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?
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.
Do I care? Heck no I will be glad to see fools part with their money and give them to easy street and easy earners. LOL!
C'mon people,why all the hostility?What's the problem?Anybody with a brain stem can see that the U.S. economy has become nothing more than an instrument for entrepreneurs to extract their riches in the short term and then move on to enjoy them somewhere else.Loyalty?Please!?It's a global world of usury free printed money benefitting the elites now,and you pay for it!
Saverin is just benefitting from that.Who cares if the direction of American society suffers from such extreme degrees of cupidity contributing nothing to society-Facebook,after all,doesn't actually make ANYTHING or create jobs. For 5 years now we've seen this in action.JPM,Goldman,MFGlobal,etc.-there is no rule of law required these days .Who cares if our economy and Constitution have been gutted.America and Americans don't matter anymore,only Central Banks with their clever monetary schemes do.
Deal with it.Go back to watching the Miami Heat or Dancing With The Stars,would you,please.Isn't this the kind of country and society you want?
Who cares if America continues to descend into the third world as OTC derivatives and European sovereign bond markets implode simultaneously.Who cares if JPM lost $2 billion dollars.
I admire Saverin for getting out.Who wants to live in a third world cesspool of market fraud,cheap Chinese crap,NDAA,CISPA,unmanned drones in our skies,rampant unemployment,reality TV,energy drinks,uneducated young adults,overmedicated adults,worthless dollars,paralyzed governement,bond fraud,illegal immigrants,endless wars,crumbling infrastructure,extreme wealth disparity,and a general malaise indicative of an apathetic and obese populace.He's smart to pick the meat off the bones of the decaying American dream and then following the realization of that dream to somewhere else.Bravo!
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.
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