Democratic Senators Unleash Tax Vendetta Against Eduardo Saverin
Eduardo Saverin has become a political whipping boy.
Two Democratic Senators have introduced legislation that seems designed solely to punish people like Facebook’s Eduardo Saverin:
Facebook co-founder Eduardo Saverin recently relinquished his U.S. citizenship just ahead of Facebook’s massive initial public offering. But if Democratic Sen. Chuck Schumer has anything to do with it, as the senator said today, “Mr. Saverin’s social network is about to get a lot smaller.”
The 30-year-old entrepreneur, whose shares in Facebook are expected to be worth around $3 billion after the social network goes public on Friday, is now residing in Singapore. Conveniently, Singapore does not have capital gains taxes, so his move could save Saverin anywhere from $67 million to $100 million in U.S. taxes.
Presuming that Saverin moved to avoid paying taxes, Schumer and Democratic Sen. Bob Casey of Pennsylvania on Thursday unveiled legislation to stop what they called a “despicable trend.”
Under their legislation, any American who renounces his or her citizenship for the purpose of avoiding taxes will be punished in two ways: They will be barred from re-entering the U.S., and their future investments in the U.S. will be taxed at a 30 percent rate.
Taking advantage of every Facebook one-liner available, Schumer said of Saverin, “Sen. Casey and I have a status update for him: Pay your taxes in full, or don’t ever try to visit the U.S. again.”
(…)
Current law says that a person who renounces his U.S. citizenship for the purpose of avoiding taxes can be barred from re-entering the country, as Talking Points Memo pointed out this week, but Schumer said there have been problems enforcing the law.
Under Schumer and Casey’s bill, if an American with a net worth of $2 million or a tax liability of $148,000 renounces his or her citizenship, the IRS will presume that person is moving in order to avoid paying taxes. The person in question will be responsible for proving otherwise.
If a former citizen wants to return to the U.S., Schumer said, he could pay all the taxes he owes in order to return.
Call it Eduardo’s law, I suppose. Before I get around to discussing what is so horribly stupid about this idea from Schumer and Casey, it’s worth noting that this bill is unlikely to ever see the light of day. For one thing, it’s not going to get past the Senate thanks both to the filibuster, and it’s likely that there will be more than a few Democratic Senators who aren’t going to be too eager to support this kind of legislation. Even if it did somehow make it through the Senate, it won’t ever pass a Republican-controlled House. And if Mitt Romney is President next year, he’s not going to sign it into law. If we ever get to the point where Congress and whoever is in the White House are talking about comprehensive fiscal reform, it may be on the table as a bargaining chip for the Democrats, but it’s likely to be sacrificed in negotiations far sooner than the Buffett Rule would be. What we’re looking at, then, is pure politics on the part of Schumer and Casey meant to take advantage of all the publicity this week about Facebook’s Initial Public Offering.This proposed law has nothing to do with fixing any problems involving our tax code, and everything to do with using Eduardo Saverin, who has likely contributed more to the American economy than Chuck Schumer and Bob Casey combined, as a convenient whipping boy.
Leaving that aside, though, there are several serious problems with the proposal that Casey and Schumer are making. Right off the bat, the fact that the law creates the presumption that someone has renounced their citizenship for the purpose of avoiding taxes constitutes a near-unprecedented modification of the burden of proof. Ordinarily in such situations, it is the government that has the burden of establishing that the act was done for an improper purpose, but this bill would create a different burden of proof for people based solely on their income level, something that should be profoundly disturbing to anyone concerned with civil liberties. Second, to the extent that this law purports to apply to Severin personally as opposed to merely people like him in the future, it potentially violations the Constitution’s ban in Article I, Section 9, Clause 3 against bills of attainder and ex post facto laws. The Constitution forbids Congress from using laws to punish a specific person, and it prohibits it from changing the law after the fact. If that’s what Schumer and Casey want to do, they quite simply cannot do it.
Writing about this yesterday, the Wall Street Journal pointed out that there is something profoundly disturbing about targeting people in the manner that this proposed bill does:
Whatever Mr. Saverin’s motivation, the more important point is that it is his decision, however misguided. America was built on millions of similar individual decisions to come to our shores. It is precisely that ability to decide for oneself that has made America such a magnet for two centuries.
The way to continue to be a magnet for the best and brightest is not to impose Soviet-style exit taxes to punish people who want to leave the country. That is what oppressive and demagogic regimes do, and it’s humiliating to see U.S. Senators posture in such fashion. The way to punish Mr. Saverin is to make the U.S. so appealing and dynamic again that he’ll be sorry he ever left.
Tyler Durden is more vehement in his outrage at the Schumer/Casey proposal:
Apparently it’s not good enough that the company Saverin co-founded has created tens of thousands of jobs, spawned entire industries, and produced oodles of new millionaires. Oh yeah, it’s also made things damn easy for the CIA, NSA, and FBI. You’d think Uncle Sam would pin a medal on his chest.
But no. Saverin left behind a lot of value and decided to move on to greener pastures in Singapore. Now the do-gooders in Congress are cooking up new legislation (the EX-PATRIOT Act) designed to permanently bar ‘renunciants’ like Saverin from re-entering the United States.
It’s interesting that, rather than change their ways of doing business and introducing legislation that provides incentives for productive people to come here and stay here, they maintain policies that chase people away, and introduce new ones to lock the door after they’re gone.
The lesson here (especially for natural-born citizens) is this: simply by accident of birth, you are born with a lifelong obligation that you never signed up for to finance the corrupt misdealings of the political class. And if you choose to abandon this obligation, they will bar you from ever entering your homeland again.
Regardless of what the propaganda says, this is not how a free society treats people. It might look and feel like a representative democracy on the surface, but under the hood it’s the modern day equivalent of feudal serfdom.
The land of the free has certainly fallen a long way
Indeed it has.
Facts that have fallen by the wayside in the discussion over the announcement earlier this week that Saverin had renounced his American citizenship. For one thing, as James Joyner noted this morning, Saverin had initiated the process of renouncing his citizenship in January 2011, and the process was finalized sometime around September of that year. It became public recently when Saverin’s name appeared among the annual list of Americans who had renounced their citizenship in 2011. At the time that Saverin initiated this process, a Facebook IPO was still very much a theoretical idea. Yes, it was likely to happen someday, but nobody was sure if that day would come in 2012 or 2013, or possibly even later than that. This lends credence to Saverin’s statement that his decision had nothing to do with tax issues. For another, as Saverin himself has noted, he was required to pay the IRS a fairly hefty “exit tax” as part of the renunciation process. So, the idea that he’s “dodged taxes” is simply absurd nonsense.
Saverin has done nothing wrong here. He has complied with the law, and either the “exit tax” he owes has already been paid or it is being negotiated between his representatives and the IRS (there are complicated issues regarding how to value his pre-IPO interest in Facebook that likely need to be resolved). More importantly, while he lived in this country he has contributed to the economy to a fairly extraordinary extent for someone who was a naturalized citizen who only lived in the country for roughly a decade and a half. Rather than condemning him in the manner that Schumer and Casey, we ought to be asking what we can to to attract more people like him to the country to contribute to our economy. Instead, he’s being used as political football by a couple political hacks. No wonder he left the country.
This guy is a scumbag.
But the tax effort is mis-guided.
Two wrongs don’t make it right.
@Doug Mataconis:
I thought he started the process long before “being used as a political football…”?
Wasn’t that your major point?
Also, health care reform will do a lot more for the economy than Facebook ever will.
My country, tis of thee I sing;
If you love somebody;
You gotta set them free.
Yes. The guy seems like a bit of a douche to me, but this is not the way we do things.
@Hey Norm:
I don’t see anything he did that makes him a “scumbag”
So does this make Savering the first American refusenik?
@Doug Mataconis:
Saverin made a lot of money, really fast, in a way Hey Norm doesn’t understand. In his mind there is nothing more scummy.
It’s not all that unprecedented.
@Stormy Dragon:
Where are all these arguments that making money fast makes you scummy?
I mean, Mark Zuckerberg made _a lot_ more money just as fast and I don’t remember seeing people calling him scummy for that.
—–
Things change I guess.
@Doug Mataconis: Research issues beyond the WSJ.
If Eudardo Saverin doesn’t think he owes the United States a dime for creating, um, the very digital infrastructure that enabled his billions, then he can make sure the door doesn’t hit is ass on the way out.
I really don’t get the anger toward someone who is obeying the law. When I deduct business expenses from my income tax, should I be worried that someone will call me un-patriotic? Nuts to that!
@Doug Mataconis:
Read Sam’s quote.
A Republican-controlled Congress passed the 1996 law.
A Republican-controlled Congress passed the 2004 changes, and then a Republican President signed it into law.
But really, having Republicans in Congress stand up for the man who chose to renounce his US citizenship.
It’s even better than passing the law.
Don’t they believe in American exceptionalism anymore?
@ Doug,
He came to America and benefited from the safety and education and business opportunities that taxes help fund. Only now he doesn’t want to pay the taxes that fund those things he benefited from.
Ipso facto…scum bag.
I agree more with Felix Salmon’s take:
You can interpret Constitutional law, appeal to his innocence, feel uncomfortable about the specificity of this move.
But you can’t argue that it’s actually beneficial to a society –any society– for the ultra-rich to feel no civic duty at all to their countries.
@Hey Norm:
So in your world, his money doesn’t belong to him. Got it.
Of course our friend Mitt Romney will gladly help him shelter his money from US taxes…so he is not alone in his scum-bagged-ness by any means.
How in the f*** do you get to that from what I typed?
That’s why you can’t have a discussion with wing-nuts like you and Jenos and GA and Jan…you just make shit up.
@Doug Mataconis: Hey Norm never said that. Simply that adsent the United State’s (physical and digital) infrastructure, public education system (not to mention Harvard), Eduardo Saverin wouldn’t have made close to the billions he’s worth.
@Doug Mataconis:
Do you believe that an IPO wasn’t going to happen? If no, then it doesn’t matter if the IPO would be in 2012 or 2013. Only thing that matters is to renounce the citizenship before it. Maybe he thought that the IPO would come sooner that it did.
James,
And Saverin complied with the law and paid the taxes he owed. He hasn’t broken any laws. He isn’t a scumbag in my book.
@James:
Saverin hasn’t earned anything from Facebook yet. His current fortune comes from commodities trading (mostly on oil) in Brazil.
There is a certain racist subtext to this whole story. If someone from Brazil became rich, it can’t be because he did us a favor by funding US business ventures. No, everyone knows that only REAL AMURICANS can be successful in business, so obviously he just took advantage of our greatness. So obviously he should be paying us a big chunk of the proceeds for allowing him the privelege of earning money on our planet.
The US elite already tried to screwed him out of what was rightfully his once, and now they’re trying to do it again. This law is really just about Schumer and Casey wanting to make sure that uppity Brazilian remembers his place.
Well, at least Schumer and the junior Casey didn’t introduce legislation to exile the likes of Saverin to Gitmo for some waterboarding and a summary trial and execution. So, there’s that.
On a serious note, Mataconis has done an excellent job of outlining just how idiotic this is. Nothing to add there. What I can’t figure out, however, is why is Casey, Jr. affiliating himself with this nonsense. I’m gobsmacked.
Schumer I understand. Casey? WTF?!
Lastly, there are times when a song is more apropos than any commentary. This is one of those times:
— The Beatles
@John Peabody: that seems to be the meme, paying maximum taxes is an act of gratitude.
So, if some one itemizes on their 1040 are they ingrates?
Shorter Doug: nothing a rich person does can ever be wrong — unless they try to help poor people.
@ Doug…
Scumbag is not a legal description.
As an attorney I would have thought you knew that.
Haven’t people figured out by now that Doug doesn’t really believe in Democracy? I’m not even sure he believes in the concept of Civil Society. What Doug appears to believe in is that some people are just better than others. He appears to believe that status is signified by how much money you have. And he appears to believe that the “betters” among us should do whatever the hell they want and the rest of us should simply tug our forelocks whenever we’re graced by their presence.
Mike
@Doug Mataconis: I never said he broke any laws. I also never said he was a scumbag. He’s just another craven, entitled individual who neglects to service the very market that enables his riches.
@Stormy Dragon: I’m not sure where your picking up this alleged racial animus. No one here as mentioned his ethnicity, outside of his nationality as it pertains to the issue. At any rate, one of my closest friend, ironically, is a Brazilian national. We went to high school and university together.
As for Mr. Saverin, he was clearly quite well off well before Facebook:
Oh, and
Not true.
America helped make this guy a fortune. Now he does not want to be an American. So now Americans dont want him back in America. I’m okay with that and Saverin should be okay with that.
I’m with Durden. Tell Schumer to stick it up his smelly ass. What has he ever done for the country? As I pointed out in another thread, and was thoroughly catigated. People like a Mitt Romney, or the Facebook guys, who create tremendous wealth and jobs for those who can’t do it for themselves should be adored. Knighted. Worshiped.
The left? They say these guys are filthy pigs for not letting us rape them of more of their gains.
Any wonder wealthy people are considering leaving France. This guy hit the road? People are sitting on cash rather than making risky investments? The left is destroying this country, and they are so clueless and all such parasites and they dont even know it. We have the NATO protester crowd here in Chicago right now. Want a good laugh? Just listen to an interview with these clowns.
Lets see how many thumbs down this one can get. But hey, lefties, take your thumbs out of each others asses. WTFU
@Drew: You’re free to move to Somalia, if you feel the burden of society is so great.
Which is why Obama has lowered taxes. And spending by the way. And the deficit by the way.
If your view of the world is based on un-truths, mis-information, and total fabrications…you probably ought to get a new view of the world.
“Instead, he’s being used as political football by a couple political hacks. No wonder he left the country.”
Huh? Even if we agree that he’s “being used as a political football” (oh, boo hoo! poor billionaire baby!), that came AFTER he decided to leave the country.
@MBunge:
I believe that a person who has complied with the law should not be condemned in the manner that self-important Yahoos like Schumer and Casey are doing with Saverin.
Conservatives and libertarians often whine about how “half of Americans don’t pay taxes” and need “skin in the game”. Unsurprisingly, these arguments never apply to their preferred tribe, the rich.
@Doug Mataconis:
You mean US Senators who understand US public policy differently than you?
James,
I believe Mark Twain put it best:
@Doug Mataconis: And with that, you’ve eschewed any change of serious conversation.
James,
When Schumer and Casey abandon their absurd vendetta we will be one step closer to being able to have a serious conversation.
@Doug Mataconis: Yes of course Doug. It’s all the fault of those nasty liberal senators, who don’t have your public policy preferences at heart.
If he could have made his fortune in some other place he should have. Instead, he chose to do it in a place with super-highways, and behind the biggest, baddest shield that protected him from thugs, both foreign and domestic, that has is and has ever been. It’s not a free ride.
I do not concur with the thought that we must pursue ideological purity by allowing this sort of looting and scooting.
This renounce citizenship door has been wide, wide open all along. It’s just been the case that not many people have used it, so it could be allowed to continue. If it becomes a trend then it’s simply common sense to make it less attractive.
Tax avoidance and temporary American citizenship are
as American as apple pie.
What he is doing is no different than American Companies who off-shore jobs.
Nothing wrong with it legally.
They are just scum.
That’s all.
@Doug Mataconis: “I believe that a person who has complied with the law should not be condemned in the manner that self-important Yahoos like Schumer and Casey are doing with Saverin”
So when the super rich are able to “lobby” congress to pass laws to enable them to do essentially whatever they want, we’re not even allowed to criticize them, since they’re following the laws that they bought?
Do you agree with Drew that we should be down on our knees worshipping these people for gracing us with their existence? Or is it enough that we admire them silently?
@WR:
Saverin isn’t getting an special treatment due to his lobbying Congress. If you don’t like the law change it. Until then, he has complied with the law and using him to spark a campaign of envy as Schumer and Casey are doing is wrong, IMO
@James:
Last time I checked we are still allowed to disagree with Democratic Senators. Please advise if this has changed.
The EX-PATRIOT Act is about as misguided as the PATRIOT act.
@Doug Mataconis: Slip and slide Doug. That’s all you know.
I never said people weren’t “allowed to disagree with Democratic Senators”. You’re the one bemoaning how once “Schumer and Casey abandon their absurd vendetta”, we’ll be “able to have a serious conversation.”
@James:
What is it with the left and moving? Someone on the right complains about taxes and someone on the left throws out Somalia. If a person on the left doesn’t like someone on the right being elected, they always seem to whine that they are moving to Canada. It’s just stupid.
@Moderate Mom:
Because, well, the right lionizies the rich as is they are some kind of economic cowboys, when nothing could be further from the truth.
Would you like to actually approach my points upthread, or just throw out more red herrings?
Shouldn’t not paying his taxes qualify Saverin for a job in the Obama administration?
@Doug Mataconis: “If you don’t like the law change it. Until then, he has complied with the law and using him to spark a campaign of envy as Schumer and Casey are doing is wrong, IMO ”
Oh, and what is it that Schumer and Casey are trying to do? Oh, yeah — change the law. Which according to you is both our only justifiable action AND a terrible, awful, vile thing.
So is changing the law the right thing to do or the wrong thing to do?
WR,
No, what they are doing is proposing a completely unworkable, possibly unconstitutional piece of legislation that has zero chance of becoming law for the purpose of getting publicity by demonizing Saverin.
@sam: According to Wikipedia that 1996 law does not appear to have ever been enforced. If its not being enforced, the Constitional problems with it don’t get addressed.
Also, the 1996 law does not appear to deal with the burden of proof issue Doug raised. Its highly unusual for someone to have to prove their innocence to the government. Off hand, I can only think of one example, Joseph K.
@Doug Mataconis: “I believe that a person who has complied with the law should not be condemned in the manner that self-important Yahoos like Schumer and Casey are doing with Saverin.”
Doug, I wouldn’t have to look hard on this blog to find evidence of you strongly condeming a whole bunch of folks who have “complied with the law” for various other ethical and moral offenses, so that’s just a pitiful excuse. The truth is you love rich people. You think they’re better than anyone who’s not rich. You think society should be organized to benefit rich people above all others. You may believe yourself to be some sort of rugged individualist, but all you really are is a serf.
Mike
“Any wonder wealthy people are considering leaving France. This guy hit the road? People are sitting on cash rather than making risky investments? The left is destroying this country, and they are so clueless and all such parasites and they dont even know it.”
Agreed. These are wonderful people who should not have to pay any taxes at all. They create lots of jobs for us out of the goodness of their hearts, never receiving a penny in return for their hard, work. They have suffered so much over the last 30 years, it is a wonder that they manage to get by on their meager earnings. Let’s make it up to them with the following.
1) No taxes for all of the wealthy instead of just some of them.
2) Since they have been so neglected, they need a voice of their own. Let’s give them the media. (Oops, they already own the media.)
3) Let’s pass a law so that they can anonymously control messaging in our political campaigns. (Oops, that one was already done too.)
4) Let’s hold down wages for the rest of the American work force so they can hire cheaper labor. (Oops, we already did that one too.)
OK, I give up. I just cannot think of anything new we can do for this neglected group. I will try to think up some other ways we can show our appreciation.
Steve
@Chris:
This is where I’m getting the racial animus: people like Chris with their implication that Saverin couldn’t have possibly made a fortune anywhere else in the world; he only succeeded because he had Mighty Whitey’s help.
@WR: The rule of law generally means that penalties and punishments are enacted prospectively. People should know that if they do A, then consequence B arises. Its third world countries that pass laws to punish someone who has already done something unpopular. That’s different from observing something happen that you don’t like and taking steps to guard against it happening again in the future.
-Joseph Conrad, Heart of Darkness
@Dazedandconfused:
He did. He’s currently worth more than 2 billion dollars, 90% of which he earned trading commodities in Brazil.
@Doug Mataconis:
In my world, privileges come with responsibilities.
Bill Gates gets this. Philip Anschutz gets this . But this sheltered scion of Brazilian plutocracy doesn’t.
All we’re asking is that he pay his taxes like any other American.
@Stormy Dragon:
This dude is a Brazilian plutocrat. He’s more Mighty Whitey than the rest of us around here combined.
You do know the origins Brazi’s class system, right?
@Tylerh:
Do you have any evidence he’s not?
@PD Shaw:
My point, small as it was, was that the claim of unprecentedness was unfounded.
@Stormy Dragon: You’re completely ignoring the specific digital and physical infrastructure, and networks that the United States provides. His bio:
The United States taxpayers spend untold amounts of money creating a country that frees Mr. Saverin’s family from random kidnappings, develops the digital infrastructure that the multi-billion dollar firm he co-founded is predicated on, and hosts the educational environment that introduces him to men like Mark Zuckerburg.
But for some reason, you assert that others allege that “he only succeeded because he had Mighty Whitey’s help.” You’ll have to pardon my skepticism.
@Stormy Dragon: Um, yes. He wants to renounce his U.S. citizenship, but doesn’t want the penalties of exile. He wants to enjoy Singapore’s low tax rates without the burden of forgoing the benefits that the US market infrastructure provides.
@James:
Yes, because the whole focus of this law is not making sure the US get taxes owed for the IPO of Facebook (like maybe changes the definition of capital gains to capture the wealth creation that occurs duing an IPO properly), but punishing Saverin for not evincing sufficient gratitude.
@Stormy Dragon:
Point missed.
@Stormy Dragon:
Even if one accepts your premise (which is debatable), there’s nothing that implies criticism of “Saverin for not evincing sufficient gratitude” is couched in racial animus; other than your own characterizations.
@Doug Mataconis: Well, he committed perjury when he signed the statement that he was not renouncing his citizenship for tax purposes.
@Drew:
Mitt Romney is nothing like the Facebook Guys. The Facebook Guys actually created something immensely valuable that was not there before they showed up. Romney just shifted around stuff other people had built and skimmed a percentage off the top.
Even people as hard core as Ayn Rand recognized the distinction. Republicans often forget that throughout Atlas Shrugged she frequently criticized the idea of equity investment as a form of secondhanding.
@James:
Okay, perhaps nationalism would be a better description than racism, per se.
@Gustopher:
You don’t know that’s true at all. And you’ve just accused someone of a Federal Crime that could land him in prison for 5 years without evidence
@MBunge:
Unlike you, I don’t consider the fact that someone keeps their property to be evidence of an ethical or moral failing.
@Stormy Dragon: “This is where I’m getting the racial animus: people like Chris with their implication that Saverin couldn’t have possibly made a fortune anywhere else in the world; he only succeeded because he had Mighty Whitey’s help.”
Actually, the only one equating America with “whitey” is you. But if it will help claify things for you, I’m in favor of this applying to any American citizen who renounces his or her citizenship to avoid taxes. Yes, even white people, who are not, you might be surprised to learn, the only ones who have American citizenship.
@Stormy Dragon: “All we’re asking is that he pay his taxes like any other American.
Do you have any evidence he’s not?”
Did you nod off in the middle of your own argument? This entire thread is about a man renouncing US citizenship to avoid paying taxes.
What the hell do you think you’re arguing about?
Just a few points:
1-) As a Brazilian I can say that, had Saverin stayed in Brazil he would not be a billionaire. The fact that kidnappers forced him to move to Miami was the best thing to happen to him.
2-) when Saverin started Facebook social networks were not a new idea. The greatest doubt at the time was whether was possible to sustain the high bandwith costs and the cost of moderating the network(Orkut had became a popular place for neonazis in Brazil at the time, there was also some problems with pedophiles).
In fact, Google had Orkut, an extremely popular site in Brazil, that also had lots of users from India and Iran(A problem at the time was that any forum could be flooded by posts in Portuguese). Saverin did not create the network, but his idea of implementing intrusive ads on Facebook would probably have killed it.
3-) There are cultural differences as well, because in Brazil there are less social pressure on the rich for them to be either discrete or to do charitable work. Most foundations named after Brazilian billionaires are modest institutions comparable to foundations named after American billionaires. São Paulo and Rio de Janeiro are known for their extremely expensive luxury stores.
I imagine that Saverin did not saw that United States is not Brazil..
(Yes, I´m not sleeping enough, so, expect more typos than usual in this long message).
@WR:
He’d still be required to pay his taxes on anything earned before he stopped being an american. And after he stops being an american, he’ll pay taxes on anything he earns in the US like any other singaporean.
Or are what you really saying is that the US somehow owns Eduardo Saverin and thus has an expectation of receiving a future share of his earnings whether he’s an American or not?
@Doug Mataconis: “Unlike you, I don’t consider the fact that someone keeps their property to be evidence of an ethical or moral failing. ”
Nor do you consider the fact that the wealthiest country on the planet has tens of millions of people living in poverty and without access to health care an ethical or moral failing.
In fact, the only thing I’ve ever seen you consider to be an ethical or moral failing is drumming in a circle.
@Stormy Dragon: Nice bit of goalpost moving there. Have you been studying with Jenos?
WR,
Eduardo Saverin is not responsible for poverty nor should he be demonized because it exists.
If you want to blame anyone, blame the government that has been waging a failed “War On Poverty” since Lyndon Johnson was President.
@Doug Mataconis: “Unlike you, I don’t consider the fact that someone keeps their property to be evidence of an ethical or moral failing.”
Doug, this is exactly why libertarians are such a miserable fringe in politics. Whenever someone tries to engage you in argument, you turn into such little shits and retreat rather than expose your precious ideology to any intelligent scrutiny.
The point at issue here has nothing to do with whether or not Saverin has done something wrong. The point is that you’ve claimed you don’t like to see people condemned when they’ve “complied with the law”. My response is that you’ve condemned plenty of folks who’ve “complied with the law”. The only difference is that the person being condemned here is rich, and therefore you can’t help but grovel before him.
Mike
@MBunge:
Other than giving more of his money to Uncle Sugar than the law requires explain to me one thing that Eduardo Saverin has done that is morally wrong.
@WR:
You mean like “Nor do you consider the fact that the wealthiest country on the planet has tens of millions of people living in poverty and without access to health care an ethical or moral failing”? So now Saverin’s personally responsible for the lack of healthcare in the country? If not, what does that have to do with his citizenship status?
@Stormy Dragon: Perhaps. But you’re still just adding your own veneer of characterization to other people’s criticisms. If Mark Zuckerburg decided to renounce his US citizenship for tax purposes, would you expect a markedly different reaction?
@Doug Mataconis:
Mr. Saverin’s net income is “his property,” not his gross. This is a pretty fundamental aspect of tax policy.
@James:
Mark Zuckerberg hasn’t spent most of his childhood and all of his adult life outside the US, nor did he amass most of his current fortune through means entirely unrelated to US economic activity. As much as I dislike the infrastructure argument, it at least applies to Zuckerberg. The claims on Saverin, on the other hand, seem more like an assertion of ownership, which is what pisses me off about this argument.
@Doug Mataconis:
If we are going to discuss morals, we must first decide what sort.
Are we talkin’ Marcus Aurelius here, or Ayn Rand?
@Stormy Dragon: Saverin has been a US resident since 1993. You can find the link to his biography upthread.
You’re free to “dislike” the infrastructure argument, but that’s different from a rebuttal. Mr. Saverin’s family relocated to the United States specifically to enjoy our police protections, legal system and technological infrastructure. He’s profited greatly. I’m very happy for him. I used Facebook daily.
But Mr. Saverin now wants to enjoy foreign tax rates without suffering the penalties of foregoing his US residency, allowing him continued access to the market that US taxpayers help service. There’s nothing racial or nationalistic about that, aside from your own characterization.
@Dazedandconfused:
Are we talking the morals of the creator, or the morals of the thief?
Again, Saverin has paid taxes in this country. He has apparently paid his “exit tax.” That is all the law requires.
Tax law is not a moral issue.
@Doug Mataconis:
Tax policy is deeply entwined with moral principles. I’m amazed your alma mater gave you a political science degree without introducing you to these concepts.
@James:
He moved back to Brazil in 2006 after he graduated from Havard, and in 2009 moved to Singapore.
@Stormy Dragon:
“Facts are stubborn things” — John Adams
@James:
In the end, the only relevant question in tax policy is what policy will raise the most amount of money in the most efficient way possible without causing undue harm to the economy.
@Stormy Dragon: So Mr. Saverin spent ages 11 through 24 as a US resident. That certainly sounds like “most of his childhood,” and some of his adult life. Particularly pertinent is the part where he co-founds a (now) multi-billion dollar company that’s predicated on US technological and infrastructure investments.
I’m not sure how this is related to your point that criticisms of Mr. Saverin are somehow not legitimate.
There are two things here: Casey and Schumer are being petty demagogues, but Eduardo Saverin´s deserves all the criticism he is getting. He should have know that he would be seem as insensitive, at least, by doing that.
And I´m not the only Brazilian that thinks that rich Brazilians should be more like Rich Americans, not the inverse.
I have to say that is a striking image of Saverin as Kurtz from Heart of Darkness, leaving behind stacks of skulls, an earth gouged and deforested, with fly be-speckled elephant carcasses. Sounds exactly like my wife’s Farmerville.
We paid taxes to help protect this guy. We served in the military to help protect this guy. We provided police protection. We protected his family too. Then, he renounces his citizenship just in time to avoid paying taxes. I think there is no doubt that this is morally sleazy, the only question would be one of legality.
We should just acknowledge that many of the ultra wealthy have no allegiance to anything or anyone other then themselves. We should also acknowledge that we have set up mechanisms that allow them to heavily and anonymously influence our politics. People should look at our trends over the last 30 years since the ascendancy of conservative/libertarian thought. Income, wealth and power are being concentrated into the hands of a small group of people. If you think this is a positive, you should vote accordingly.
Steve
@Doug Mataconis:
Quite possibly the most uninformed opinion I’ve seen you publish. There are all kinds of questions in tax policy beyond revenues; ability to pay, willingness to pay, questions of fairness, endowment, etc.
If you’re seriously interested, buy the Murphy and Nagel book I linked. Read chapters 2 and 3. The authors explain concepts of tax-policy principles much more throughly than I can right now.
@Doug Mataconis:
Tax laws are created by men, and can be changed by men. The post-facto stuff I agree with, that is wrong, but the question was if what he did was moral or not.
BTW, does anyone know if him renouncing US citizenship DOES even reduce the taxes he owes on the Facebook IPO? The IPO is occuring in the US, so unless I’m missing something, he’s going to have to pay taxes on the gains whether he’s a US citizen or not.
@Stormy Dragon: No I don’t know the answer to that; I assume that no legislation has been written yet. I think sam is correct that the proposal sounds like an addition to the 1996 law, which I glanced through and I think is concerned with prospective taxes lost when wealthy people leave. (It only applies to people above a certain income level) If the Rolling Stones decide to move their corporate headquarters to Canada for better tax treatment, they might not be able to return to the United States, even if they paid all of their taxes to date. The U.S. would be out the expectation of future taxes originating from activities in the U.S. prior to their tax exile. That’s how I read it at least.
@Stormy Dragon: Not if he’s no longer a US citizen. Read the first comment I posted today.
Furthermore, Bloomberg reports:
@James:
Yeah. The problem is, I think that article is wrong. Looking at the IRS’s guide:
http://www.irs.gov/pub/irs-pdf/p519.pdf
That makes it sound that by owning shares in a US corporation directly (as opposed to GDRs), he’s liable for taxes whether he’s a US citizen or not.
@Stormy Dragon: I can’t speak to the veracity of TPM or Bloomberg’s reporting, but they’re not the only news outlet reporting the claim. At any rate, how would the United States government enforce the US tax code on non US-ctizens, who are no longer filing in the US?
@Stormy Dragon:
Reading more in the guide: renouncing his citizenship would actually make his tax rate higher, since he’ll get taxed at the 30% non-resident alien rate rather then the lower rate that US residents and citizens pay.
@James:
If I’m understanding correctly, he would still be required to file though.
@Stormy Dragon: How? What legal arm does the IRS call upon to confiscate the income of foreign national non-residents?
@Doug Mataconis: Of course, Johnson’s War on Poverty led to a major reduction in poverty in this county. The fact that poverty wasn’t eliminated overnight is hardly an argument against the program — it’s an argument to push further. But decades of Republican hatred of the poor and worship of the rich has led to a backslide away from the War on Poverty.
Perhaps someday you’d like to engage in a real discussion, instead of flinging silly bumperstickers around. You made it through law school and passed the bar. Clearly, you’re an intelligent man. But politically you refuse to move beyond platitudes. Possibly you know that if you ever subjected your quasi-religious faith in the glory of libertarian ideals to the rigorous examination your legal training taught you to do that you’d have to abandon your ideals.
And no, this creep isn’t responsible for poverty. We, as a society, are. But it’s become fashionable for the rich and those who suck up to them to pretend that they owe their society nothing — while the rest of us owe the wealthy our devoted worship.
@James:
Well if his plan is to go to Singapore and just not pay regardless of the law, it hardly matter whether or not he’s a US citizen does it. The only way to stop that is to ban rich people from ever leaving the country.
@Stormy Dragon: It absolutely matters if he’s a US citizen or not. That’s the entire point of this discussion! US citizens have to file taxes annually with the IRS. Foreign nationals do not.
@James:
Foreign nationals doing business in the US most certainly do have to file, even if they’re not physically present in the country.
I forgot something PRETTY IMPORTANT: it´s true, there are no insider trading laws in Brazil.
They probably have to file, but I imagine the tax is lower. Y’know, encourage the world to invest in the biggest consumer market out there. Hence, renouncing citizenship to profit from lowered tax obligations.
Also, let’s not forget the IRS is underfunded.
@Stormy Dragon:
1. There’s no evidence that he wants to become a Singaporean.
While he applied to revoke his US citizenship 16 months ago, there’s no evidence that he is revoking his Brazilian citizenship or trying to gain a Singaporean citizenship (Singapore don’t allow dual citizenships, so he would have to renounce both of his citizenships for that).
2. The tax he’s most likely trying to evade paying besides those already mentioned is the gift tax.
Of course, the obvious answer that will never occur to the likes of the appropriately rat- faced Schumer is to adjust things so that such money stays in the country. IE; Lower taxes. Thereby, providing jobs here as opposed to elsewhere.
Ol Chuckles is in a snit because he thinks that’s money HE’S entitled to. He wants to erect a wall, to keep people in. I seem to recall Ronald Reagan telling Premier Gorbachev to tear down his wall, also designed to keep people in. And for the same reasons.
Perhaps a worthy comparison, would be people leaving particular states for the same reason. Consider, for example, the plight of California. This is a plight of their own making….Their policies are leading to people fleeing in droves.
As goes California yeah, so goes the country. And the left, still hasn’t gotten the message.
Perhaps the more important message here, is that this is the kind of anti freedom, pro socialist, dictatorial, and totalitarian nonsense that one can expect so long as Democrats remain in any position of power…. down to and inclusive the position of dog-catcher.
@Bithead:
0.000005%
Droves. Sure.
Like the job boom Bush presided over thanks to his tax cuts?
Renouncing your US citizenship is quite different from moving to Alabama from California.
Maybe you should read up on the laws the Republicans in Congress approved in 1996 and 2004 (in 2004 with a Republican President).
But I’m happy that you agree with the idea that Saverin renounced his citizenship due to him wanting to escape paying taxes. Read up on the consequences for doing that thanks to laws passed in a Republican-controlled Congress…
@Eric Florack:
https://www.outsidethebeltway.com/democratic-senators-unleash-tax-vendetta-against-eduardo-saverin//#comments
Boehner still has an R behind his name, last time I checked.
@Dazedandconfused:
Something happened with your link, but I guess this is what you’re referring to:
@Doug Mataconis:
Is the speaker a Democrat or do we have a bipartisan tax vendetta?
@PJ: So, explain why they’ve created a “Departure tax”, eh? Apparently, there’s more of a problem than you’re suggesting.
@Dazedandconfused: Apparently are still under the misconception that “republican” means “conservative”. Please disabuse yourself of this notion and try again.
@PJ: Comparatively speaking, yes. Lower taxes always means more jobs. Always, always, always. Unless, of course, you consider that the only meaningful measure of such things as the amount of government jobs provided.
@Eric Florack:
Already forgotten that you wrote “Democrats”?
@PD Shaw: Well….yes, but…there’s a lot of law where it’s pretty retroactive. Like in patents. Look at the result of Bilski and Prometheus. Statute passing looks forwards; SCOTUS judgments can cast a very very long shadow backwards.
The existing patents have assumption of validity, but don’t hold your breath. Holds only until someone gets up the gumption to invalidate the patent. Between SCOTUS and the America Invents Act, you’ve basically got full employment for quite a lot of patent lawyers for quite some time.
@Eric Florack:
Yes, but is he a true Scotsman?
The name “John Galt” leaps to mind.