This week, I want to talk about evading your taxes and the strategy of former Facebook co-founder, Eduardo SaverinMay 22nd, 2012
This is my segment called, “Knock It Off Already!” from my weekly podcast called, “Look What I Stepped In!”
This week, I want to talk about evading your taxes and the strategy of former Facebook co-founder, Eduardo Saverin, who recently renounced his U.S. citizenship to become a resident of Singapore. And, the opinion on the street is, Saverin did this, in an effort to try and retain as much money as he could from the Facebook IPO payout. And, I’ll tell you what, Americans are upset about it.
I have to say, I really don’t blame the guy for considering all his options. I would, if I was about to make $4 billion dollars. Americans are upset, because Eddie found a legal-loophole for “tax dodging,” and now everybody is all bent out of shape. Knock it off already!
I mean, come on America, to renounce your U.S. citizenship is some serious business. You have to believe that this decision will be a penalizing one for Saverin. Especially, if he ever wants to visit or even do business in the United States ever again. All for a savings of somewhere between $67 to $100 million in taxes from his expected $4 billion dollar IPO payout. That’s chump change. Knock it off!
According to Reuters, Saverin’s decision to renounce his citizenship was based solely on his interest in working and living in Singapore, where he has lived since 2009. Ultimately, this move forces the United States hand in having any legal right to his money. Well, boohoo. I guess, the U.S. doesn’t get their supposed cut this round. It wasn’t like his $100 million in taxes was going to put a big dent in our economy or go towards helping to fix our educational problems and our morale throughout the country. So, stop your crying and knock it off already!
On Thursday, New York, Democratic Senator, Chuck Schumer made some pretty profound statements regarding Saverin’s decision, accusing him of tax dodging and stating that “This is a great American success story gone horribly wrong.” Really? I think, I could find some American success stories that have gone horribly wrong and have impacted Americans in a more profound and disappointing way, just start with oil companies or fracking. Knock it off already!
As a result of this recent and notable exploit, Schumer joined sides with Pennsylvania democratic Senator Bob Casey in drafting legislation entitled the “Ex-PATRIOT Act” which is directed at castigating tax evaders such as Saverin and sending a stern message to future would-be opportunists, that renouncing citizenship to avoid paying U.S. taxes will not be tolerated. Right.
The only reason why this option exists is because lawmakers have made it possible. I’m going to blame this one on a lack of oversight when structuring our tax laws. By the way, American businesses have been using “tax dodging” techniques for years. It’s called offshore tax havens or setting up your headquarters of your Worldwide entity in a country with the least taxes, all while still doing the majority of your business in the States. Fix the loopholes and knock it off already!