Friday, May 18, 2012

Facebook co-founder Eduardo Saverin may be banned from the U.S.

People have been haranguing Apple for tax avoidance, legal though it may be, and since it was made public that Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship for the same reason, folks have been hammering him, as well. Those angry at Saverin may have the last laugh.

Sen. Chuck Schumer (D-N.Y.) has unliked Saverin, and so might the U.S. Senator Schumer and fellow Senator Bob Casey (D-Pa.) have proposed the the “Ex-PATRIOT” Act (“Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy”). The act would impose a series of penalties on folks likd Saverin who attempt to avoid taxation as he is attempting to do.

First, it would re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Second, it would levy a mandatory 30 percent tax on the capital gains of anyone who renounces their U.S. citizenship. Finally, it would bar individuals like Saverin from ever re-entering the United States.

To be clear, Saverin has said that he did not renounce his U.S. citizenship simply to avoid taxes. To most, however, a savings of up to $67 million in taxes, which is what calculations and the senators indicate. If Saverin did not intend to leave the country for tax reasons, he sure got lucky, instead.

Tom Goodman, Saverin’s spokesman, told Bloomberg News in an email that “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time."

In an opposing point of view, the senators - and many others - have called Saverin’s move a “scheme” that would “help him duck up to $67 million in taxes.”

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