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Facebook Government The Almighty Buck United States

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

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]
  • Wimp (Score:5, Funny)

    by Greyfox ( 87712 ) on Friday May 11, 2012 @09:30PM (#39975367) Homepage Journal
    He should have had his heart stopped prior to the IPO and restarted thereafter! That's right! I'm suggesting that he should have spent the IPO dead! For tax purposes! What a glorious dodge that would have been! Renouncing your citizenship... Pfft!

    Of course, now that I think about it, he might have had to spend an entire year dead to realize any tax benefit from it. I'm sure you could manage that sort of thing when you're worth a few billion dollars!

    • Re:Wimp (Score:5, Funny)

      by outsider007 ( 115534 ) on Friday May 11, 2012 @09:35PM (#39975407)

      It's the same dodge Walt Disney's been up to.

    • Maybe he could alternate between a medically-induced coma and having his heart stopped, each for as long as it could be safely done before switching. He would alternate between being "brain dead" and "clinically dead" for a whole year and then completely revived to collect his money. Since he's rich, I'm sure the American government would allow it.
  • sucks for his kids (Score:5, Interesting)

    by Trepidity ( 597 ) <delirium-slashdot@nosPAM.hackish.org> on Friday May 11, 2012 @09:38PM (#39975425)

    On the plus side, they'll have more money. On the negative side, they won't have a very useful citizenship (EU and US citizenships are basically the most favorable ones to hold). And on the even more negative side, they're now required to two two years of military service, plus report once a year for military reserve training up until they reach the age of 40. (Saverin himself is exempt because first-generation immigrants aren't required to do the service; only their children are.)

    Personally I'd rather pay some taxes than condemn my kids to years in the military, but perhaps he has other priorities.

  • fair enough. (Score:5, Interesting)

    by gbjbaanb ( 229885 ) on Friday May 11, 2012 @09:42PM (#39975451)

    when $3.84 billion just isn't enough...

  • by RightwingNutjob ( 1302813 ) on Friday May 11, 2012 @09:45PM (#39975479)
    As an immigrant *to* the US, I feel insulted. My family worked quite hard to *get* US citizenship, and I know exactly why, and why it was worth it. People renouncing it to make a quick buck to me almost feels like selling their souls.
    • by Anonymous Coward on Friday May 11, 2012 @10:02PM (#39975579)

      Of course you know why and why it was worth it. You likely benefited by attaining US citizenship. If you didn't, you (or your family) likely wouldn't have bothered with the hassle.

      Saverin is going to benefit from relinquishing it.

      Why you feel insulted, I can't quite fathom.

    • by Cimexus ( 1355033 ) on Saturday May 12, 2012 @06:00AM (#39977593)

      It's not necessarily always people trying to make a quick buck.

      My wife is American but hasn't lived there since we were married (which was quite a while ago). She is considering giving up her US citizenship because once she makes more than a certain amount per year, she no longer falls under the foreign-earned income exemption and can actually end up getting double taxed (i.e. she pays her full local income tax, and then also has to pay income tax to the US on whatever she earns above the foreign-earned exemption limit. That is ridiculous, I'm sorry. Why would we do that if we didn't have to?

      America is the only country I know of (there may be some others, but not that I've come across) that tax you based on your citizenship, rather than your residency. If you're a US citizen, you have to file a tax return and potentially pay tax, even if you've not set foot inside the country in 50 years and have no financial affairs there whatsoever. That needs to change if they want to stop people randomly giving up citizenship for financial reasons.

  • 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.

  • Vaya con Dios (Score:5, Insightful)

    by Guppy06 ( 410832 ) on Friday May 11, 2012 @09:52PM (#39975523)

    I hope he doesn't live to regret his decision, as it's a hell of a lot easier to drop US citizenship than it is to get it back.

    • 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 Trepidity ( 597 )

        All that's true if you never had U.S. citizenship. If you renounced your U.S. citizenship and then show up again wanting it back, those paths are all closed.

    • If he has over 3 billion dollars, it's not going to stop him from living wherever he wants and doing whatever he wants.
  • by CohibaVancouver ( 864662 ) on Friday May 11, 2012 @10:00PM (#39975567)
    What a lot of anti-tax folks don't realize (or choose to ignore) is the fact that a tax regime that creates a civil society (educated, healthy populous, rule of law) in turn creates an environment that allows companies like Facebook to flourish. It's much harder to create wealth in an environment where your employees are illiterate, hungry and sick and corruption is rampant. Sure, you can drill oil wells or mine for gold, but you can't really create companies with IP in those environments. I guarantee you the next Apple or Google is not coming in Nigeria. Why do you think India is working so hard to create institutional change?
  • by Sycraft-fu ( 314770 ) on Friday May 11, 2012 @10:03PM (#39975583)

    Seriously, I have no problem with someone giving up their citizenship if there's a real reason. There's usually not though since the US is perfectly fine with you having another citizenship, if you have a second one (or more) they just only recognize your US citizenship for their purposes. I have a Canadian citizenship, as well as my US citizenship. Also renunciations only count in front of a US council, with the intent to renounce. So a foreign country can make you "renounce" it in their ceremony and it doesn't count as far as the US is concerned and of course they are the only ones who matter for that.

    However for people who do it to try and escape from taxes? Fuck them, put them on a permanent travel black list. No reentry to the US, ever. Since they dislike the US and its taxes to much, they are free to stay the fuck out.

    Particularly in circumstances like this, it is pure greed. At the level of billions you are not talking about something that makes a big difference in quality of life. 9 billion dollars lets you live basically just an opulent life as 10 billion. It really is the case that the more you make, the less it matters how much more you make. Him paying the taxes wouldn't be the difference between the good life and the poor house, it is the difference between being able to get gold plating on a massive yacht, or just have a massive yacht, to the like.

    So I say since he is telling the US he doesn't need them, they could say the same. Bar him entry. Maybe it won't matter, but I'm betting some day he'll want to visit for some reason.

  • Going Galt (Score:5, Insightful)

    by WOOFYGOOFY ( 1334993 ) on Saturday May 12, 2012 @08:25AM (#39977987)
    Nothing is worse than listening to Ayn Rand nose-candy freaks celebrate their common, mundane, shared, evolutionary impulse to be as greedy as possible at everyone else's expense as though it were some kind of advance in human moral reasoning and the basis of civilization itself.

    Yeah, society and the taxes that run it are a form of looting. I don't think he minded the looting that paid for the infrastructure he depended on every fucking day, and the teachers who educated the people he relied on to get work done, and the military that made sure he wasn't too busy doing the ole Sig Heil to bother with anything else and courts that and system of laws and enforcement of those laws that provided him with the legal framework he needed to make his money or the EPA who made sure he wasn't dead from dioxin exposure or all the other myriad of governmental services ..."looters" ... who made civilization possible and carry it forward on civil servant wages and the promise of a government pension at the end of a lifetime of service.

    This guy is a poster boy for the problems when people become so much more wealthy than the average person. They become selfish, uncompassionate and basically sociopathic.

    http://www.huffingtonpost.com/2012/04/10/rich-people-compassion-mean-money_n_1416091.html [huffingtonpost.com]

    Permitting these monsters to also hold influence proportionate to their wealth is where most of America's political and social problems come from. I don't give a fuck how tired you are of anything to do with anything "1%", what we have in America is an oligarchyy-kleptocracy being run into the ground economically, environmentally and morally by the scum who could give a shit about anyone or anything so long as he's got access to an all you can eat buffet of his favorite vices.

    The super-wealthy twist and distort the system so it works only for them and at everyone else's expense. That's a fact and anyone denying it is just living in a fantasy world in which they're in line to be the next billionaire.

    "I got mine, now watch me fuck you all. I don't need you,. and you can't touch me."

    That's about the most dangerous thinking process a member of society can develop.

    And yes, I do understand that programming and technology are areas that attract a higher than average number of such types. Let the mod down begin.

    Fuck you. Read history.

    Facebook may be a gigantic spy machine that induces the hapless and naive to surrender bit by bit most intimate details which are then assembled into a dossier to be used to suppress their own political, employment and economic opportunities so the rich can stay rich and keep the poor poor, but it's not going to save the rich from what comes when the system collapses in ecological and economic devastation . They'll share the same fate that all the past and present kings who thought of themselves as "untouchable"- and had better reason to consider themselves so- shared .

    How soon until we read about some vet-who-can't-get-treated-by-a-tax-starved-VA taking a six dollar .50 BMG from two klicks away and exploding this fucking narcissistic panty-boy-billionaire's head like a two dollar melon?

    Not soon enough. Ayn Rand's Galt character was just the (cardboard character, cartoonish) embodiment of the desire to have no obligations placed upon by society whatsoever, while of course being permitted

Never buy what you do not want because it is cheap; it will be dear to you. -- Thomas Jefferson