Facebook's Severin renounces US citizenship to lower taxes

[Infohawk]

http://www.bloomberg.com/news/2012-...erin-gives-up-u-s-citizenship-before-ipo.html

Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO.

This story is interesting on several fronts. First, people talk about tensions between different countries, but there clearly is a growing international capitalist and cultural elite where borders don't really matter. These people wield immense power and Severin will continue to have more power in America than most Americans.

Second, this may be an example of a trend where recent immigrants to the US are not really interested in staying in the country long-term. (A more common example is students at universities returning to Asia but there are others: http://www.nytimes.com/2012/04/16/u...immigrants-are-leaving-us.html?pagewanted=all) Fundamentally, we have to ask if we really want to share citizenship with people that don't seem to have a strong commitment to being here. In some cases (not Severin obviously) we are actually investing in their education and not getting any rewards for it.

Finally, it's clear we have to change out tax system. I don't think Facebook could have come about outside the US at this point in history. The fact that this guy can benefit from the entire US legal and economic framework and simply lower his obligations by leaving the country is a bit silly.

 

[nehalem256]

Maybe their should be a law that if you renounce US citizenship you are not allowed to set foot in the US again. If you dont want us, we dont want you so to speak.

 

[RbSX]

Maybe their should be a law that if you renounce US citizenship you are not allowed to set foot in the US again. If you dont want us, we dont want you so to speak.

LOL

 

[monovillage]

Tough to blame a guy for obeying the law.

 

[werepossum]

http://www.bloomberg.com/news/2012-...erin-gives-up-u-s-citizenship-before-ipo.html



This story is interesting on several fronts. First, people talk about tensions between different countries, but there clearly is a growing international capitalist and cultural elite where borders don't really matter. These people wield immense power and Severin will continue to have more power in America than most Americans.

Second, this may be an example of a trend where recent immigrants to the US are not really interested in staying in the country long-term. (A more common example is students at universities returning to Asia but there are others: http://www.nytimes.com/2012/04/16/u...immigrants-are-leaving-us.html?pagewanted=all) Fundamentally, we have to ask if we really want to share citizenship with people that don't seem to have a strong commitment to being here. In some cases (not Severin obviously) we are actually investing in their education and not getting any rewards for it.

Finally, it's clear we have to change out tax system. I don't think Facebook could have come about outside the US at this point in history. The fact that this guy can benefit from the entire US legal and economic framework and simply lower his obligations by leaving the country is a bit silly.

I generally have a fair bit of rage toward those who renounce their citizenship to dodge taxes. I have a bit of sympathy toward those who are moderate wage ex-pats just overwhelmed by the paperwork and potential penalties, but none toward people like Severin. Income earned from a US-based corporation should be fully taxable for everyone, of any nationality, and income earned in another country should not be taxable at all.

I would certainly support a stiff tax on money taken out of the country though, whether via money order or via bank transfer.

Maybe their should be a law that if you renounce US citizenship you are not allowed to set foot in the US again. If you dont want us, we dont want you so to speak.

I'd support that.

 

[Infohawk]

I have a bit of sympathy toward those who are moderate wage ex-pats just overwhelmed by the paperwork and potential penalties, but none toward people like Severin.

It's an important distinction. There are some people who would prefer not to but feel obliged to because of bureaucratic reasons and / or legitimate financial reasons. IIRC, if you make more than about 100,000K outside of the country you start to have to pay some US taxes (in addition to your host taxes!). They really need to push that number up to say at least $500,000 and make it inflation-adjusted.

 

[Theb]

Maybe there should be a law that if you renounce US citizenship you are not allowed to set foot in the US again. If you dont want us, we dont want you so to speak.

Yeah, that'll show them.

 

[BoberFett]

I don't think Facebook could have come about outside the US at this point in history. The fact that this guy can benefit from the entire US legal and economic framework and simply lower his obligations by leaving the country is a bit silly.

That's a pretty ignorant, nationalistic statement. The US is quickly losing ground as the technological world leader. Our legal and financial status is a mess. The government doesn't like you? Whoops, DHS has shut you down! I wouldn't blame anyone for choosing to avoid starting a business here.

 

[Anarchist420]

I blame the government, not him. It may not be fair, but I'm glad the government won't have the revenue.

Even if I wasn't an anarchist, I'd say the government should make concessions to all (i.e., replace the current tax system with a confederal tax system) before it sends him to jail.

 

[Infohawk]

That's a pretty ignorant, nationalistic statement. The US is quickly losing ground as the technological world leader. Our legal and financial status is a mess.

I specifically stated that at this point in history, that Facebook had to start in the US. I don't think there's anything intrinsically better about Americans but right now it's the place to have an internet startup. People primarily start manufacturing companies in the third world because of labor problems. And there are tons of bureaucratic issues with starting companies in places like that. If you're talking about other first world countries, the US is generally less bureacratic and more business friendly. There might be small exceptions like with Australia and Canada but you still see the bulk of startups in the US, where most of the action is anyway. That may change, but I'm talking about the present and the recent past.

The government doesn't like you? Whoops, DHS has shut you down!

Sounds like some weird anti-government rant now...

I wouldn't blame anyone for choosing to avoid starting a business here.

That is totally irrelevant to this story (he did start Facebook here) and actually contradicted by the basic history of Facebook which shows you can make tons of money starting a business in the US.

 

[yllus]

If you think the free market is where it's at, you should recognize this as it in action. An actor in the market has decided that the cons of American citizenship outweighs the pros for him. Now it's up for debate as to whether it's worth changing legislation to bring people at his wealth level back.

 

[Infohawk]

If you think the free market is where it's at, you should recognize this as it in action. An actor in the market has decided that the cons of American citizenship outweighs the pros for him. Now it's up for debate as to whether it's worth changing legislation to bring people at his wealth level back.

That is not the only question you can ask. Like I said, one question is generally whether we want to give certain people citizenship in the first place (this is different than allowing someone to invest or do business in the US). The most important question though is how to structure US taxation so that non-citizens don't get a discount. The bottom line is if you make money from the US, you should pay the same amount in taxes that a US citizen does.

 

[BoberFett]

Anti-government rant? Apparently you aren't paying attention. SOPA. CISPA. The MPAA and RIAA trying to gain iron fisted control over all content. Internet startups are probably smart to start outside of the US.

Oh, and how's this for a rant?

http://www.tomshardware.com/news/DHS-ICE-DOJ-Child-Porn-Domain-Seizure,12216.html

Yeah, that's good for business.

"Sorry internet customer, the business website you have tried to reach has been shut down because they hosted kiddie porn."

Good luck recovering from that.

 

[CanOWorms]

Good for him. People act as if American citizenship is some holy thing. It's not. We have millions and millions of American citizens in this country who are just plain not assimilated into modern American society. Yet they're American citizens just because their ancestors came here from the Mayflower.

 

[Infohawk]

Anti-government rant? Apparently you aren't paying attention. SOPA. CISPA. The MPAA and RIAA trying to gain iron fisted control over all content. Internet startups are probably smart to start outside of the US.

Oh, and how's this for a rant?

http://www.tomshardware.com/news/DHS-ICE-DOJ-Child-Porn-Domain-Seizure,12216.html

Yeah, that's good for business.

"Sorry internet customer, the business website you have tried to reach has been shut down because they hosted kiddie porn."

Good luck recovering from that.

All first world governments are having similar issues. Australia with its video game bans is one example. Most governments have even more stringent privacy protections than the US which hurts the ability make money for a lot of these companies. You want to go third world? Talk about what the Chinese do to their internet. The US is still a solid place to do business. Anyway, that will be my last comment on that issue since the thread is not really about where people should start web businesses. Saverin started one here and made billions.

 

[dmcowen674]

The key point is the money flow out of the U.S.

You know where that is heading.

The great Nostradaveous

 

[werepossum]

It's an important distinction. There are some people who would prefer not to but feel obliged to because of bureaucratic reasons and / or legitimate financial reasons. IIRC, if you make more than about 100,000K outside of the country you start to have to pay some US taxes (in addition to your host taxes!). They really need to push that number up to say at least $500,000 and make it inflation-adjusted.

IIRC the latest big increase was due to new requirements that every ex-pat file and the substantial penalties for not doing so - you could owe no taxes but face fines and even prison time if you don't file or don't file correctly. Regardless, I don't think any income earned out of the country should be taxed by the country. I'm much more concerned with money flowing out of the American economy than with whether or not someone might be getting rich in another country and I'm not getting a piece of it.

 

[glenn1]

Facebook's Severin renounces US citizenship to lower taxes

We're quickly finding what the market value of U.S. citizenship is via these people renouncing it. Seems like the value proposition of those government services vs the taxes paid isn't quite as high as progressives seem to think it is.

 

[bfdd]

Maybe their should be a law that if you renounce US citizenship you are not allowed to set foot in the US again. If you dont want us, we dont want you so to speak.

Then lets also change it so if any other nation wants foreign aid or anything to do with our tax dollars they can file to become a territory then file for state hood.

BTW you guys realize they added a fee into filing this now right? It costs 450 dollars just to file the paper work to get rid of your citizenship. It's bogus that we're "slaves" to the government in this sense, they OWN your citizenship and you have to buy it off them. Fucking assholes keep wanting to perpetuate our dickholish Federal system as well. Assholes.

 

[WelshBloke]

...

I would certainly support a stiff tax on money taken out of the country though, whether via money order or via bank transfer.


...

Thats going to make international trade interesting.

 

[werepossum]

Thats going to make international trade interesting.

Yeah, it's probably not workable, just another tax scheme that works on the Mexican illegal sending out $100 but not on the billionaire sending out $100 million. Makes me smile though.

 

[Infohawk]

We're quickly finding what the market value of U.S. citizenship is via these people renouncing it. Seems like the value proposition of those government services vs the taxes paid isn't quite as high as progressives seem to think it is.

If you take the global population, US citizenship IS very valuable to the vast majority of people. It loses value when you are super-wealthy and want to save money on taxes. But really, there's a certain amount of short-sidedness that comes into play here. In WW2, having the right citizenship could save your life. If Asia or Brazil goes into chaos, this guy might be clamoring to live in a country like the US.

 

[Murloc]

the US is the only country that is so backwards that they think they own their citizens.
They can kill them, they can tax them even if they reside abroad and thus use only consular services MAYBE.
Seriously that's a joke. How can nationality be so important?
Also the second answer is completely flawed: what if you didn't choose? what if you were born with double citizenship? you don't have the right to a choice?
You're just like muslims who want to kill apostates. Exactly the same thing.

Paying taxes in a country you don't reside in can't be justified. I mean, what is the probability that you need an airlift that americans will provide only to their citizens or something like that?
We're talking about a business guy, not some african mining lord.

 

[Jaskalas]

the US is the only country that is so backwards that they think they own their citizens.
They can kill them, they can tax them even if they reside abroad and thus use only consular services MAYBE.
Seriously that's a joke. How can nationality be so important?
Also the second answer is completely flawed: what if you didn't choose? what if you were born with double citizenship? you don't have the right to a choice?
You're just like muslims who want to kill apostates. Exactly the same thing.

Rich people are required to maintain the system. If they all suddenly feel like they can leave...

 

[Abraxas]

I'd fully support amending our tax code to bleed people like this dry. When you make a fortune through using the system built by the taxpayers of US but decide to skip on the bill when it comes your turn to pay, I think it only fair you get reduced to the level you were at before you gamed the system.