11, 2012 @09:54PM (#39975537)

    Very well, actually. Singapore passport is essentially the best to carry in terms of treatment and visa requirements, along with some European countries like Sweden and Norway.

  • Re:Vaya con Dios (Score:4, Informative)

    by ThatsMyNick (2004126) on Friday May 11, 2012 @10:01PM (#39975575)

    I am not sure why you guys refer to it as difficult. You can get a Green Card if you willing to invest half a million in the US (which is pennies for this guy). If you stay in the US for 4 years out of the last 5 years as permanent resident, you can get a citizenship. In fact if you have half a million, US is one of the easiest places to obtain citizenship.

  • by BZ (40346) on Friday May 11, 2012 @10:10PM (#39975625)

    According to http://en.wikipedia.org/wiki/Eduardo_Saverin [wikipedia.org] he's lived in Singapore since 2010. That makes it two years, and now he's renouncing his US citizenship. Coincidence? You decide! ;)

  • by Anonymous Coward on Friday May 11, 2012 @10:15PM (#39975645)

    Because Saverin is doing it for money and rightwinnutjob's family probably immigrated for other reasons? Standard of living, freedom of speech, freedom of religion, etc. etc. ? One is considered greedy, the other is not.

  • by outsider007 (115534) on Friday May 11, 2012 @10:25PM (#39975705)

    Rich people don't leave, but their money does. To the Cayman Islands. *grumble grumble mitt romney grumble*

  • by ArcherB (796902) on Friday May 11, 2012 @10:44PM (#39975821) Journal

    Ah yes, those evil Koch brothers. We need to get rid of those good for nothing bastards as soon as possible. Just look at the stuff they've done!

    From Wikipedia [wikipedia.org]:

    He is a major patron of the arts and had contributed to several charities, including Lincoln Center, Sloan Kettering, a fertility clinic at New York-Presbyterian Hospital and the American Museum of Natural History's David H. Koch Dinosaur Wing.[8] The New York State Theater at Lincoln Center, home of the New York City Opera and New York City Ballet was renamed the David H. Koch Theater in 2008 following a gift of 100 million dollars for the renovation of the theater. Condé Nast Portfolio described him as "one of the most generous but low-key philanthropists in America" ...
    Koch contributed $7 million to the Public Broadcasting Service (PBS) show Nova,[30] and is a contributor to the Smithsonian Institution in Washington, D.C., including a $20 million gift to the American Museum of Natural History, creating the David H. Koch Dinosaur Wing and a contribution of $15 million to the National Museum of Natural History to create the new David H. Koch Hall of Human Origins, which opened on the museum's 100th anniversary of its location on the National Mall on March 17, 2010.[31] In 2012, Koch contributed US&35 million to the Smithsonian to build a new dinosaur exhibition hall at the National Museum of Natural History.

    Guess you need to stop watching Nova. Hope you don't plan on visiting any museums or taking in a show in NY.

  • by Mistlefoot (636417) on Friday May 11, 2012 @10:46PM (#39975831)
    Maybe there is a real reason.

    He was born in Brazil and lived there until he was 9. He has not lived in the US since 2010. He renounced his citizenship in September 2011 long before the IPO was announced, although I am sure he knew the direction.

    He is still a Brazillian citizen. If he has to pay US taxes based upon his citizenship wouldn't he also need to pay Brazillian taxes based upon his citizenship as well?
  • by Anonymous Coward on Friday May 11, 2012 @11:34PM (#39976107)

    Um, Singapore has a massive welfare program, even though the conventional wisdom (even there!) is that it's all free market.

    First all, over 80% of all housing in Singapore is government housing. They build it, then sell it at below market rates (significantly below market rate) to families. This is a massive redistribution of wealth. After 5 years you can sell your gov't condo on the free market and make a bundle (millions in too many cases to count).

    All Singaporeans are required to contribute 36% of their income to the Central Provident Fund. They use this for retirement, healthcare expenses, and purchasing homes. What people don't realize is that there are massive gov't subsidies into the healthcare system which to help people pay for healthcare. A poor Singaporean may only be paying 20% of their healthcare expenses out of their CPF account, with the gov't kicking in 80%. Yet everyone is still convinced that it's 100% free market. Same thing happens with housing. You can use your CPF fund to buy housing, but the gov't will also kick in $50k+. That's another massive redistribution of wealth.

    Singapore has a massive welfare state. It's just doesn't seem like it because their redistribution model is different than that used in the USA and Europe, and there's less poverty because the economy does so well (thanks in no small part to drawing in rich billionaires, which jack up property prices, which inures to your average Singaporean because of the gov'ts housing policies).

  • by Sycraft-fu (314770) on Friday May 11, 2012 @11:41PM (#39976159)

    The US makes it very easy to keep a US citizenship. To renounce it you have to do so in front of a US consular officer, and with the full intent of renouncing your citizenship. Any other way isn't valid. So if another country as part of their immigration process say "Give us your passport and say you renounce your US citizenship," you can do so and it doesn't matter. You can go to the US embassy and get a new passport later. The US doesn't consider their ceremony valid, they consider you still a citizen. Of course when it comes to US citizenship, the only opinion that matters is that of the US.

    Also other than taxes, there aren't really any burdens of staying a US citizen. They don't require you to show up twice a year to praise the president or something. You can have the citizenship and it is just something you have. Taxes also aren't a problem, if you aren't trying to get out of them. If you live in another country, work there, and pay taxes there, you are fine. The US is a-ok with that, they don't want a cut.

    They only go after taxes when people are clearly trying to dodge taxes that they'd otherwise owe. They don't want rich people to make a ton of money in the US but technically live in Barbados and not pay any taxes.

    So really the only reason to formally and actually renounce a Us citizenship are:

    1) If a country you are immigrating to actually makes you do it properly, to a US council. Of course even then who knows because that would be done in the presence of the US council and they might decide it was bullshit since you were forced.

    2) If you really dislike the US so much that as a statement or personal moral matter you just can't keep your citizenship. Fair enough, but of course then you'd better be sure.

    3) To evade taxes. In that case, fuck you.

    Otherwise, people keep it. My parents moved to Canada like 5 years ago. Mom is from there, so Canadian of course, but got her US citizenship when she lived here. Dad was born in the US, and recently got his citizenship up in Canada. Neither renounced their US citizenship and neither are going to. Why would they? Nor a I renouncing my Canadian citizenship, though I live in the US. I can keep both and it is no big deal.

  • Re:Unfair taxes ! (Score:5, Informative)

    by Myopic (18616) * on Friday May 11, 2012 @11:56PM (#39976247)

    Whereas today, 3% net. Or, if you are GE, zero net, plus billions back. What's your point again?

  • by Anonymous Coward on Saturday May 12, 2012 @12:24AM (#39976431)

    Yep, I see you didn't cover inflation at all! Or even in the increase in population, as the other poster just mentioned. Maybe you think more can be done with fewer people, but that's not always true. Sometimes that is a bad idea.

    Sorry, but there's a reason why I mentioned both things. You obviously don't care to be honest, you'd rather just stick to your deceptions. Ron Paul is not telling something that is accurate. He may be making claims that he believes are true, but they are poor calculations, and that's not an improvement. That's actually a sign he's not thinking of the situation in a comprehensive fashion.

    And yet you're trying to blame me for bringing up irrelevant statistics...for shame. You're the one lying here, since if you were at all honest, you'd recognize what matters, and you surely aren't so incompetent as to not even consider inflation. Let alone break not out the mandatory spending. Heck, you didn't even mention Social Security taxes, which ARE counted in the budget, especially in the number you used for revenue. In fact, 959 billion at Wikipedia. That's right, most of what you're talking about being left over is actually from Social Security taxes. My word, do you not even realize how bad your accounting actually is?

    Heck, just add up what's listed on your own source's page:

    Total receipts:
    Item Requested
    Individual income tax $1359 billion
    Corporate income tax $348 billion
    Social Security and other payroll tax $959 billion
    Excise tax $88 billion
    Customs duties $33 billion
    Estate and gift taxes $13 billion
    Deposits of earnings and Federal Reserve System $80 billion
    Other miscellaneous receipts $21 billion
    Total $2902 billion

    Please add up the excise taxes, customs duties, estate and gift taxes, Federal reserve deposits, and miscellaneous.

    Nice, figure, huh? Apparently you'd rather Social Security be purposed entirely to fund every other role in government.

    If Ron Paul came to my house with such nonsense, I'd be calling somebody in Congress to check his sanity.

  • by TarPitt (217247) on Saturday May 12, 2012 @12:33AM (#39976477)

    I would mod you up, but here are a few choice quotes from Wikipedia:

    In Singapore, under the Public Order Act 2009, outdoor public processions or assemblies require police permits. Without police permits, such outdoor assemblies are illegal.[40] Indoor assemblies, however, can be held freely without the need to apply for police permits.[41] The only place in Singapore where outdoor public assemblies do not require police permits is at the Speakers' Corner which is modelled on Hyde Park, London. However, one must still register one's personal details with the National Parks Board online before speaking or protesting at the Speakers' corner, and there are also many CCTVs in the park, a situation that had some Singaporeans and Singaporean MPs complaining

    ...

    Acute poverty is rare in Singapore; the government has rejected the idea of a generous welfare system, stating that each generation must earn and save enough for its entire life cycle. There are, however, numerous means-tested 'assistance schemes' provided by the Ministry of Community Development, Youth and Sports in Singapore for the needy, including some that pay out SGD 400 to SGD 1000 per month to each needy household, free medical care at government hospitals, money for children's school fees, rental of studio apartments for SGD 80 a month, training grants for courses, etc.[97][98][99]

    ...

    Education for primary, secondary, and tertiary levels is mostly supported by the state. All institutions, private and public, must be registered with the Ministry of Education.[172]

    ...

    The government's healthcare system is based upon the "3M" framework. This has three components: Medifund, which provides a safety net for those not able to otherwise afford healthcare, Medisave, a compulsory health savings scheme covering about 85% of the population, and Medishield, a government-funded health insurance scheme.[189] Public hospitals in Singapore have autonomy in their management decisions, and compete for patients. A subsidy scheme exists for those on low income.[192] In 2008, 31.9% of healthcare was funded by the government. It accounts for approximately 3.5% of Singapore's GDP.[193]

    So we have limitations on public freedom of speech (including government registration of all speakers), a compulsory government education system, an extensive social safety net, and mandatory government required healthcare savings.

    And somehow Slashdot "libertarians" believe moving from the USA to Singapore is "going Galt"?

  • by Taco Cowboy (5327) on Saturday May 12, 2012 @12:35AM (#39976489) Journal

    You are full of shit and you know it

    The government of Singapore builds flats for its people not because the government of Singapore likes to, but it had to

    Singapore has a very limited amount of land mass - it's an island state

    To accommodate the 3 million plus people living on that little island the Singaporean government had to build flats for them

    As to the selling price of the flats - the way you imply it is patently false.

    Yes, the price the government of Singapore sells the flats to Singaporean citizens are - "way belong market price" - but HIGHER THAN THE COST OF CONSTRUCTION AND LAND

    Yes, Singaporean government does make a PROFIT while carrying out that "massive welfare program"

    When was the last time the government of the United States of America makes a profit in its own welfare program ?

  • by bkmoore (1910118) on Saturday May 12, 2012 @01:11AM (#39976649)

    If you are a U.S. citizen who lives and works in a foreign country, you are required to file a Form 2555 with your federal income tax return. You only claim income after foreign taxes. The exclusion for single filers is $92,900 in 2011, for married couples it is around 190,000. There are additional deductions for housing expenses, etc. Then you get the standard deductions for yourself and dependents. In my case, I would need to be pulling in well over 200K after foreign taxes per year to owe the IRS. Most normal Americans who work in foreign countries probably won't owe the IRS any taxes.

    Another thing to consider, is if you renounce your citizenship it will not be possible to return to live in the U.S. If it's about saving some money on a tax bill now, it's probably short sighted. Make sure the country you have chosen to immigrate to respects individual property rights. If they don't, you might end up getting disenfranchised after the next popular revolution and don't expect the U.S. to be any help. Most countries that do respect individual property rights, e.g. western Europe, Australia, Canada, etc. have equivalent or higher tax rates than the U.S.

  • Re:Wimp (Score:5, Informative)

    by slew (2918) on Saturday May 12, 2012 @02:50AM (#39977061)

    Contrary to popular belief, there is no death tax. It's an inheritance tax. With proper estate planning, if you give all of your assets when you die to a charitable trust instead of trying to give it to your heirs, there is essentially no tax to you (you are dead) and the charity gets the full benefit of your estate. There is effectively only a tax to give the money to someone who generally would owe income tax (say like your kids who are still alive or a company). Of course when you are alive, and you give a substantial amount of money (above the gift limit) to someone who owes tax they have to pay tax on that windfall (although the income tax rate they would pay would generally be lower than the 55% estate tax rate).

    One rationale of an estate tax is to effectively "withhold" the taxes from the deceased (kinda like how a casino or lottery needs to withhold taxes from prizes even though technically they would otherwize be able to give all the money to the receipent as the recipent owes the taxes, not the payer of the prize), the government knows that the recipient may spend all the money and then not be able to pay the taxes and they can't get blood (taxes) out of a (broke) turnip...

    The other rationale of estate tax is to prevent the creation of dynasties of wealth like royalty that never have to work.

  • by Malc (1751) on Saturday May 12, 2012 @03:42AM (#39977241)

    Probably not, unless Brazil is as fucked up as the US with regards to taxing non-domiciled citizens. Ironic and hypocritical [wikipedia.org] concerning the how the country came about.

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