Facebook Billionaire Flees America for Lower-Taxed Shores

[Menelik_I]

billionaire co-founder Eduardo Saverin, who renounced his U.S. citizenship ahead of the IPO, potentially reducing his tax burden.

Saverin, who was born in Brazil and is a resident of Singapore, holds a 4 percent stake in the company, which could be worth about $3.84 billion. Bloomberg reports that though Saverin won’t escape all U.S. taxes—he will still owe what is effectively an exit tax on the capital gains from Facebook’s stock holdings, even if it doesn’t sell the shares—he will enjoy the benefits of Singapore’s tax code. Namely, it doesn’t have a capital gains tax.

a record 1,780 individuals gave up their U.S. passports last year, compared with 235 in 2008.

The Cato Institute’s Dan Mitchell says

There is a wealth of data on successful people leaving jurisdictions such as California and New York that have confiscatory tax systems.
And there’s also lots of evidence of taxpayers escaping countries controlled by politicians who get too greedy. Mr. Saverin is just the latest example. And I suspect, based on the overseas Americans I meet, that there are several people who quietly go “off the grid” for every person who officially expatriates.
The statists say these people are “tax traitors” and “economic Benedict Arnolds,” but those views are based on a quasi-totalitarian ideology that assumes government has some sort of permanent claim on people’s economic output.

http://blog.heritage.org/2012/05/11/...-taxed-shores/

Sounds like an example of tax policy does matter, in this case is potentially $3 Billions that are going to make Singapore a nice place through investments and jobs ... that is a awful lot of money for the US to lose in economical welfare.

I can't help but picture a Brazilian dude running towards his private jets with bags of cash while the Tax Collector pursue him ... tax me if you can

Not only did the Saverin tried to escape the tax on his IPO gains, but more taxes taking effect 2013 :

Income tax rates shoot up,
- The child credit is cut in half,
- The marriage penalty roars back,
- The capital gains tax rate goes up,
- The dividend tax rate soars,
- The payroll tax rate jumps two percentage points,
- The death tax is restored to its punitive past,
- The Alternative Minimum Tax relief expires, and
- A uniquely pernicious additional payroll tax hike from Obamacare takes effect.

http://blog.heritage.org/2012/05/11/...ke-in-history/

Do people could really see this, then say that tax policy don't matter and that those rich people should pay more ?

Is He a traitor ?

[King Gambrinus]

Is this guy going to invest in the US economy or swim in his pool of molten gold?


None issue.

[molonthegreat]

Well that's what happen when you have too much taxes and it's just good for the countries that have low tax rates and benefit from it , just look how many millionaires that have moved from various European countries with enormous tax rates to countries such as Luxembourg, Switzerland and Monaco.

Is this guy going to invest in the US economy or swim in his pool of molten gold?


None issue.

So billionaires just keeps their money locked up and never use them? I don't know how anyone can think it's a non issue that billions disappears out of the US because of horrendous tax rates.

[Enemy of the State]

So billionaires just keeps their money locked up and never use them? I don't know how anyone can think it's a non issue that billions disappears out of the US because of horrendous tax rates.

Even if they did, money isn't in itself wealth. It is a means of exchange. Nothing is lost if money is stored, what simply happens is that the supply of money decreases and the economy adjusts to it.

[Keyser]

It's a non issue.
He isn't going to stop invest his money (where it's most profitable, including in the US, or elsewhere, like he did before), he is also probably not going to stop owning stuff and coming to the US... He is "just" evading taxes (wich sure is a loss of money) too bad only those kind of guys can so easily.

I don't know how it is in the US by the way, but in France most VERY rich people avoid large part of their taxes through various special exemptions and mechanisms anyway.

[Menelik_I]

It's a non issue.
He isn't going to stop invest his money (where it's most profitable, including in the US, or elsewhere, like he did before), he is also probably not going to stop owning stuff and coming to the US... He is "just" evading taxes (wich sure is a loss of money) too bad only those kind of guys can so easily.

Might be fun if someone calculate the net tax ''loss'' for the US, but yes He is not going to stop investing his money, but now that He is in Singapore He as more options as where to invest his money (hint : China, Singapore, Hong Kong, and much more), unlike the US, Singapore don't have capital gains taxes.

I don't know how it is in the US by the way, but in France most VERY rich people avoid large part of their taxes through various special exemptions and mechanisms anyway.

It is called having François Holland and Nicholas Sarkozi for dinner on Sundays. Very rich people generally play both sides to any political conflict to conserve their bank account, the ''lesser rich'' and middle class are the casualties mostly.

Welcome to Singapore!!

I am sure you have 3 Billions reasons for you to welcome him

[hellheaven1987]

Welcome to Singapore!!

[Primo]

Thats why the rich aren´t taxed high.

[IrishBlood]

Thats why the rich aren´t taxed high.

True, they can just pack up and leave if they think they'll find more favourable taxes else where, as this case proves.

[Astaroth]

Despite the current taxes (which aren't high by any means compared to most European countries), plenty of millionaires still live in the US. Therefore, lowering taxes might make a few additional millionaires stay in the US, but the gain would be much smaller than the loss in tax revenue.

Simple math:

100 people earn 1 million dollars per year each. All of them pay 20 % taxes.

Income for the state: 20,000,000 $.

Lower taxes:

100 people earn 1 million each. Taxes are lowered to 10%.

Income for the state: 10,000,000 $.

To get the same tax revenue, there would have to be a number of millionaires that is twice as high (here: 200).

Yet it is obvious that not half of the US population who make 1+ million dollars flee to Singapore.

Thus, that whole "fight tax flight with tax cuts" is a myth. Also, lowering taxes only really affects tax cuts if the taxes are (almost) as low as in countries like Monaco or Switzerland. But in that case, the tax revenue would go down so drastically that you would need like 10x as many millionaires suddenly.

[Menelik_I]

Despite the current taxes (which aren't high by any means compared to most European countries), plenty of millionaires still live in the US. Therefore, lowering taxes might make a few additional millionaires stay in the US, but the gain would be much smaller than the loss in tax revenue.

Simple math:

100 people earn 1 million dollars per year each. All of them pay 20 % taxes.

Income for the state: 20,000,000 $.

Lower taxes:

100 people earn 1 million each. Taxes are lowered to 10%.

Income for the state: 10,000,000 $.

To get the same tax revenue, there would have to be a number of millionaires that is twice as high (here: 200).

Yet it is obvious that not half of the US population who make 1+ million dollars flee to Singapore.

Thus, that whole "fight tax flight with tax cuts" is a myth. Also, lowering taxes only really affects tax cuts if the taxes are (almost) as low as in countries like Monaco or Switzerland. But in that case, the tax revenue would go down so drastically that you would need like 10x as many millionaires suddenly.

Those who are already rich will likely not go anywhere because the cost of moving assets or they already have good enough lawyers, but those are becoming rich might think about evading the country like this Facebook dude.

If you like all your Billionaires to be Walking Zombies (Kochs, Soros, and Turner) and inheritors of walking zombies for the foreseeable future, the sure leave tax rates where they are. Just don't surprised if the next bit innovations of the next years come from another countries.

[Astaroth]

Those who are already rich will likely not go anywhere because the cost of moving assets or they already have good enough lawyers, but those are becoming rich might think about evading the country like this Facebook dude.

If you like all your Billionaires to be Walking Zombies (Kochs, Soros, and Turner) and inheritors of walking zombies for the foreseeable future, the sure leave tax rates where they are. Just don't surprised if the next bit innovations of the next years come from another countries.

(Regular) tax cuts won't do anything about tax evasion.

Most people don't want to move to Singapore, even if they have to pay taxes, since they have family, assets and business connections in the US. The only ones who DO move are those who either a) don't have any of that or b) care the most about maximising their profits at any cost, even if it means living on the other side of the world.

Those people who are that determined to keep their money are not going to be stopped by regular tax breaks. In order to keep them here, taxes would essentially have to be lowered to nothing. And that would have catastrophic consequences for the already gigantic US deficit. etc. etc.

[Menelik_I]

He didn't move to Singapore, He also renounced his US citizenship, just for the record.

(Regular) tax cuts won't do anything about tax evasion.

I don't know what you mean by regular tax cut, but there is a point beyond which tax is excessive, especially if the money is taxed many times over until it reach your pocket.

Flat, simple and low tax rate benefit everyone.

Most people don't want to move to Singapore, even if they have to pay taxes, since they have family, assets and business connections in the US. The only ones who DO move are those who either a) don't have any of that or b) care the most about maximising their profits at any cost, even if it means living on the other side of the world.

Yet I am sure you were one of those people crying about Romney offshore funds or would find yourself rather at home with the Brits railing about a Conservative major financier having his funds parked in the Bahamas.

He doesn't have to move completely to Singapore, He could stay there long enough to not qualify for income tax and still be able to fulfill his professionalism commitments.

Those people who are that determined to keep their money are not going to be stopped by regular tax breaks. In order to keep them here, taxes would essentially have to be lowered to nothing. And that would have catastrophic consequences for the already gigantic US deficit. etc. etc.

Damn those Singaporean anarchist ... gotta have the Royal Navy teach them civilization

Tax rate on corporate profits for up to 300,000 SGD 8.5%
Tax rate on corporate profits above 300,000 SGD 17%
Tax rate on capital gains accrued by the company 0%
Tax rate on post-tax profits (i.e. dividends) distribution to shareholder 0%
Tax rate on foreign-sourced income not brought into Singapore 0%
Tax rate on foreign-sourced income brought into Singapore 0 – 17% subject to conditions

Tax rate on first 20,000 0%
Tax rate on next 10,000 2%
Tax rate on next 10,000 3.5%
Tax rate on next 40,000 7%
Tax rate on next 40,000 11.5%
Tax rate on next 40,000 15%
Tax rate on next 40,000 17%
Tax rate on next 120,000 18%
Tax rate on above 320,000 20%
Tax rate on capital gains 0%
Tax rate on income earned overseas 0%
Tax rate on dividends received from Singapore company 0%

http://www.guidemesingapore.com/taxa...pore-tax-rates

When do you people realise that fiscal heavens pose a threat to global stability and will ultimately lower everyone's quality of life? That guy Eduardo, who left the US and will stop paying taxes? Well, those are millions of dollars that aren't going to the US purse to pay for the NHS, the army, the police, you name it.

Sucks for the US, maybe they should try being less confiscatory.

Apparently the only act of rebellion and rejection of the ''corrupt political class'' is limited to voting extremism parties, babbling about poorly translated copies of the communist manifest, and discussing politics for hours ... what is more rebellious than self-exile ?

And in Singapore all that money will stay in his pocket, gaining dust. "Oh, he'll invest", you say, yeah sure, right, he'll invest in stocks, because that's he does, and especially in companies that bring little of productive to the economy, and which will be a huge flop in the future (hey facebook).

1- His money.
2- Facebook flop ? Says the dude posting in a TWC forum ... could we know your net worth ?

[Astaroth]

I don't know what you mean by regular tax cut, but there is a point beyond which tax is excessive, especially if the money is taxed many times over until it reach your pocket.

Flat, simple and low tax rate benefit everyone.

Yet I am sure you were one of those people crying about Romney offshore funds or would find yourself rather at home with the Brits railing about a Conservative major financier having his funds parked in the Bahamas.

He doesn't have to move completely to Singapore, He could stay there long enough to not qualify for income tax and still be able to fulfill his professionalism commitments.

Damn those Singaporean anarchist ... gotta have the Royal Navy teach them civilization

So now that I have proven you wrong on every count you are just rambling?

[Vítor Gaspar]

All you people defending here fiscal heavens like Singapore make me laugh.

Besides Switzerland fiscal heavens usually have a terrible quality of life (compared to what they make yearly) and are ridden with corruption and massive uncanny politics (hey Singapore).

When do you people realise that fiscal heavens pose a threat to global stability and will ultimately lower everyone's quality of life? That guy Eduardo, who left the US and will stop paying taxes? Well, those are millions of dollars that aren't going to the US purse to pay for the NHS, the army, the police, you name it.

And in Singapore all that money will stay in his pocket, gaining dust. "Oh, he'll invest", you say, yeah sure, right, he'll invest in stocks, because that's he does, and especially in companies that bring little of productive to the economy, and which will be a huge flop in the future (hey facebook).

[hellheaven1987]

All you people defending here fiscal heavens like Singapore make me laugh.

Besides Switzerland fiscal heavens usually have a terrible quality of life (compared to what they make yearly) and are ridden with corruption and massive uncanny politics (hey Singapore).

When do you people realise that fiscal heavens pose a threat to global stability and will ultimately lower everyone's quality of life? That guy Eduardo, who left the US and will stop paying taxes? Well, those are millions of dollars that aren't going to the US purse to pay for the NHS, the army, the police, you name it.

And in Singapore all that money will stay in his pocket, gaining dust. "Oh, he'll invest", you say, yeah sure, right, he'll invest in stocks, because that's he does, and especially in companies that bring little of productive to the economy, and which will be a huge flop in the future (hey facebook).

Someone is bitter that he did not move to Portugal...

[Astaroth]

Someone is bitter that he did not move to Portugal...

Someone makes a troll post with a stupid ass smiley, adding nothing to the thread whatsoever.

Anyway, Menelik, I'm still waiting. At this speed of digging the hole will soon reach Singapore.

[Condottiere 40K]

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[MathiasOfAthens]

Menelik is your point that he is rich and escaping paying US taxes because they are high and we should perhaps lower our taxes so the rich dont leave? If so thats kinda ridiculous. For one the rich can live a rich and comfortable life in a country with low taxes like Indonesia where he escaped to. I could honestly care less if he left and wants to live in Asia. So what he made his fortune in the states, he renounced his citizenship and will have to reapply for visas to come here but seeing as he is rich he can buy whatever he wants and have it shipped to him in Asia.

[bushbush]

He can't do in Singapore with that money except investing it, which means the money will go elsewhere anyways like a company in the US or China. Singapore is a city state where you can park your money, but at the end, to generate a return, the money has to go elsewhere.

It doesn't really make a difference in terms of investment and jobs to the US. This guy has parked his money in Singapore for a decade now. The key thing is US government is losing this tax money that is really generated by US consumers.