Facebook's Saverin: Hero or traitor?
The website's co-founder has moved to Singapore, a country with no capital gains tax.
I am referring, of course, to the case of Facebook co-founder Eduardo Saverin. We recently learned that the 30-year-old has renounced his U.S. citizenship and now lives in tax-friendly Singapore. While Saverin undoubtedly likes Singapore -- he certainly seems to enjoy the country's nightclubs and supermodels -- there's little doubt that tax considerations also spurred the move.
It's unclear how much of Facebook Saverin exactly owns. Estimates range from the 2% stake suggested by The Wall Street Journal to the 4% stake estimated by The Los Angeles Times. At any rate, Facebook will add billions to his bank account.
Facebook reportedly has raised the price range of its IPO this week to between $34 and $38 a share, which could make the company worth as much as $104 billion. Even a 2% stake for Saverin amounts to $2.1 billion.
Singapore doesn't have a capital-gains tax, which makes life very comfortable for someone who recently gave up his U.S. citizenship. Saverin won't escape Uncle Sam completely, though. He'll have to pay an exit tax which could amount to as much as $150 million, the Times reports.
A $150 million tax on a fortune of at least $2.1 billion? That's a ridiculously low rate. And that is at the heart of the ongoing debate over whether Saverin is a hero or a traitor.
Firmly in the hero camp is Forbes, which cheers Saverin's relocation and shakes its finger at the American tax system. Saverin shouldn't support our bloated, wasteful government, writes John Tamny.
"Saverin's decision will starve the feds of revenue they would almost certainly waste, it will force a rethink of a tax code that penalizes income and investment success, and the unconsumed dollars kept from the hands of government will reach today's and tomorrow's businesses," Tamny writes.
I don't know, the odds that Saverin's actions will change the federal tax code seems pretty slim. And more Saverin's dollars seem to be going to bottles of Cristal than to businesses -- at least at this point.
On the other side of the debate is Farhad Manjoo at Pando Daily, who writes that Saverin owes America for nearly all of his success. Saverin reportedly moved to Miami at age 13 to escape Brazilian gangs who planned to kidnap him. If he hadn't come here, Manjoo argues, he wouldn't have lived a safe life, he wouldn't have met Facebook CEO Mark Zuckerberg, and he wouldn't have been able to use our legal system to sue Facebook when the company tried to shut him out.
After all that America has given him, it's not really right for Saverin to take the money and run, Manjoo writes.
"Is this fair? No," Manjoo writes. "It's worse than that, though. It's ungrateful and it's indecent. Saverin's decision to decamp the U.S. suggests he's got no idea how much America has helped him out."
So what do you think, readers? Is Saverin a hero or a zero for renouncing his citizenship and moving to Singapore?
Make sure you take his visa and american passport away so he can not return to the country he deserted after the people made him rich.
ya'all act like he's the first one to do this. thats exactly how the rich get richer: LOOPHOLES.
unfortunately it will never change because the rich are making up the rules to benefit THEM. not us.
Neither hero, nor traitor, just normal. Anyone with means and a bit of economic intelligence will try to preserve as much as possible from taxes. Any reader who disagrees, if you feel so "patriotic", feel free to send whatever portion of your money you can dispense to IRS and stop whining what other people do with their money.
He can live anywhere he wants. It's called freedom. More and more of these billionaire job creators will leave the US to escape our high taxes that pay for all these subhuman leeches who mooch off the federal government.
What can we do? Vote out the socialists in November.
I wonder what we would say if he was a natural born American?
Didn't Apple just move some of its IP somewhere to avoid paying Millions in Taxes? yet we still buy their products like crazy.
Yes fix the loopholes, but his individual contribution will not fix the debt problem, and it certainly wont make a difference to my personal tax bill or yours.
Look at the large Institutions that have Scre**d the American people out of Billions? Leehman Brothers,Morgan stanley, Bank Of America, and more recently JP Morgan chase who alledgedly refer to their clients as 'Muppets" and then sheepishly announce a 2Bn loss. Who is the muppet now eh? Still no one goes to jail or has to pay from their own money for their errors. its all done with the Investors Money so no one cares.
NON of those jokers are in jail, and yet we criticize one guy for keeping his money that he gets without scr****g over a single American. Now if we add together ALL the Bonus's paid to execs of the big banks, THAT would make a difference.
He's a traitor.
I wrote before, you are a liberal until you have to pay taxes to support the bums. Then you renounce your citizenship to avoid taxes. FB will bust just like AOL did back in 2000.
He's just following the tradition begun by all of the British actors, business moguls, rock stars, etc, that became "tax exiles" when their tax system became so onerous in order to support the European brand of Socialism. And the Brits didn't demand that full domestic taxes be paid on money earned overseas in addition to the taxes already paid to those governments, as does the United States.
Get used to it. If Obama is reelected, there will be HUGE tax increases taking effect as soon as 2013 and you will see more and more of the wealthy fleeing the US and taking their $$ with them.
He!!, even the liberal icon, Teddy Kennedy, in his capacity as Chairman of the Kennedy Family Trust, moved over $500,000,000 of his family's money out of the United States after the Democrats took control of the Congress in 2006.
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