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Your best friend is suing you for $600 million, and will soon go into tax exile in Singapore.
May 14, 2012 12:17 PM   Subscribe

Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship ahead of the company's IPO so as to avoid paying capital gains taxes on his shares, which could be worth as much as $3.84 billion.

Saverin, born in Brazil and now a resident of Singapore, made the decision back in September of 2011. While he will pay an "exit tax" on his investments upon leaving the U.S., it is expected to be far less than what he would pay once Facebook's shares go public. In addition, by renouncing his citizenship now, Saverin avoids having to contend with the Foreign Account Tax Compliance Act, which combats tax evasion by U.S. nationals overseas, and which goes into effect in 2013. Saverin is among nearly 1,800 Americans who renounced citizenship last year, compared with just over 200 in 2008.

Writing in favor of Saverin's decision, Doug Bandow in Forbes says the complexity and onerousness of the U.S. tax and regulatory regime make tax flight by the wealthiest Americans more likely. Writing against, Farhad Manjoo in PandoDaily argues that Saverin owes his wealth to the U.S. government's support for education and the Internet, as well as to the comparatively clean and transparent U.S. court system that enabled him to sue Facebook founder and CEO Mark Zuckerberg for his share of the company in the first place.
posted by Cash4Lead (299 comments total) 17 users marked this as a favorite

 
Let's take a look at the scoreboard shall we?

Rich people: Umpity gazillion. Average Joe-taxpayer: nil, not counting Farmville.

Surprise factor: 0.
posted by RolandOfEld at 12:20 PM on May 14, 2012 [54 favorites]


Cause fuck you humanity i got mine
posted by The Whelk at 12:20 PM on May 14, 2012 [97 favorites]


Kind of buried the lede here, no? He still has to pay taxes on all stock he owns as of the time of the citizenship renunciation. Probably less tax than he otherwise would b/c it won't have IPO'd yet. But far from nothing.

I'd go so far as to say the framing of this article and the post is deceptive...
posted by Diablevert at 12:20 PM on May 14, 2012 [9 favorites]


Don't let the door hit you on the way out, jobcreatorasshole.
posted by Thorzdad at 12:21 PM on May 14, 2012 [7 favorites]


Let me simplify this:

"the complexity and onerousness of the U.S. tax and regulatory regime greed makes tax flight by the wealthiest Americans more likely"
posted by HuronBob at 12:21 PM on May 14, 2012 [54 favorites]


I'm not sure I have ever before been so torn between admiration and loathing. I have no doubt I would do the exact same thing in his shoes, but since I'm nowhere near his shoes I shall judge him as a huge douchebag.

On the other hand, it's not as though there is a high likelihood that his potential tax dollars would have been spent on something I find wothwhile.
posted by elizardbits at 12:22 PM on May 14, 2012 [7 favorites]


This makes me sick. They make billions off of the stability of the USA, but do not want to give anything back. Millions of teachers, cops, electricians, and other ordinary Americans created a national structure that allowed him to succeed.

But he would rather cut us loose than support the society from which he reaped his billions. It is shame. The American business ethic is disgusting right now.

The 1% bitch about the pot-holes in the road as they drive around in their limos, but they absolutely refuse to contribute anything to help fix that pot-hole.

Fuck Saverin. Fuck Facebook.
posted by Flood at 12:22 PM on May 14, 2012 [128 favorites]


I shall judge him as a huge douchebag

HE is the huge douchebag, not me. I am superawesome.
posted by elizardbits at 12:22 PM on May 14, 2012 [10 favorites]


This guy did essentially nothing to make Facebook the success it is today, and he's contributing nothing to the well-being of this country.

Fuck Saverin. The courts should have never awarded him any of the fruits of Facebook's success. Zuckerberg may be an asshole, but at least he creates American jobs and pays taxes.
posted by Afroblanco at 12:25 PM on May 14, 2012 [14 favorites]


Before you say, "no fair," remember the tax rate on personal income over S$340,000 is a flat 20% with no deductions. So, yes, he will avoid paying taxes to the country he moved to for his education, but he won't avoid taxes.
posted by The 10th Regiment of Foot at 12:26 PM on May 14, 2012 [2 favorites]


I'm going to be devil's advocate here, I guess: If he's fine with not living in the United States anymore, and indeed hasn't lived here for a while anyway, what's wrong with him renouncing citizenship? If he's living and working in Singapore, let him be a Singaporean citizen.
posted by Holy Zarquon's Singing Fish at 12:26 PM on May 14, 2012 [9 favorites]


Writing in favor of Saverin's decision, Doug Bandow in Forbes says the complexity and onerousness of the U.S. tax and regulatory regime make tax flight by the wealthiest Americans more likely.

Makes it more likely? Maybe, why not? Makes it justified? Well, that's another question, isn't it? If Doug Bandow wanted to write in favor of Saverin's decision, he'd have to address the second question, not the first.
posted by kenko at 12:26 PM on May 14, 2012


Sorry, the tax rate in Singapore is 20%.
posted by The 10th Regiment of Foot at 12:26 PM on May 14, 2012 [2 favorites]


America is going to totally unfriend him if he keeps this shit up.
posted by Slack-a-gogo at 12:27 PM on May 14, 2012 [41 favorites]


I'd go so far as to say the framing of this article and the post is deceptive...

It's just straight up wrong. He doesn't avoid paying capital gains tax on his shares... he has to pay capital gains tax on all the shares, before he even sells them.
posted by smackfu at 12:28 PM on May 14, 2012 [7 favorites]


Dude was in the right place at the right time to make his fortunes...now he's just keeping to that business model.
posted by Burhanistan at 12:28 PM on May 14, 2012 [1 favorite]


Heh, I like how "The Social Network" tried to portray him as a good kid, maybe naive who Zuckerburg tried to screw over. Now everyone is going to hate him.
Fuck Saverin. Fuck Facebook.
I don't really get why this would make you dislike facebook though. I mean, they tried to kick him out and take back his equity, but he sued them and won. On the other hand, facebook does suck.
Farhad Manjoo in PandoDaily argues that Saverin owes his wealth to the U.S. government's support for education and the Internet, as well as to the comparatively clean and transparent U.S. court system that enabled him to sue Facebook founder and CEO Mark Zuckerberg for his share of the company in the first place.
You don't have to be a citizen to use the court system though. And the court system is only a tiny segment of government spending. Anyway, if he wasn't born here and he doesn't live here, I don't really see why he'd want to stay a citizen.
posted by delmoi at 12:29 PM on May 14, 2012 [5 favorites]


How about those who renounce their citizenship for tax purposes not be allowed to return to the United States? Just a thought.
posted by Roentgen at 12:29 PM on May 14, 2012 [20 favorites]


But he seemed like such a nice boy in that movie.
posted by gwint at 12:29 PM on May 14, 2012 [6 favorites]


He's avoiding paying US taxes on the (potential) capital gains he's going to have accrued while a US citizen, in favor of the much lower taxes that will be assessed on him as a citizen of Singapore.
Seems like gaming the system to me.

But the conclusion that the US tax system creates tax exiles is one of the most bullshit things I've ever seen. The US system is incredibly supportive to bazillionaires; it's just that Saverin found one of the few places on Earth that is even more so.
posted by Sidhedevil at 12:29 PM on May 14, 2012 [16 favorites]


...Doug Bandow in Forbes says the complexity and onerousness of the U.S. tax and regulatory regime make tax flight by the wealthiest Americans more likely.

Bullshit. That's the usual boilerplate trotted-out whenever the rich don't want to pay their fair share. Complexity and onerousness? When was the last time any of the wealthiest Americans 1)Actually did their own taxes, and 2) Didn't pay much lower levels of taxes thanks to the expensive accountants they can afford to employ?
posted by Thorzdad at 12:31 PM on May 14, 2012 [26 favorites]


Is he still gonna play Spiderman?
posted by spilon at 12:31 PM on May 14, 2012 [12 favorites]


I am theoretically opposed to this, but realistically the world is probably better off with that money in his hands than in the hands of the US government. He won't be buying F-35s with it, after all.
posted by invitapriore at 12:32 PM on May 14, 2012 [8 favorites]


I reckon I'm old and out of touch and amazed that Facebook makes money.
posted by wrapper at 12:32 PM on May 14, 2012 [2 favorites]


I have no doubt I would do the exact same thing in his shoes, but since I'm nowhere near his shoes I shall judge him as a huge douchebag.

I can only say that he is lucky I am nowhere near his shoes. Or I would leave him a Farmville "present."
posted by GenjiandProust at 12:34 PM on May 14, 2012 [1 favorite]


After the initial middle-class-wtih-no-realistic-hope-of-that-ever-changing rage of OMGHE'SRICHSOEVERYTHINGHEDOESISBAD died down, I thought it was a pretty smart idea.

I've considered doing the same thing, and I don't even have any capital on which to pay gains taxes.
posted by Blue_Villain at 12:35 PM on May 14, 2012 [3 favorites]


the Foreign Account Tax Compliance Act, which combats tax evasion by U.S. nationals overseas, and which goes into effect in 2013

Much is made of the fact that the US is the only country that tries to tax income earned by nationals living outside the country. I think we should go one step further and do the same for US corporations. Whatever shell games they play, whatever foreign subsidiary the profits ultimately end up with, if that company doesn't pay at least the US corporate income tax rate, then the US should take it out of the US company.

So, e.g., if Apple pays little or no income tax in Luxembourg or the British Virgin Islands, then the US should simply take the difference out of Apple, Inc. in Cupertino, plus a fine. If companies don't like it then they can stop playing shell games. I don't know too much about accounting, but it's possible the same effect could be obtained by fixing the way profits are accounted for (e.g. money earned by Apple, Inc. in the US somehow ceases to be a profit once it gets shuttled off to Ireland, then the Netherlands, and then a tax haven).

Alternatively, we could stop trying to tax people outside the country with one caveat: if you are a lawful permanent resident or citizen of a country other than the US, and you live outside the US for longer than a certain period, you should automatically lose your US citizenship. If you don't want to pay US taxes, that's fine, but you shouldn't get the benefits of US citizenship without paying for it, with an exception for people who would be left stateless.
posted by jedicus at 12:35 PM on May 14, 2012 [10 favorites]


Some of the world’s largest wealth-management firms have ramped up efforts to fight tax evasion ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc, Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. all say they have turned away business.

This paragraph is such a "business publication" thing to write. It isn't really relevant to the story, but they want to fit in somewhere that, "GOSH YOU GUYS, the tax evasion industry to trying sooo hard to make sure that all those taxes get paid. Yup, they sure are and it's really tough on them!"
posted by Winnemac at 12:36 PM on May 14, 2012 [3 favorites]


How about those who renounce their citizenship for tax purposes not be allowed to return to the United States? Just a thought.

That appears to already be the case. From 8 USC § 1182:

"(E) Former citizens who renounced citizenship to avoid taxation

Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible."
posted by ReadEvalPost at 12:37 PM on May 14, 2012 [34 favorites]


It will be interesting to see how many comments this thread racks up before somebody besides me and smackfu actually read the fucking article.
posted by Diablevert at 12:37 PM on May 14, 2012 [3 favorites]




I've considered doing the same thing

Moving to Singapore? Go for it, if it appeals to you. Moving to Singapore because it's one of the few high-tech nations with lower taxes than the US? Duuuuuuuuuuuude.

As for the suggestion that this is all just because we're jealous, let me offer in counterpoint Warren Buffett and the Gateses. It's not only people with less money than Mr. Saverin who think that the US tax system is far too accommodating for the ultra-rich.
posted by Sidhedevil at 12:38 PM on May 14, 2012 [1 favorite]


Sorry, but he's a Brazilian now living in Singapore. You could argue that he shouldn't have accepted US citizenship in the first place, fair enough. But I cannot blame him for his decision to renounce it. The US' blatant extra-taxation of people living overseas, and the many laws that affect you even if you're abroad (and affect anyone who deals with you, like banks, etc.) makes it very unattractive to be an American citizen abroad. The only real advantages are the ability to work and live in the US (something that he never will have to worry about anyway, but if he really wants to he can buy a visa any time).

Taxation is fair and all, but I do believe that everybody should pay taxes where they live and/or work (and therefore, in the country whose services they use). The only way to make that happen for a US national is to renounce. Just about any other country on earth asks you for taxes only while you live there.
posted by dlg at 12:41 PM on May 14, 2012 [26 favorites]


Good riddance. If you have that little loyalty to the US, you probably shouldn't be allowed to hold citizenship anyway, especially not if you were loyalty-oathed into that citizenship in the first place. Just wish we could claw back the benefits he's already taken.
posted by saulgoodman at 12:41 PM on May 14, 2012


Seems like gaming the system to me

Which is also how he was able to bankroll Facebook in the first place, considering that the reason he had hundreds of thousands of dollars was that he was able to take advantage of insider knowledge of Brazil's oil industry.

Personally I think he shouldn't be able to undervalue his current unrealized gains for the exit tax, but other than that I don't really see a problem with this. Unless the US decides to disallow people from renouncing their citizenship, then it's always going to be an option for someone to opt out, pay whatever they owe, and then not have to pay taxes to the US on their money anymore. If the US wants to make it more painful, they can always make the exit tax higher. The amount Saverin is saving from this is a drop in the bucket compared to things like the 15% long term capital gains cap and the ridiculously low marginal rates that millionaires pay in the US.
posted by burnmp3s at 12:42 PM on May 14, 2012 [1 favorite]


Kind of buried the lede here, no?

I don't think so. The fact that Saverin gave up his citizenship in order to reduce his tax bill is the story here; that he didn't reduce it to zero is a bit beside the point.
posted by Cash4Lead at 12:43 PM on May 14, 2012 [3 favorites]


Alternatively, we could stop trying to tax people outside the country with one caveat: if you are a lawful permanent resident or citizen of a country other than the US, and you live outside the US for longer than a certain period, you should automatically lose your US citizenship. If you don't want to pay US taxes, that's fine, but you shouldn't get the benefits of US citizenship without paying for it, with an exception for people who would be left stateless.

I'll take that, thank-you very much. I have an unwanted citizenship I would be glad to get rid of, thanks to my place of birth. I haven't lived there since I was a small child, and have absolutely no interest in ever going back or claiming citizenship in a place that means nothing to me.
posted by fimbulvetr at 12:43 PM on May 14, 2012


If you have that little loyalty to the US...

He's Brazillian. He came here to go to Harvard and stayed because his money was invested here (and will make a LOT of money for several Americans who will pay [a pittance of] taxes in America. Now he's moving on. Why are people taking offense at this?
posted by The 10th Regiment of Foot at 12:44 PM on May 14, 2012 [18 favorites]


If you don't like it, you can git out.
posted by wikipedia brown boy detective at 12:45 PM on May 14, 2012 [2 favorites]


I'm mostly bummed that this taints my positive impression of the guy as brilliantly portrayed by Andrew Garfield in The Social Network; his being a loyal, unassuming, somewhat-behind-the-eight-ball dude is such a crucial part of that film, dramatically.

Fuck facts.
posted by eugenen at 12:47 PM on May 14, 2012 [1 favorite]


Moving to Singapore? Go for it, if it appeals to you. Moving to Singapore because it's one of the few high-tech nations with lower taxes than the US? Duuuuuuuuuuuude.

You need a whole lot of high-tech in Singapore just to breathe (not to mention capital).
posted by carping demon at 12:47 PM on May 14, 2012


The Social Network 2: Less Social, Not as Networked
posted by shakespeherian at 12:47 PM on May 14, 2012 [4 favorites]


He's Brazillian. He came here to go to Harvard and stayed because his money was invested here (and will make a LOT of money for several Americans who will pay [a pittance of] taxes in America. Now he's moving on. Why are people taking offense at this?

He's also leaving behind a blue chip company that will be worth ~$100 billion. I'd venture to say that he's given America more than he'll be "taking away."
posted by BobbyVan at 12:49 PM on May 14, 2012 [4 favorites]


If you don't like it, you can git out.

Apparently you'll get tomatoes thrown at you as you leave, though.
posted by Holy Zarquon's Singing Fish at 12:49 PM on May 14, 2012


Seems like gaming the system to me.

Not, THIS is gaming the system. In 1994 billionaire Ken Dart renounced his US citizenship and moved to Belize, then had Belize name him counsel to the US and declare his Sarasota, Florida mansion the consulate so that he could continue living in his US home year round with diplomatic immunity and without paying US taxes. Evidently the State Department nixed the plan, but this young Facebook fella has got nothing on Ken.
posted by The Bellman at 12:49 PM on May 14, 2012 [77 favorites]


I don't see what the big deal is. Capital makes decisions that benefit capital, that's axiomatic. "Loyalty" is a concept that exists only to rationalize dependency.
posted by facetious at 12:49 PM on May 14, 2012 [3 favorites]


On preview what delmoi said.
posted by eugenen at 12:50 PM on May 14, 2012


Oh, agree that other people have gamed the system worse than Saverin. For sure.
posted by Sidhedevil at 12:50 PM on May 14, 2012


If you don't like it, you can git out.

Well, he has apparently already gitten out because he can only avoid U.S. taxes as a non-citizen if he does not reside in the United States.

What is unfair is that he should be forced to pay U.S. taxes even though he pays taxes and is resident in another country. No other nation does this to its citizens - only the sweet land of liberty.

For people not living in the United States, U.S. citizenship is a burden not a benefit. It is one thing to be forced to pay for the benefit, it is another to be forced to pay for the burden.
posted by three blind mice at 12:50 PM on May 14, 2012 [27 favorites]


I've considered doing the same thing
Moving to Singapore?


No, not Singapore per se. But then again not all of us are reading this stateside, as it were.
posted by Blue_Villain at 12:52 PM on May 14, 2012


Amen to that, three blind mice.
posted by fimbulvetr at 12:52 PM on May 14, 2012




the Foreign Account Tax Compliance Act, known as Fatca

How on earth did they not add an extraneous T-starting word to the end of that in order to create the greatest possible acronym? Goddamn amateurs.
posted by elizardbits at 12:54 PM on May 14, 2012 [45 favorites]


He's Brazillian. He came here to go to Harvard and stayed because his money was invested here (and will make a LOT of money for several Americans who will pay [a pittance of] taxes in America. Now he's moving on. Why are people taking offense at this?

He doesn't need US citizenship if he's Brazilian.

I'm not offended--not exactly.

But naturalized citizenship does require taking a loyalty oath. I don't see any evidence of loyalty to the US, and it's not like he doesn't have a home state to escape to, so why should he have citizenship, or why should I play my tiny violin over the US's losing his court system exploiting, economically-parasitic-self anyway?

"Loyalty" is a concept that exists only to rationalize dependency.

Facepalm.
posted by saulgoodman at 12:54 PM on May 14, 2012 [1 favorite]


"Loyalty" is a concept that exists only to rationalize dependency.

What rathole do these people climb out of and we can please board it up?
posted by entropicamericana at 12:57 PM on May 14, 2012 [6 favorites]


I'm mostly bummed that this taints my positive impression of the guy as brilliantly portrayed by Andrew Garfield in The Social Network; his being a loyal, unassuming, somewhat-behind-the-eight-ball dude is such a crucial part of that film, dramatically.
Yeah, that movie was bullshit, though. I mean, little details like the fact that Zuckerburg actually had a girlfriend the entire time he was making "The Facebook", who he's still with got left out for dramatic reasons.
posted by delmoi at 12:59 PM on May 14, 2012 [1 favorite]


If they value his shares realistically when calculating the exit tax then I have no problem with this.
posted by rocket88 at 1:00 PM on May 14, 2012 [1 favorite]


Saverin moved to the U.S. in 1992, and became a citizen in 1998

And he's 30, so he was born in 1982, moved to the US at 10 and became a citizen at 16.
posted by ThePinkSuperhero at 1:01 PM on May 14, 2012


But naturalized citizenship does require taking a loyalty oath.

And here it is:

I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty, of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the Armed Forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely, without any mental reservation or purpose of evasion; so help me God.

I don't really see where he draft dodged or violated the Constitution.
posted by The 10th Regiment of Foot at 1:01 PM on May 14, 2012 [2 favorites]


if you are a lawful permanent resident or citizen of a country other than the US, and you live outside the US for longer than a certain period, you should automatically lose your US citizenship.

Can't accept that, because I don't like the slope. If you are born in the US*, or born to US citizens**, you are a US citizen, and I don't want *ANYTHING* taking that away without the citizen's consent.

I haven't lived there since I was a small child, and have absolutely no interest in ever going back or claiming citizenship in a place that means nothing to me.

If you're serious about this, contact the local US Consulate, who will be happy to tell you what you need to do to formally renounce your citizenship. This is not an unusual situation -- in many cases of dual citizenship, a person will choose to renounce one of them to avoid obligations of that citizenship, such as taxation or military service. The US Consulate will be very careful to inform you of the issues with renouncement, and will require you to fill out several forms and interview twice -- because there's really no going back, they want to make very sure that you understand the issues with renunciation and that you are doing so willingly. They would also like, but do not require, to see proof of citizenship elsewhere, if you don't provide such, they'll warn you about the problems of being stateless.

However, it can be *very* important indeed to have the right of residence in another country if your country goes horribly wrong, so I'd honestly just get and renew my US passport and otherwise ignore the US, and if it turns out that you need to be elsewhere NOW, you have an option that's far better than hoping Country X will offer you asylum.

But if that's not of interest to you, and you want to shed your US Citizenship, it can be done with just a little effort, and the US Consulate will be able to help you.




*Exceptions -- born to foreign diplomats, or enemy aliens during wartime. The exact rule is "Born in and subject to the jurisdiction of the United States." Both owe their allegiance to other nations.

** There's some complications if only one parent is a citizen, and if you're born to two parents who are citizens but have never legally resided in the US, then the child doesn't automatically become a citizen -- but having one of the parents reside in the US for any length of time would grant citizenship to the child. Let's elide the out-of-wedlock issues with one citizen parent, as well.
posted by eriko at 1:01 PM on May 14, 2012 [5 favorites]


He came here to go to Harvard....

And to get away from kidnappers is what I read. Which probably accounts for his not having a lot of homesick for Brazil either. Which is understandable. I've known Colombian ex-pats who buggered out for the same reason.

I am curious though why he took out American citizenship in the first place. Anyone?
posted by IndigoJones at 1:02 PM on May 14, 2012


Really? You guys would have hundreds of millions or billions of dollars, and would try to hang onto every last one of them?
posted by maxwelton at 1:03 PM on May 14, 2012 [2 favorites]


In an age of globalization, when multinational corporations care but for their profits and ow nothing or little to individual nations, why do we look so askance at what one guy is doing to
keep as much money as he can?

Mitt salts away money offshore spots--any do--but keeps his citizenship so he might be president.
Others have also used various devices--read TREASURE ISLANDS--and they have and they keep.
It is, alas, those of us with insufficient oddles of money who must meet tax deadlines and pay up.

If a wealthy guy can live in three or more nations with great homes, whyh must he have a citizenship in one nation and be "loyal" to it?

Now, taxpayers: have you ever in any way cheated a bit on your taxes? Ah, yes But you kept your citizenship! Good for you. Now go forth and let the poor little rich guy alone.
He will pay a very stiff price for knowing he is Not An American Citilzen! and comes 4th of July, he is likely to be very sad indeed.
posted by Postroad at 1:03 PM on May 14, 2012 [3 favorites]


I don't really see where he draft dodged or violated the Constitution.

I never said he did, 10th. I said "good riddance." Why can't I say that? What right of his am I violating in calling him a traitor to his adopted country? To me, he's showing ingratitude and a whole host of other traits that I personally find unappealing. So I'm glad he's not going to be one of my countrymen anymore. Why are you judging me for that?
posted by saulgoodman at 1:06 PM on May 14, 2012


What nonsense. The complexity of the U.S. tax regime is what keeps the effective tax rates of the rich low. A less complex system would have the rich paying more. Just because a flat 17% is the most simple system, it doesn't mean all sane tax systems are byzantine.
posted by spaltavian at 1:10 PM on May 14, 2012 [5 favorites]


Renouncing US Citizenship is expensive and onerous. Having an unwanted citizenship in the US is like belonging to a cult that won't let you out. I can't help where I was born, but I know what country my loyalty belongs to, and it sure as hell isn't the US. There is some sort of complete lack of understanding by many Americans that not everyone in the world wants US citizenship or thinks it is a great thing to have. I don't ever want an American passport, I have absolutely no desire to ever live there. If the shit hits the fan so bad in Canada that suddenly I have to escape, well, I think there are bigger problems with the world by then that will have to be dealt with, and chances are the US will also be so far up shits creek that I'll be joining the hordes on rusty boats trying to escape the continent. For all the crap talk about if you don't love it, then leave it, it sure is hard to get out and cut ties.
posted by fimbulvetr at 1:11 PM on May 14, 2012 [6 favorites]


If you are born in the US*, or born to US citizens**, you are a US citizen, and I don't want *ANYTHING* taking that away without the citizen's consent.

This is handled by a requirement that the citizen live outside the US voluntarily in order to lose US citizenship. Seems like implied consent to me, particularly if they are given actual notice of the impending loss of citizenship.
posted by jedicus at 1:11 PM on May 14, 2012




Seems like implied consent to me,

Thankfully, not to pretty much anyone else. Living outside the country is not renouncing the country, and kicking people out for doing it is crazy.
posted by spaltavian at 1:16 PM on May 14, 2012 [3 favorites]


This is so fucking funny.

Me and a a shitload of people I know have been living here for a decade or more, paying a lot of taxes, contributing to making the Internet what it is today. We still don't have a green card, citizenship is decades away.

Why would we like citizenship? These are just a few reasons of the top of my head:

Our spouses can not work, we can get kicked out of the country anytime, we don't get to vote or own guns. Our families can not come to visit, and going to visit our families means we risk being denied entry.

We would not be allowed reentry if we had AIDS or other diseases. We would be denied reentry for having been ARRESTED, not even convicted, for certain crimes.

We have no first amendment right. We can get kicked out of the country for participating in politics.

If we don't end up getting a greencard or citizenships, social security contributions are gone forever.

Some of us want to become citizens because we like this place.

But then the government will sell us a greencard for a million dollars, in some places for half a million, and get us on the fast track to citizenship. I am not kidding, you can look this up.

I am not even a greencard holder, and I still paid half of what I got from the sale of my last startup in taxes.
posted by Ayn Rand and God at 1:17 PM on May 14, 2012 [15 favorites]


In 1994 billionaire Ken Dart renounced his US citizenship and moved to Belize, then had Belize name him counsel to the US and declare his Sarasota, Florida mansion the consulate so that he could continue living in his US home year round with diplomatic immunity and without paying US taxes.

And things like this are exactly why countries with diplomatic treaties in place have the concept of Persona Non Grata* firmly in place. Not only does a country have to accredit you as a diplomat, you then must present your credentials and be accepted as a diplomat. If the country you have been posted to doesn't like it, they PNG you and you're done. They are not required to give any reason for doing so. Once this occurs you have, IRRC, 96 hours to leave the country. After that time, your diplomatic immunity expires and then you're just an illegal alien.

Normally, PNGing an accredited and accepted diplomat is a *big* deal, so it's rare. Not accepting a diplomat when they present is much more common and less of a diplomatic statement, esp. in the case of attachés.

An acceptable PNG is when a diplomat commits a major crime. The host country cannot prosecute as long as the diplomat is credentialed, but can (and in almost all cases, will) PNG the offender. In some cases, the country posting the diplomat will revoke the credentials and waive treaty protections, in which case, the host country will arrest and prosecute, and in other cases, the posting country will charge and prosecute their diplomat for the crime, but not waive immunity. In particular, many countries will not waive immunity for diplomats in the US charged with crimes that might be punishable by death.

* "Unwelcome Person"
posted by eriko at 1:18 PM on May 14, 2012 [3 favorites]


fimbulvetr: you're being ridiculous. All you need to do to lose your citizenship in the US (among even simpler approaches, like walking into the US consulate and simply telling them you are renouncing your citizenship) is try to fly out of an American airport on a foreign passport. It's not expensive and onerous to renounce your citizenship. It takes five minutes and costs $500. What a ridiculous lie.
posted by saulgoodman at 1:18 PM on May 14, 2012


Yeah, that movie was bullshit, though.

As a historical document, maybe. As a film, it was groin-grabbingly awesome.

On the substance -- I actually think Manjoo's point that Saverin took advantage of the US legal system to extract his billions from Zuckerberg is the best argument for why he's being a dick here.
posted by eugenen at 1:19 PM on May 14, 2012


He's also leaving behind a blue chip company that will be worth ~$100 billion. I'd venture to say that he's given America more than he'll be "taking away."

Yes, just think of all he's given this country: the Farmville's, the spam-hookers who try to be your friend, the "likes," my god, man, the jobs! Why, he's practically another Henry Ford!

Zuckerberg should pay this shithead for making him look good.
posted by octobersurprise at 1:19 PM on May 14, 2012 [4 favorites]


I guess you have never tried it, and don't know anyone who has.

And for the record, I have always traveled on a Canadian passport, including into and out of the US.
posted by fimbulvetr at 1:20 PM on May 14, 2012


I never said he did, 10th. I said "good riddance."

You said he was disloyal and a parasite and cited his having taken an Oath of Allegience (as a minor) as evidence. I gave you the wording of the Oath, but I don't see exactly where that oath was violated or makes him a traitor? His financial investment has made a hell of a lot of money for the United States and a few of its citizens. His own departure is neither unlawful nor tragic, it's just his choice.
posted by The 10th Regiment of Foot at 1:20 PM on May 14, 2012 [3 favorites]


Nobody is understanding this correctly. The USA is the only country whose citizens ever need to renounce their citizenship like this, and it's because of the draconian over-reaching US international tax policy.

Normally you pay taxes to the country you live in, regardless of nationality. Say if a Polish guy goes to live in Peru, he then pays Peruvian taxes and not Polish taxes. Makes sense right? You pay where you live.

US tax policy is uniquely annoying. If a US citizen (and only a US citizen) permanently moves to another country, they need to file taxes both in that country and in the US, for the rest of their lives. There's some protection about double-taxation but it's not properly implemented and the process is really complicated and annoying. The bank reporting requirements are bothersome enough that more and more banks refuse to have US citizens as customers due to the paperwork involved.

This leads some people to renounce US citizenship and pay the hefty exit tax (and raiding of their 401k), just to make their life simpler in their adopted country. And this is not tax dodging - it's trying to get away from a US policy that's unfair and not suffered by citizens of any other country when they choose to move.
posted by w0mbat at 1:22 PM on May 14, 2012 [43 favorites]



I shall judge him as a huge douchebag

HE is the huge douchebag, not me. I am superawesome.
posted by elizardbits at 12:22 PM on May 14 [3 favorites +] [!]



...and people say that grammar and punctuation aren't important.
posted by Stagger Lee at 1:25 PM on May 14, 2012


It takes five minutes and costs $500.

You have to wait forever to get an interview, and when you do get one it lasts hours. This is directly from people I know who have recently gone through the process. It is not simple, cheap, or fast anymore.

Why the hell can't I just send a nice certified letter? Why hours of blathering trying to convince me to keep something I DON'T WANT?
posted by fimbulvetr at 1:27 PM on May 14, 2012


It would be a worthwhile endeavor for someone to do a remake of The Social Network, with all the verifiable facts corrected and/or intact, but the good/bad judgments for characters completely reversed.
posted by naju at 1:27 PM on May 14, 2012


I assume US Customs maintains a permanent record database thingy on citizenship-renouncers - I mean, surely, right? I wonder if they give these people a hard time when they attempt to enter the US on a tourist visa using their new homeland's 100% legally-acquired passport.
posted by elizardbits at 1:28 PM on May 14, 2012


Why the hell can't I just send a nice certified letter? Why hours of blathering trying to convince me to keep something I DON'T WANT?

The US government: run by cable companies?
posted by Holy Zarquon's Singing Fish at 1:28 PM on May 14, 2012 [2 favorites]


You said he was disloyal and a parasite and cited his having taken an Oath of Allegience (as a minor) as evidence. I gave you the wording of the Oath, but I don't see exactly where that oath was violated or makes him a traitor?

He's a traitor to the US in the sense that he's going to have to pledge loyalty to another country in order to have citizenship there--how is this loyalty thing so complicated to you? Under US law, pledging loyalty to another nation is treason. Not that it matters in this case. His disloyalty shouldn't be in dispute here.

It's pretty simple: he's renouncing his willingness to defend the US from its enemies and he's formally denouncing his allegiance to the US. That's morally contemptible behavior given the circumstances, especially given how much he's personally gained from economically exploiting the benefits of his citizenship.

His own departure is neither unlawful nor tragic, it's just his choice.

And again, I made no claims about the legality or tragedy of his disloyalty to the nation that helped shield him from Brazilian kidnappers and provided him with the systemic resources and legal support that supported his acquisition of all that enormous wealth. In fact, I basically only said 'Hurrah! Don't let the screen door hit you where the good lord split you!" which was supposed to be a cry of approval.
posted by saulgoodman at 1:30 PM on May 14, 2012


Under US law, pledging loyalty to another nation is treason.

It is?
posted by eugenen at 1:33 PM on May 14, 2012 [6 favorites]


I don't know much about how the US taxes citizens abroad, but I thought that there was a large standard deduction and a deduction for taxes paid to wherever they lived. It always seemed like a good idea to lessen the incentive for countries to lower tax rates in order to attract rich people away from the US and not require more than a little paperwork from most (I know a few US citizens abroad, who all file, but never pay anything). A way to stop the 'race to the bottom' as it were.
posted by Garm at 1:35 PM on May 14, 2012


It will be totally worth it if he then rents a villa in the South of France and records one of the greatest rock and roll albums of all time. Anything short of that and I'm afraid I'm going to have to hold this against him.
posted by The World Famous at 1:36 PM on May 14, 2012 [3 favorites]


What is cracking me up here is people demanding Saverin give back the "benefits" he received as a US citizen.

Speaking as an American who is super pissed about having to still pay taxes to my country of birth even though I have no intention of living nor working there anymore, I fail to see what benefits we're talking about here. An excellent education? I see that. But as for anything else like healthcare or basic human rights (which everyone in the USA gets to have except if you're gay), what benefits?

Anyway, he's going to sleep tonight on his large piles of money in Singapore and not give a fuck about what anything of us think.
posted by Kitteh at 1:37 PM on May 14, 2012 [1 favorite]


In addition, by renouncing his citizenship now, Saverin avoids having to contend with the Foreign Account Tax Compliance Act, which combats tax evasion by U.S. nationals overseas, and which goes into effect in 2013.
You know how else he could avoid having to contend with the Foreign Account Tax Compliance Act? By paying his taxes.
posted by Flunkie at 1:37 PM on May 14, 2012 [2 favorites]


That's morally contemptible behavior given the circumstances, especially given how much he's personally gained from economically exploiting the benefits of his citizenship.

He wasn't born in the United States. He doesn't live in the United States. He didn't choose to move to the United States. He's paid U.S. taxes for more than two years after moving his residence to Singapore, which is the result of a repugnant policy that others have already elaborated on. Seriously, why in god's name should we have permanent claim on the income of anyone who was born in the U.S. or who has ever held a U.S. passport no matter where they are now? Should every rich person in the world be required to pay U.S. taxes on top of those of the country in which they live? Because that's what people seem to think Savarin should do, or else he's on par with child molesters and people who talk in the theater.
posted by Holy Zarquon's Singing Fish at 1:37 PM on May 14, 2012 [13 favorites]


Where it falls through for me is... billions. The guy stands to earn billions and he's worried/concerned wants to keep his hands on as many of those billions as possible.

I can't wrap my pretty little head around that idea - you got billions? You can lose half, maybe even two thirds, and still live at a pretty ok comfort level. Granted, you might have to take a regular Ferrari from the bedroom to the bathroom and not a Bugatti, but still, you're not, like, living in a tent.

Realistically though, as someone who files in the US and in the country I live in, and have seen what a 'simple' tax code can look like - I imagine the accounting headache associated with dealing with all those billions... no, I take it back. In for a penny in for a pound. He's going to be crawling with accountants anyway, how big a part of their workload would be devoted to reconciling the byzantine glory of the US tax system anyway?

The Bachmann story is far more compelling but, also a different thread...
posted by From Bklyn at 1:37 PM on May 14, 2012 [1 favorite]


You have to wait forever to get an interview, and when you do get one it lasts hours ... It is not simple, cheap, or fast anymore.

But, surely, something worth doing is worth putting in the effort to do.
posted by octobersurprise at 1:38 PM on May 14, 2012


There needs to be a film version of "Masters of Doom", because the characters therein aren't total assholes.
posted by hellojed at 1:38 PM on May 14, 2012 [1 favorite]


Saverin has obviously found it expedient to remain in Singapore, but I wonder if he would've done it if Singapore allowed dual-citizenship. Martial artist and action hero Jet Li also renounced his US citizenship in 2009 when he and his family became a Singaporean citizens, but it looks like he was more motivated by cultural rather than financial reasons.
posted by peripathetic at 1:40 PM on May 14, 2012


Under US law, pledging loyalty to another nation is treason.
Where did you get that from?

Treason is the only crime that is explicitly defined in the Constitution itself:
"Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort."
"Pledging loyalty to another nation" is none of those things, with the possible exception of pledging loyalty to an actual enemy nation during time of war.
posted by Flunkie at 1:40 PM on May 14, 2012 [3 favorites]


>This guy did essentially nothing to make Facebook the success it is today, and he's contributing nothing to the well-being of this country.

He's never done nothin' for nobody. Let's take his money!
posted by 2N2222 at 1:40 PM on May 14, 2012 [2 favorites]


he's going to sleep tonight on his large piles of money in Singapore and not give a fuck

And there in lies the disintergration of civil society. Forget the social contract. Forget your community.
Business equals an immoral lack of conern for the society around you - and this is business.
posted by Flood at 1:40 PM on May 14, 2012


Even if you were just born in the US, and never spent more than those first few hours or days on US soil, you have to file taxes every year. And file paperwork on ever single account you have interest in. Every year. Including retirement accounts, children's educational savings plans, anything you can sign for. Each missed piece of paperwork can result in a $50,000 fine, whether you owe money or not. ONEROUS.
posted by fimbulvetr at 1:40 PM on May 14, 2012 [11 favorites]


Let me simplify this:

"the complexity and onerousness of the U.S. tax and regulatory regime greed makes tax flight by the wealthiest Americans more likely"


Whose greed would that be?
posted by 2N2222 at 1:41 PM on May 14, 2012


Well, taking a loyalty oath to a foreign government can cause you to lose your citizenship.

That's part of why, as I understand it from my inquiries about my own citizenship status, I can't claim dual citizenship to Germany. (It's complicated but I may already have a legal claim to dual citizenship in Germany, but even if I don't, I have a very strong claim on personal grounds and under German law, I could easily become a dual citizen--but US law won't allow that because it would require me to take a loyalty oath to Germany, which is prohibited and would in effect amount to a renunciation of my US citizenship.)
posted by saulgoodman at 1:42 PM on May 14, 2012


saulgoodman: "He's a traitor to the US in the sense that he's going to have to pledge loyalty to another country in order to have citizenship there--how is this loyalty thing so complicated to you?"

You keep using that word. I do not think it means what you think it means.
posted by mullingitover at 1:42 PM on May 14, 2012 [7 favorites]


Even if you were just born in the US, and never spent more than those first few hours or days on US soil, you have to file taxes every year. And file paperwork on ever single account you have interest in. Every year. Including retirement accounts, children's educational savings plans, anything you can sign for. Each missed piece of paperwork can result in a $50,000 fine, whether you owe money or not. ONEROUS.

This is why it makes me insanely angry that I have to do this even though I no longer live in the US. I don't make squat but what makes me even angrier is that if I didn't file and I did owe the IRS can supposedly come after my spouse, a Canadian citizen. I am happy to pay taxes if I live on US soil, but not so much when my residence isn't there anymore.

Apologies for the derail.
posted by Kitteh at 1:44 PM on May 14, 2012


which is prohibited and would in effect amount to a renunciation of my US citizenship

There is no longer any implicit renunciation of US citizenship. They just ignore your other citizenship(s) and pretend they don't exist. You are American, the rest doesn't matter. There are very, very few ways to get rid of citizenship now, one of which is renunciation.
posted by fimbulvetr at 1:44 PM on May 14, 2012 [3 favorites]


Well, taking a loyalty oath to a foreign government can cause you to lose your citizenship.
First, that's a very different thing than "treason", which is what you claimed.

Second, as the link that you linked to itself says, taking a loyalty oath to a foreign government can cause you to lose your citizenship if you do it with the explicit intention of relinquishing your citizenship.

Seriously, you're overboard here.
posted by Flunkie at 1:45 PM on May 14, 2012 [7 favorites]


Treason is the only crime that is explicitly defined in the Constitution itself:

Okay--fine. Let me clarify this since it's become such a sticking point. I don't mean it's literally legally treasonous. I mean it's morally equivalent to treason in the ever day, non-technical legal sense. Treason in the everyday sense, not the legal sense. Now back to the muddle...
posted by saulgoodman at 1:45 PM on May 14, 2012


Okay--fine. Let me clarify this since it's become such a sticking point. I don't mean it's literally legally treasonous.
Then maybe you shouldn't have said it's treason "under US law".
posted by Flunkie at 1:46 PM on May 14, 2012 [7 favorites]


Should every rich person in the world be required to pay U.S. taxes on top of those of the country in which they live? Because that's what people seem to think Savarin should do, or else he's on par with child molesters and people who talk in the theater.

As I understand it people don't pay US taxes "on top of" those of the country in which they live. Rather, they pay the local taxes and then get a tax credit in the US for the amount they paid to the other country. See this IRS page for some details. (Obviously that's a gross oversimplification; anyone in that situation should hire an accountant.)
posted by jedicus at 1:47 PM on May 14, 2012


if you do it with the explicit intention of relinquishing your citizenship

Not only that, the US basically takes a stance that as no-one would ever do that, they won't believe you even if you claimed that was your reason for taking citizenship.

A CULT I tell you. You can't get out!
posted by fimbulvetr at 1:47 PM on May 14, 2012


Please stop taking me to the floorboards here. I am not literally accusing the guy of committing an act of treason by formally pursuing a lawful bureaucratic remedy. I am accusing him of being disloyal to the US. Since we are discussing the fact that he is renouncing his loyalty pledge to the US, I really don't understand why this is such a controversial claim.
posted by saulgoodman at 1:47 PM on May 14, 2012


Umm--I actually meant, something like "stop taking me to the mat here"; not sure where floorboards came from, but I guess it'll do.
posted by saulgoodman at 1:48 PM on May 14, 2012


Each missed piece of paperwork can result in a $50,000 fine, whether you owe money or not. ONEROUS.

And yet, not as ONEROUS as renouncing one's citizenship, apparently.
posted by octobersurprise at 1:48 PM on May 14, 2012 [2 favorites]


Alternatively, we could stop trying to tax people outside the country with one caveat: if you are a lawful permanent resident or citizen of a country other than the US, and you live outside the US for longer than a certain period, you should automatically lose your US citizenship. If you don't want to pay US taxes, that's fine, but you shouldn't get the benefits of US citizenship without paying for it, with an exception for people who would be left stateless.

The benefits of citizenship are pretty small. I suspect if everyone lost their citizenship tomorrow, quite a few would never notice any difference. The obligations are more well known and disliked, such as serving on juries.
posted by 2N2222 at 1:49 PM on May 14, 2012 [3 favorites]


Then maybe you shouldn't have said it's treason "under US law".

Under US law, it jeopardizes your citizenship. That's the relevant legal point. Sorry if that got muddled by my purple prose.
posted by saulgoodman at 1:49 PM on May 14, 2012


Again, it's "such a controversial claim" because you did say that it was treason "under US law". That you now are saying it's "treason" in some other less-than-legal sense is fine, but why keep pretending that you didn't explicitly claim it in the legal sense?

I'll shut up now, but jeez, seriously, come on, man.
posted by Flunkie at 1:49 PM on May 14, 2012 [3 favorites]


fimbulvetr: "I guess you have never tried it, and don't know anyone who has.

And for the record, I have always traveled on a Canadian passport, including into and out of the US.
"

I'd be careful about that - the laws have changed on that recently, and now if you're a US citizen you must travel on a US passport when entering and exiting the country. A friend of mine who was born in the US but who's lived in Canada all her life nearly got detained at the border a few years ago because she was travelling on a Canadian passport.
posted by Phire at 1:50 PM on May 14, 2012


I don't mean it's literally legally treasonous. I mean it's morally equivalent to treason in the ever day, non-technical legal sense.

I don't see how you can argue it's morally equivalent to treason either... unless you believe that the USA is really some kind of Hotel California nightmare.
posted by BobbyVan at 1:50 PM on May 14, 2012 [2 favorites]


Okay. People are missing the point here. NO ONE ELSE in the ENTIRE WORLD except citizens of the USA and Eritrea have to deal with this crap.
posted by fimbulvetr at 1:51 PM on May 14, 2012


BobbyVan, Facebook is not (yet, perhaps) a blue chip company, and it is not (yet, perhaps) worth ~$100 billion.
posted by oneironaut at 1:51 PM on May 14, 2012


>How about those who renounce their citizenship for tax purposes not be allowed to return to the United States? Just a thought.

Why would this be a good thing? Such a person would be among the most likely to spend lots of money and invest. IS it really a good idea to banish him because he exercised his freedom of choice and hurt America's fee fees?
posted by 2N2222 at 1:51 PM on May 14, 2012


I'd be careful about that
Yeah, I know, which is why I have not travelled to the US in the past year.
posted by fimbulvetr at 1:52 PM on May 14, 2012


The benefits of citizenship are pretty small.

Yeah, who ever benefited from a school, park, road or financial assistance program. Or the court system. Or the internet. Or the availability of literate workers.

I'll shut up now, but jeez, seriously, come on, man.

How many of my comments clarifying the meaning of my original comment do you get to ignore in sticking to this point, though? Got any other points?
posted by saulgoodman at 1:52 PM on May 14, 2012 [2 favorites]


What is unfair is that he should be forced to pay U.S. taxes even though he pays taxes and is resident in another country. No other nation does this to its citizens - only the sweet land of liberty.

America owns your ass, muthafucka!
posted by 2N2222 at 1:53 PM on May 14, 2012 [1 favorite]


I don't see how you can argue it's morally equivalent to treason either... unless you believe that the USA is really some kind of Hotel California nightmare.

Treason means being actively disloyal and working to undermine your country of citizenship. Taking the tax benefits of your wealth to another country or denouncing your loyalty just so you can keep more of your incredible amounts of wealth for yourself when your country of citizenship is in a fiscal crisis, is pretty much the heart and the sole of morally treasonous behavior.

Renouncing your loyalty to avoid paying taxes is pretty much as far as you can go on the moral treason continuum before actually entering into the more literal, dangerous variety. Now, if he were to start an organization dedicated to encouraging other billionaires to renounce their US citizenship, then that, I would argue, would be literal treason.
posted by saulgoodman at 1:57 PM on May 14, 2012


If a US citizen (and only a US citizen) permanently moves to another country, they need to file taxes both in that country and in the US.

There's no tax on anything under the first $90,000.

I'm actually not clear why more countries do not attempt tax their citizens abroad. What do they have to lose? If say, J. Bigbucks grows up in Germany, attends a public university, makes his first billion, and then moves to Malta so he never has to pay taxes again, why wouldn't Germany be upset about this and expect him to contribute back?
posted by Winnemac at 1:58 PM on May 14, 2012


saulgoodman: "Yeah, who ever benefited from a school, park, road or financial assistance program. Or the court system. Or the internet. Or the availability of literate workers. "

Did I miss something? Was he not paying his share of taxes while he was a citizen?
posted by mullingitover at 1:58 PM on May 14, 2012 [3 favorites]


saulgoodman, if you want to become a German citizen and are eligible, feel free to go for it, and rest easy in the knowledge that any loyalty oath you need to take to complete the naturalisation process will not threaten your U.S. citizenship unless you make an explicit point that the reason you are becoming a Germany citizen is to renounce your U.S. citizenship The U.S. government uniformly presumes that, when you declare allegiance to another state (at least one not engaged with hostilities with the U.S.), you are not renouncing your U.S. citizenship unless you explicitly say (and as, fimbulvetr points out, say repeatedly and at length) that you are.

I speak from experience as a dual citizen who has taken an oath of loyalty to an EU nation--the U.S. is absolutely fine with it.
posted by muhonnin at 2:00 PM on May 14, 2012 [3 favorites]


While it is fun to hate on this Facebook guy for escaping his US tax obligations, I have to say the Foreign Account Tax Compliance Act is actually quite onerous and pretty disappointing.

To be clear, this is NOT the statute that insists on Americans paying income tax on their income abroad. No, this is a whole new thing that (1) requires new "asset reporting" for any American with over $50K in foreign assets, and (2) requires foreign banks with US citizen customers to meet new "identification and due diligence procedures with respect to its accountholders." (source)

You read that right - this new statute attempts to impose on foreign corporations, located overseas, the obligation to make reports to the IRS. As a result, some overseas banks are already turning away US citizen customers so they will not have to comply with this law.

In theory this is to prevent rich people from hiding assets overseas. But the impact is much broader than that - for instance, what if you are a US citizen expat living overseas? These places could essentially be your local bank for all intents and purposes. One result is going to be a dramatic decrease in options for Americans looking to save and invest overseas, which really is not a good thing for the US, ultimately.
posted by Joey Buttafoucault at 2:09 PM on May 14, 2012 [10 favorites]


Treason means being actively disloyal and working to undermine your country of citizenship. Taking the tax benefits of your wealth to another country or denouncing your loyalty just so you can keep more of your incredible amounts of wealth for yourself when your country of citizenship is in a fiscal crisis, is pretty much the heart and the sole of morally treasonous behavior.

So, you're going to go with Hotel California nightmare.
posted by BobbyVan at 2:09 PM on May 14, 2012 [1 favorite]


I'm actually not clear why more countries do not attempt tax their citizens abroad. What do they have to lose? If say, J. Bigbucks grows up in Germany, attends a public university, makes his first billion, and then moves to Malta so he never has to pay taxes again, why wouldn't Germany be upset about this and expect him to contribute back?

I can't say I'm upset about the thought of my country doing the same as the US regarding tax on all citizens everywhere. But then, in the UK, it is possible to be a British citizen, live in the UK, yet claim that you're not liable to regular taxation because you have another citizenship. Jonathan Harmsworth, for example, is a very rich man who steals the services of his own country with such an immoral and society-destroying scam. He scrounges the benefits of the UK but pays barely a fraction of his income to its upkeep. At least in the US you have to renounce citizenship before you can fuck over your own country.
posted by Jehan at 2:09 PM on May 14, 2012


@eugenen: On the substance -- I actually think Manjoo's point that Saverin took advantage of the US legal system to extract his billions from Zuckerberg is the best argument for why he's being a dick here.

Fortunately, the US legal system, awesome as it may be (which is debatable), is there for everybody, even non-citizens (even though arguably, citizens get a bit of a bonus, especially when it comes to jury trials). Like it is in all civilized countries, people are generally (theoretically) equal before the law, citizen or not.

@Garm: I don't know much about how the US taxes citizens abroad, but I thought that there was a large standard deduction and a deduction for taxes paid to wherever they lived. It always seemed like a good idea to lessen the incentive for countries to lower tax rates in order to attract rich people away from the US and not require more than a little paperwork from most (I know a few US citizens abroad, who all file, but never pay anything). A way to stop the 'race to the bottom' as it were.

You get to deduct taxes paid to your country of residence. Which means that if you move to a country with high nominal taxes, you're good (think Sweden, France, etc.), if you move to a country with low nominal taxes (think Switzerland, Singapore, Slovakia), the US will take the difference between what you pay and what you would have paid (federal tax only) if you were in the US.

Penalizing moving to places with low tax rates is definitely not a good idea. Countries can have low nominal tax rates for different reasons: They could have a (relatively speaking) low level of services. They could be well-run and waste less money on crap (think Switzerland, or Singapore). They could take a significant part of their taxes via consumption taxes (ie VAT, think all of Europe). Or a combination of all of the above. Or, they could try to lure rich people away from the US. Only in the last case would it make sense to penalize people moving to such a place. The latter case is rather rare, and if your purpose is to dodge taxes, arguably, renouncing citizenship will not be much of a hurdle either.

I do believe that it would be in the US' best interest to stop the onerous overreach of its tax laws (how much money does that bring in, anyway), and begin treating its overseas citizens nicer. I'm sure on balance, they, or their children, are more likely to come back when they were not incentivized to renounce their citizenship. And people from abroad coming back will be something the US needs dearly in the decades ahead, not least to make up for the decline of working-age population after the baby-boomers start retiring.
posted by dlg at 2:10 PM on May 14, 2012 [1 favorite]


"the heart and the soul." oy,

I speak from experience as a dual citizen who has taken an oath of loyalty to an EU nation--the U.S. is absolutely fine with it.

Every time I've taken this up with the consulate in Germany or here in the US, I've been told the same thing. That I can't do this--I think stricter rules applied to Germany in particular because it was a former enemy nation--I don't know. It's been at least a few years since I looked into any of this.

But all this is dancing around the point that none of the arguments on his side place any premium or value on loyalty to one's nation as a starting assumption. I'm not a raving nationalist, but I still think loyalty is a virtue--it's also supposed to be one of the obligations of citizenship. You can't deny that he's being disloyal here. If you're just fine with that because you "see through the man's loyalty trap," then good for you! But that's a discussion about human social values, not about the legal issues.

I was just taking it for granted we can all see there's nothing legally amiss here.
posted by saulgoodman at 2:10 PM on May 14, 2012


Winnemac: "I'm actually not clear why more countries do not attempt tax their citizens abroad. What do they have to lose? If say, J. Bigbucks grows up in Germany, attends a public university, makes his first billion, and then moves to Malta so he never has to pay taxes again, why wouldn't Germany be upset about this and expect him to contribute back?"

I don't know, it makes sense to me. You'd have to pay taxes on the first billion that you made in Germany, and you'd have to pay taxes on any subsequent income earned in Germany, but if your wealth is being generated in Malta, why should Germany get a piece of foreign-generated wealth because you happen to be a citizen? Germany allows non-citizens to attend university for free, too...would you take on a life-long tax-burden because you happened to receive education in a certain place?

What about a less black-and-white situation? My parents received their undergrads and master's degrees in China, their PhDs and PostDocs in Germany, and they moved to Canada for work. They've since become Canadian citizens for ease of mobility, and while they are in Canada, actively contribute to the Canadian economy, and pay all the taxes they need to. My father recently accepted a job in China working with a Chinese company. Why should the money he makes with that company be owed to the Canadian government, who in this instance have not contributed to his ability to get that job? Should he also pay the German government something?

I'm currently working in the US, and I can't imagine the fuss my patriotic coworkers would kick up if they thought the Canadian government was trying to levy tax on the money I'm making in the US, just because I'm a non-resident Canadian citizen.
posted by Phire at 2:11 PM on May 14, 2012 [1 favorite]


You can't deny that he's being disloyal here.

Inasmuch as I'm being disloyal to Delaware because I moved to Virginia.
posted by Holy Zarquon's Singing Fish at 2:13 PM on May 14, 2012 [6 favorites]


So, you're going to go with Hotel California nightmare.

Look, I'm grateful to be here. I love the US. You're not going to win any points with me by comparing it to an inescapable "Hotel California nightmare," and if that's what your experience has been, I'd suggest you might consider expatriating yourself.
posted by saulgoodman at 2:14 PM on May 14, 2012 [1 favorite]


Inasmuch as I'm being disloyal to Delaware because I moved to Virginia.

Inasmuch as he is literally renouncing his loyalty to the US in order to avoid some small portion of his tax liability.
posted by saulgoodman at 2:15 PM on May 14, 2012


All of this merely demonstrates the fundamental unfairness of a system which grants the advantages of jurisdictional arbitrage to one type of person ("corporate persons") but denies it to another type of person (that is, humans).

The government needs to fish or cut bait. Either companies can use jurisdictional arbitrage, or we all can.

...not that they'll actually stand up and make the decision, of course.
posted by aramaic at 2:16 PM on May 14, 2012 [2 favorites]


Wow, talk about losing logic in the course of cutting & pasting, eh?

(hangs head in shame, contemplates suicide)
posted by aramaic at 2:16 PM on May 14, 2012


Inasmuch as he is literally renouncing his loyalty to the US in order to avoid some small portion of his tax liability.

He is literally renouncing his loyalty to a place he literally doesn't live in anymore.
posted by Holy Zarquon's Singing Fish at 2:17 PM on May 14, 2012 [9 favorites]


Good for him.
posted by mrgrimm at 2:18 PM on May 14, 2012


Look, I'm grateful to be here. I love the US. You're not going to win any points with me by comparing it to an inescapable "Hotel California nightmare," and if that's what your experience has been, I'd suggest you might consider expatriating yourself.

Well, it just seems like a self-confident country wouldn't smear its former citizens as "traitors" if they decided to decamp to another country. That's the behavior of a petty tyranny, not an assured world power.
posted by BobbyVan at 2:18 PM on May 14, 2012 [5 favorites]


fimbulvetr: " Why the hell can't I just send a nice certified letter? Why hours of blathering trying to convince me to keep something I DON'T WANT?"

Because for something as MIND-FUCKINGLY IMPORTANT as citizenship, a few hours of blathering is not that big of a deal. US Consulates know how brutally unforgiving international citizenship law is to the mentally disabled and the uninformed, think of it as a free service offered courtesy of the American taxpayer.
posted by Blasdelb at 2:21 PM on May 14, 2012 [3 favorites]


Imagine there are 1000 entrepreneurs. 999 of them go broke, and one makes $1 billion.

You could say that all of those 1000 entrepreneurs have something of value -- a lottery ticket with a potential payout of $1 million. But for 999 of them, that's intangible wealth that they can't pay taxes on.

If one guy collects all $1 billion, and then flees the country, then the government loses out on the taxes for 1000 people. Those people are consuming government services -- maybe even unemployment checks, since they didn't make any money at all.

So while I don't think normal, working US citizens should have to pay taxes while living abroad, I do think entrepreneurs who strike gold should do so. I'd be happy with a $10 million exemption, say.
posted by miyabo at 2:36 PM on May 14, 2012


Miyabo - the problem with your analogy is that the lottery winner does not leave behind a profit-generating organization that employs thousands and acts as a magnet for global talent and capital.
posted by BobbyVan at 2:40 PM on May 14, 2012


Phire,

I was more wondering about some kind of cost benefit analysis for the countries involved, not the individuals. Obviously it's great not to have to pay taxes when you're abroad. It works for me, but I don't see why I'm allowed it. Don't they want my money?

China or India is a fair example because they are both countries that educate and then send abroad a lot of people who become pretty wealthy as dentists or whatever and then don't return. From the perspective of the average person back home, the tax would benefit you because it would hopefully be used on funding roads or schools or something. From the perspective of the government, if they pay their taxes then you get revenue and if they don't pay their taxes then you aren't missing anything anyway.

It seems like a situation that benefits relatively few compared to those whose interests would be served by taxing the "brain drain." Maybe they want to encourage emigration or there is some other argument?
posted by Winnemac at 2:41 PM on May 14, 2012


Hotel California nightmare

That's not a fair characterization. At the Hotel California, you can check out any time you like, but you can never leave. With U.S. tax law, you can leave any time you want, but unless you check out, you have to keep paying for the room, or something.

So I propose that we commission a new version of Hotel California, to be titled Hotel California Nightmare and performed as a mashup of Hotel California and Welcome To My Nightmare by a band consisting of all the Eagles except Joe Walsh and fronted by Alice Cooper. And the Eagles have to be zombies for this performance, so we're going to have to kill them first (which is why I'm excluding Joe Walsh - I don't want to kill him).

And now that that's settled, I think we can close up this thread.
posted by The World Famous at 2:44 PM on May 14, 2012 [12 favorites]


miyabo: "If one guy collects all $1 billion, and then flees the country, then the government loses out on the taxes for 1000 people. Those people are consuming government services -- maybe even unemployment checks, since they didn't make any money at all. "

That's not what Severin is doing. He's actually going to pay taxes on the value of his shares as they stand right now. He's just not paying the tax on what their value might be in the future. It's entirely possible that Facebook could suffer a meltdown a week after the IPO, and Severin's shares become worthless. In that case, he'd have paid a fortune in taxes and Uncle Sam would've made out like a bandit, with Severin left holding a bunch of fancy pieces of paper.
posted by mullingitover at 2:46 PM on May 14, 2012 [4 favorites]


I was hoping that he'd move to Brazil so he could be a Brazilianaire. I'm going to show myself the door now.
posted by raihan_ at 2:53 PM on May 14, 2012 [8 favorites]


Winnemac: "I was more wondering about some kind of cost benefit analysis for the countries involved, not the individuals. Obviously it's great not to have to pay taxes when you're abroad. It works for me, but I don't see why I'm allowed it. Don't they want my money?"

From a cost-benefit analysis perspective, I guess the home countries have nothing to lose by levying tax on their non-resident citizens, though I don't know if I'd agree with the perspective of viewing governments as being profit-driven entities with their citizens being their future investment. I guess we differ in our temporal perception of taxation - I see taxes as things I pay now in order to contribute to the infrastructure of the society that I presumably like and want to continue to exist in the future, not as things that I'm paying the government back for because they helped me out in the past by building roads. Pay it forward, as it were.

From a personal perspective, I'll happily and readily contribute to the society that I am currently living in. When I'm not living in that specific set of social and legal framework anymore, I contribute to another one. I'm fond of Germany and China for having lived there and I'm fondest of Canada for having lived there the longest so far and generally liking the roots I've set down, but I don't feel an intrinsic tie to any specific place just because I am, or have at one point been, a citizen. Maybe I'm alone in that, but I have a hunch that I'm not. As someone pointed out upthread, how is moving to a different country particularly different from moving to a different State? The tax you're not paying in Florida aren't helping your home state any, either.
posted by Phire at 2:55 PM on May 14, 2012 [3 favorites]


You guys get that in virtually EVERY COUNTRY IN THE FUCKING WORLD, all a person has to do is to move- not emigrate, just fucking relocate- to a new country and your tax obligations to your home country disappear? A Canadian (to cite one of hundreds of country examples) who works in, say, Saudi Arabia or some other country with nil or very low income taxes, doesn't have to renounce his Canadian citizenship to avoid filing (and paying) Canadian taxes. All the billionaires in Europe who set up house in Monaco did it to avoid paying taxes in their home countries.

Only the US is different- you have to file taxes, pay taxes if you're in a lower tax jurisdiction, and even file for A FUCKING DECADE after your have FUCKING RENOUNCED YOUR CITIZENSHIP. And even renouncing requires- it REQUIRES- that you demonstrate no tax obligation even if you've been living abroad for decades.

I'd have renounced my citizenship by now if I didn't think it would somehow, some way not only result in my paying some unanticipated tax obligation but also somehow have me pegged as a criminal who would never be allowed back in the country to visit my family in Indiana. Then there is the ten year thing.

Fuck the US. Cheers for this guy- happy for him for having the guts to go public and to hell with all of you who can't wrap your brains around the idea that this sort of thing is done ALL THE FUCKING TIME in countries that don't make it next to impossible for people to emigrate and give up their citizenship.
posted by ethnomethodologist at 2:56 PM on May 14, 2012 [20 favorites]


I love this thread because it pits these two frequently hated on things on Metafilter against each other--perceived corporate greediness and the powers of the US government.

It's interesting to see how this is playing out.
posted by MoonOrb at 3:04 PM on May 14, 2012 [11 favorites]


Not to belabor the point, but there are very few ways to involuntarily lose US citizenship. Getting a second citizenship is not usually one of them. Here is a link to the US Department of State, which lays out the rules very succinctly.
posted by starfishprime at 3:09 PM on May 14, 2012


I do understand how this could seem oppressive for someone making, say, $200k. But the US has FAR more millionaires and billionaires than any other country. If you come to this country and get very rich, it's probably because of something this country did.

I'm pretty sure many smart people in Brazil or Singapore or Germany could have put together a site like Facebook. But it wouldn't have become a hundred-billion-dollar business without the enormous capital market, huge domestic customer base, and educated workforce of the US.
posted by miyabo at 3:10 PM on May 14, 2012


It really is interesting that the United States' significance in global society is so significant that it prevents people from being tax exiles primarily because they do not want to be exiled from the U.S.
posted by The World Famous at 3:10 PM on May 14, 2012


I wonder how much capital gains tax he will have to pay, and to whom,when he sells his shares. As the world economy becomes more globalized it would cool if, as part of free trade agreements and security agreements between countries, a small minimum corporate and personal tax rate were applied to all global income above a certain level to prevent the possibility of tax evasion by changing nationality. Wouldn't it be possible at some point to renounce citizenship of any country to avoid paying any taxes at all? It would be nice if minimal labor protection laws could be applied globally as well.
posted by Golden Eternity at 3:12 PM on May 14, 2012


So I guess I should stop waiting for the new jobs created from the trickle-down of Saverin's wealth?
posted by Chinese Jet Pilot at 3:13 PM on May 14, 2012 [1 favorite]


Wouldn't it be possible at some point to renounce citizenship of any country to avoid paying any taxes at all?

No, because as has been stated above, most countries levy taxes based on residency and not citizenship. It's not "evasion by changing nationality" to want to only pay taxes to the country in which you live and earn your living. Saverin's case is only noteworthy because of the difference in valuation of his shares at different points in time affecting his tax liability. I cannot fathom the moral argument that if he were to earn money now, as a Singapore resident and citizen, that the US treasury has any claim to it, or that Singapore is behaving inappropriately for choosing a taxation system they believe to be adequate for their needs.
posted by dsfan at 3:19 PM on May 14, 2012 [2 favorites]


I cannot fathom the moral argument that if he were to earn money now, as a Singapore resident and citizen, that the US treasury has any claim to it, or that Singapore is behaving inappropriately for choosing a taxation system they believe to be adequate for their needs.

I guess this depends on what his shares were priced at when he paid U.S. taxes on them and what they end up at after the IPO. It's hard to argue that tax owed on the money "earned" in these few days belongs more to Singapore than the U.S.

All the billionaires in Europe who set up house in Monaco did it to avoid paying taxes in their home countries.

I have a feeling the days of easy tax evasion may be coming to an end in Europe.
posted by Golden Eternity at 3:24 PM on May 14, 2012


This is an interesting thread to observe the continued worship of the very rich. Humans love their nobility, and will do whatever they can to bring it back every time it has its head chopped off.
posted by maxwelton at 3:25 PM on May 14, 2012 [1 favorite]


Wouldn't it be possible at some point to renounce citizenship of any country to avoid paying any taxes at all?

That's a good argument for not taxing citizenship, and 99.7% of countries in the world seem to have come to just that conclusion. :)
posted by -harlequin- at 3:25 PM on May 14, 2012 [3 favorites]


I cannot fathom the moral argument that if he were to earn money now, as a Singapore resident and citizen, that the US treasury has any claim to it

I'm pretty sure there are no morals at all involved in making that argument.
posted by elizardbits at 3:26 PM on May 14, 2012


When was the last time any of the wealthiest Americans 1)Actually did their own taxes, and 2) Didn't pay much lower levels of taxes thanks to the expensive accountants they can afford to employ

*slowly raises hand twice*

I am wealthy and I do my own taxes. I often take the standard deduction. It's remarkable how much more complicated income taxes have gotten in only the past 10 years.

and comes 4th of July, he is likely to be very sad indeed.

I LOLed

I fail to see what benefits we're talking about here. An excellent education? I see that.

I LOLed again.

So I propose that we commission a new version of Hotel California, to be titled Hotel California Nightmare and performed as a mashup of Hotel California and Welcome To My Nightmare by a band consisting of all the Eagles except Joe Walsh and fronted by Alice Cooper. And the Eagles have to be zombies for this performance, so we're going to have to kill them first (which is why I'm excluding Joe Walsh - I don't want to kill him).

Will you marry me?

If you come to this country and get very rich, it's probably because of something this country did.

That is a ridiculous assumption.
posted by mrgrimm at 3:27 PM on May 14, 2012 [3 favorites]


I don't get it. Do you call someone an asshole when they collect your rent in Monopoly?

Eduardo Saverin didn't make the rules, he's just playing the game.
posted by TonyRobots at 3:36 PM on May 14, 2012


According to Wikipedia he has been Singapore resident since 2009 (no exact date given). According to this timeline Facebook valuation hit $10B in 2009.

So 9/10th of his worth was created while being Singapore resident, thus IRS is raiding tax revenues from Singapore residents.
posted by zeikka at 3:38 PM on May 14, 2012 [2 favorites]


If you come to this country and get very rich, it's probably because of something this country did.

And if you want to live elsewhere, it's probably because of something this country did.
posted by -harlequin- at 3:39 PM on May 14, 2012 [2 favorites]


Do you call someone an asshole when they collect your rent in Monopoly? Eduardo Saverin didn't make the rules, he's just playing the game.

I'm certainly not calling anyone an assh*le, but tell that to the teacher who just got laid off or the student who can no longer afford tuition because of lack of tax revenue.
posted by Golden Eternity at 3:44 PM on May 14, 2012


I find it astounding that many of the same people who complain about income inequality in the US also support making it easy to jump ship as soon as they get rich.

A very small group of people make an enormous amount of money, and pay an enormous amount of taxes. They are the lottery winners. Sure, they could never use as much US government services as they pay in taxes. But, if they had not won the lottery, they'd sure as heck be using those services.
posted by miyabo at 3:45 PM on May 14, 2012 [1 favorite]


Should all Singapore residents pay their taxes to US or can they keep some of theirs for their citizens and residents?
posted by zeikka at 3:49 PM on May 14, 2012 [2 favorites]


I find it astounding that many of the same people who complain about income inequality in the US also support making it easy to jump ship as soon as they get rich.

But he is on the hook for a large tax bill based on the capital gains up until the point he renounced his citizenship (by the way, I believe he became a citizen in 1998, when he was about 16). The question isn't about "jumping ship" as soon as someone becomes rich. I'm not sure what the valuation was in September, when Saverin renounced his citizenship, but my sense is he was estimated to be worth around $2 billion (though I don't have a source for this), while the current valuation of the shares is $3.7-3.8 billion. He will, as I understand it, be paying US taxes on the valuation up to that point (the lower "$2 billion"), while capital gains after that are taxable to Singapore. That's quite reasonable--why is it wrong for someone who lives in Singapore and who doesn't want US citizenship to pay taxes to the country in which he has chosen to live? This isn't funneling money through the Cayman Islands or something, this is a person who resides in a place wanting to be subject to its laws. That's completely appropriate.
posted by dsfan at 3:54 PM on May 14, 2012 [1 favorite]


Should all Singapore residents pay their taxes to US or can they keep some of theirs for their citizens and residents?

Those who are citizens of the US, yes. Those who are not citizens of the US, no.

Pretty straight forward, I think.
posted by Rashomon at 3:56 PM on May 14, 2012 [1 favorite]


I find it astounding that many of the same people who complain about income inequality in the US also support making it easy to jump ship as soon as they get rich.

Technically, if he renounces US citizenship, he is reducing income inequality in the USA, by removing an outlier.

Besides which, I complain about income inequality, but if denying people the right to live in the rest of the world - like the rest of the world lives - is your solution, you're doing it wrong. The USA is just flat wrong on this one - it taxes non-citizens who reside in the USA and citizens who don't reside in the USA.
No-one does that. It's unfair and immoral and a royal PITA. The US should have its cake or eat it.
posted by -harlequin- at 3:57 PM on May 14, 2012 [13 favorites]


The US should have its cake or eat it.

Or at least not complain when people recognize that it's being an unfair asshole, and choose to opt out.
posted by -harlequin- at 3:59 PM on May 14, 2012


All the billionaires in Europe who set up house in Monaco did it to avoid paying taxes in their home countries.

The fact that you say that like it's a good thing, instead of an obvious and transparent scam that the good citizens of France and Germany and so on should not put up with for another instant, is deeply weird to me.
posted by ROU_Xenophobe at 4:05 PM on May 14, 2012 [4 favorites]


I find it astounding that many of the same people who complain about income inequality in the US...

That's not really all that cognitively dissonant, is it? People living in a society that benefits them should be taxed by that society, regardless of their social standing. I happen to think progressive societies should have progressive taxation, regardless of their taxpayers' citizenship statuses. If they no linger live in that society, they're no longer taxed by that society, and should instead get taxed by another, again regardless of social standing. Rich non-US residents doing business get taxed by the US as well - where's the disconnect?
posted by Phire at 4:07 PM on May 14, 2012


Do you call someone an asshole when they collect your rent in Monopoly?

Every fucking time. It's House Rule #36, Title 8, Section 4, Subsection B, Paragraph 9(a).
posted by Revvy at 4:10 PM on May 14, 2012 [4 favorites]


Many seem very confident, but at this point in the thread there I don't think that anyone has made an argument that the average citizen of any country would be better off without this law. Bandwagon "everyone does it so it must be right" talk isn't very convincing. Interestingly, I remember there being some other thread a while back where this came up and reaction was was suprised enthusiasm for the idea.
posted by Winnemac at 4:10 PM on May 14, 2012


I don't think that anyone has made an argument that the average citizen of any country would be better off without this law.

What law?
posted by mrgrimm at 4:13 PM on May 14, 2012


zeikka: Should all Singapore residents pay their taxes to US or can they keep some of theirs for their citizens and residents?

Rashomon: Those who are citizens of the US, yes. Those who are not citizens of the US, no.

Pretty straight forward, I think.


By that logic illegal/ undocumented immigrants shouldn't be paying US taxes. The world-wide taxation of American citizens is pretty unique, but I guess global taxation comes with having global police force.

I think taxation should follow with bona fide residency.
posted by zeikka at 4:14 PM on May 14, 2012


I think the fact that the US taxes non-resident citizens on foreign earned income is undeniably shitty.

I don't think it's so clear that the US doesn't have a rightful claim to capital-gains taxes on US investment income.
posted by junco at 4:19 PM on May 14, 2012 [5 favorites]


Winnemac: I prefer to live in a world where people are not held hostage to their place of birth.

Globalization takes on a destructive enough element from the disconnect between giving capital unfettered global freedom but labor isn't allowed the same freedom. Adding additional restrictions to the movement of labor will just make it worse.

Residence is something you choose, place of birth is something forced upon you. I prefer a world where you are subject to the government you choose.
posted by -harlequin- at 4:24 PM on May 14, 2012 [5 favorites]


It's interesting to see the Metafilter community that usually favors increasing the tax burden of the very rich suddenly advocating a tax regime that would encourage those very rich individuals to avoid taxation by using their substantial resources to establish residency in another country.

Would those of you who are advocate elimination of the current U.S. system of taxing citizens regardless of country of residency (albeit at a lower rate than if they were U.S. residents) be OK with the foresseable consequence that super rich people would simply move to their house in Monte Carlo or whatever and thereby avoid paying U.S. taxes?
posted by The World Famous at 4:48 PM on May 14, 2012


advocating a tax regime that would encourage those very rich individuals to avoid taxation by using their substantial resources to establish residency in another country.

Uh... you do know that other countries have taxes, right?

I (greatly) support paying taxes to your society. I am less supportive of paying taxes to some random other society.
posted by -harlequin- at 4:53 PM on May 14, 2012 [6 favorites]


Harlequin,

That makes some sense, but since the taxation does not affect the first $90,000 earned we aren't really referring to a particularily onerous factor when it comes to limiting freedom of labor. I believe that only about 5% of Americans even make that much in a year. The real impediment to freedom of labor comes from a foreign governmen's visa restrictions they or whatever requirements are in the country of citizenship one would want to switch to.
posted by Winnemac at 4:54 PM on May 14, 2012 [1 favorite]


Winnemac: The impediment is a little greater than that - you must prove, every year that you don't owe money, and this is not always simple. You can't open a bank account like other residents because banks don't want to deal with your place-of-birth's bullshit. If you screw up, you can be heavily penalized, etc.

but yes, I absolutely agree the impediment of visa and immigration laws is much, much larger.
posted by -harlequin- at 4:57 PM on May 14, 2012 [1 favorite]


Uh... you do know that other countries have taxes, right?

Monaco levies no personal income tax. And the weather and food are fantastic.
posted by The World Famous at 5:00 PM on May 14, 2012 [1 favorite]


If you read the linked articles you can see that it isn't even primarily about the money: the non-financial consequences of expatriate US citizenship are immense. Eduardo probably has a bank account in Singapore. If that bank wants to do business in the USA (many foreign banks have at least one office in the USA) it will have to report on Eduardo's dealings with it. Let's suppose Eduardo wants to invest money in a Singaporean business. That business will have to comply with IRS inspection requirements. I don't know whether Eduardo is married, but suppose he is. His wife's accounts will also be subject to IRS inspection, so that the IRS can make sure that it isn't a joint account. These are onerous burdens with onerous penalties that affect Eduardo's interactions with other people. It isn't just the burden of compliance - it's the possibility that you might make a mistake and find yourself prosecuted in the USA, or even arrested when visiting there.

The funny thing is that expatriate taxation doesn't actually raise very much money for the USA, and expatriates with dual citizenship can just avoid telling their bank that they're US citizens. Seriously wealthy expatriates, like Eduardo, can just renounce their US citizenship and avoid the problem altogether. So it's a huge regulatory apparatus that penalises US citizens and their friends for no good reason, and encourages expatriates to cut off ties with the USA. This can't be good for the country.
posted by Joe in Australia at 5:00 PM on May 14, 2012 [15 favorites]


For what it's worth though, if the USA could streamline it, such that people under $90k didn't have to file or worry about all that bullshit, and you had to have lived a substantial portion of your life in the USA, then I wouldn't argue - it would become a problem that's great to have.

Ie, taxing citizens is something I could see being made to work. But I don't see that when I look at US tax policy. I see a system that punishes innocent people while largely failing to achieve what it sets out to do. So while I argue against it, I'm not going to argue against it being fixed. :)
posted by -harlequin- at 5:07 PM on May 14, 2012


Thorzdad: ...Doug Bandow in Forbes says the complexity and onerousness of the U.S. tax and regulatory regime make tax flight by the wealthiest Americans more likely.

Bullshit [...]When was the last time any of the wealthiest Americans 1)Actually did their own taxes...


This, times a thousand. Which is more likely?

a) Someone with a lifetime devotion to making as much money as humanly possible is *gasp* really fucking greedy.

or

b) The personal accountants of the super rich are, across the board, worse at their jobs than the average H&R Block accountant, and can't be bothered to figure it out because taxes are haaaard.
posted by jason_steakums at 5:15 PM on May 14, 2012


The World Famous: Monaco levies no personal income tax. And the weather and food are fantastic.

So why do you think more people don't live there? I suggest that part of the reason is that it has a really high VAT and a high cost of living, so you're effectively taxed well over 20%. And a lot of people like living where they do already.

But most importantly - tax exile is a lot less profitable than you think. Australia and most foreign jurisdictions tax local residents and local income. If the USA had these rules then it would tax Eduardo's Facebook income even if he lived in Monaco, and it wouldn't need to worry about Eduardo's foreign bank accounts and foreign business partners.
posted by Joe in Australia at 5:16 PM on May 14, 2012 [1 favorite]


Would those of you who are advocate elimination of the current U.S. system of taxing citizens regardless of country of residency

You mean doing what the entire rest of the world does, yes?

be OK with the foresseable consequence that super rich people would simply move to their house in Monte Carlo or whatever and thereby avoid paying U.S. taxes?

Seems to be OK for the rest of the world. Let's flip this around: would those of you who are OK with the utterly bizarre US practice of trying to collect taxes from people who live in other countries be OK with the foreseeable consequences of having every country in the world adopt the same policy? What a titanic mess that would be.
posted by Mars Saxman at 5:17 PM on May 14, 2012 [2 favorites]


If you read the linked articles you can see that it isn't even primarily about the money:

Saverin’s estimated gain, and subsequent tax bill, would be based on an appraisal by his tax advisers. They could have valued his Facebook stake at less than it will be worth once shares trade publicly, reducing his liability.


It seems these shares were acquired by Saverin before he moved to Singapore, and they probably haven't been taxed at all yet. Since his pre-IPO price has probably been manipulated downwards he avoids taxation on the full value of the shares by renouncing citizenship. It seems like there may be good points made about the unfairness of the U.S. non-resident tax policy, but I don't think it applies here, to the $3.8B he has made from facebook. If the U.S. only taxed based on residency, I would guess facebook employees could just work off-site in the Cayman Islands for a few months or a year during the IPO to avoid paying taxes.
posted by Golden Eternity at 5:18 PM on May 14, 2012


So why do you think more people don't live there?

Given that it's the most densely populated country in the world, I'm going to go ahead and guess that everyone in the world who wants to live there and can afford to live there does live there.

I suggest that part of the reason is that it has a really high VAT and a high cost of living, so you're effectively taxed well over 20%. And a lot of people like living where they do already.

You're right that moving to Monte Carlo is only a tax advantage for someone whose personal income tax in their home country is more costly than the cost of living in Monte Carlo.

Seems to be OK for the rest of the world. Let's flip this around: would those of you who are OK with the utterly bizarre US practice of trying to collect taxes from people who live in other countries be OK with the foreseeable consequences of having every country in the world adopt the same policy? What a titanic mess that would be.

Why would that be a titanic mess? It would be expensive and complicated for those countries to enforce, just as it is for the U.S., sure. And it would have the same policy implications as it has for U.S. citizens, yes.
posted by The World Famous at 5:21 PM on May 14, 2012



Why the hell can't I just send a nice certified letter? Why hours of blathering trying to convince me to keep something I DON'T WANT?
posted by fimbulvetr


T Mobile runs US embassies?
posted by spitbull at 5:24 PM on May 14, 2012


America owns your ass, muthafucka!

Whereas in Soviet Russia, ass owns you... ?
posted by Hal Mumkin at 5:32 PM on May 14, 2012


Golden Eternity wrote: If the U.S. only taxed based on residency, I would guess facebook employees could just work off-site in the Cayman Islands for a few months or a year during the IPO to avoid paying taxes.

Why would this let them avoid taxes? Facebook is a company in the USA; the shares are listed locally; they would attract capital gains tax when they are sold. If the Facebook employees did some sort of sneaky off-the-books sale outside the USA it would just push the problem down to the next purchaser - and every time shares were sold this way it would make it more difficult for a shareholder to exert his or her rights to the shares and their dividends. Eventually it would be worth registering the transaction in the USA just to clarify everything.

You can assume that every country that follows the pattern I described (tax local residents and local income) has ways of dealing with things like this, because it would be big news if they didn't.
posted by Joe in Australia at 5:55 PM on May 14, 2012 [1 favorite]


I'm certainly not calling anyone an assh*le, but tell that to the teacher who just got laid off or the student who can no longer afford tuition because of lack of tax revenue.

That's exactly my point, Golden Eternity. This may be an outrage but it's being misdirected at Saverin rather than the system at large. To tortuously extend my previous metaphor, don't hate the player, hate the game.
posted by TonyRobots at 6:00 PM on May 14, 2012


It's professional-grade cognitive dissonance when you can say out of one side of your mouth "it's unAmerican to tax me like this", and, out of the other side say, "only in America could I succeed like this."

Greedy people suck.
posted by Benny Andajetz at 6:06 PM on May 14, 2012


Maybe he'll donate the tax-bill difference to charity!

Ha. Ha ha ha! Ahahahahahahahhahahhah! fuck
posted by stavrosthewonderchicken at 6:08 PM on May 14, 2012 [3 favorites]


That's exactly my point, Golden Eternity. This may be an outrage but it's being misdirected at Saverin rather than the system at large. To tortuously extend my previous metaphor, don't hate the player, hate the game.

I don't agree. I think we should feel a personal obligation to act ethically and follow rules, not do whatever we can get away with to advantage ourselves at the expense of anyone else. Especially since this is not a monopoly game and the suffering of people who rely on tax dollars is very real.
posted by Golden Eternity at 6:12 PM on May 14, 2012


I truly don't understand the mindset of people like this.

If I had a windfall a hundredth of this size, I'd be smiling from ear to ear as I stroked that fucking tax check.
posted by Benny Andajetz at 6:16 PM on May 14, 2012


Derek Sivers, who made $23 million selling CD Baby, also gave up his citizenship. I don't see him writing a blog post on why he did that anytime soon...
posted by blazingunicorn at 6:18 PM on May 14, 2012 [1 favorite]



You can assume that every country that follows the pattern I described (tax local residents and local income) has ways of dealing with things like this, because it would be big news if they didn't.

In terms of capital gains, non-resident aliens are subject to no U.S. capital gains tax, and no money will be withheld by the brokerage firm. This does not mean, however, that you can trade tax free - you will likely need to pay capital gains tax in your country of origin.

Perhaps anyone who trades U.S. securities (resident or not/citizen or not) should be required to pay the same capital gains tax to the U.S., but I'm sure there would be some day traders somewhere screaming about how unfair this is. And I would think it would be extremely difficult to enforce.
posted by Golden Eternity at 6:24 PM on May 14, 2012 [1 favorite]


Really? You guys would have hundreds of millions or billions of dollars, and would try to hang onto every last one of them?
posted by maxwelton


Absolutely, yes. You earn it, you keep it. This idea of some obligation of the well-off/weathly/rich to share is a fantasy of the less well off. Don't have money? Its not his, mine or anyone elses problem.
posted by blaneyphoto at 6:31 PM on May 14, 2012


oh thank god, someone is advocating for the rich and powerful. This is so important you guys, they really don't have enough support out there, every little bit helps.
posted by The Whelk at 6:34 PM on May 14, 2012 [2 favorites]


Perhaps anyone who trades U.S. securities (resident or not/citizen or not) should be required to pay the same capital gains tax to the U.S.

Wait, you think capital gains taxes should be assessed based on the origin of the investment and not the residence of the purchaser? I don't know of anywhere that does that, and it seems bizarre to me--if I, a US resident (and citizen) purchase stock in a foreign country that has no capital gains taxes, should I then pay no tax on any gains I receive? And why would a country want to discourage investment in its securities in such a fashion?
posted by dsfan at 6:34 PM on May 14, 2012


This idea of some obligation of the well-off/weathly/rich to share is a fantasy of the less well off.

How very Nietzschean.
posted by junco at 6:37 PM on May 14, 2012


Don't have money? Its not his, mine or anyone elses problem.

That would be nice if people lacking food were happy to lie down and die.
But sometimes, people don't do that.

Income inequality is everyone's problem.
posted by -harlequin- at 6:39 PM on May 14, 2012 [2 favorites]


That would be nice if people lacking food were happy to lie down and die.
But sometimes, people don't do that.


See, that's where the problem lies. In any case, its not this guy's obligation to support them - or mine - or yours. Some people don't get dealt a good hand in life for whatever reason. Its not anyone elses job to to support them unless they want to... and having a huge chunk of your wealth taken by the government to do that is just plain wrong.
posted by blaneyphoto at 6:45 PM on May 14, 2012


I don't know of anywhere that does that, and it seems bizarre to me

Actually I take that back, I believe there are some jurisdictions that do just that, though I think it's often explicitly to discourage investment ("hot money"). Either way, I'm completely comfortable with a tax system that says a Singapore resident and citizen who invests in America should pay capital gains taxes in Singapore (with the crappy American saving rate, taxing foreign investment is probably fairly low on the priority list).
posted by dsfan at 6:47 PM on May 14, 2012


Its not anyone elses job to to support them unless they want to...

Exactly - if you wish to live in a society (such as, for example, the USA) then you are choosing to undertake the obligations of living in said society in order to reap the benefits.

If you don't want the job of supporting the society that supports you, then leave it. Renounce your citizenship and go live somewhere without any society. And quit whining.
posted by -harlequin- at 6:51 PM on May 14, 2012


Oh blaneyphoto, those are very un-Canadian sentiments. What about 'there but for the grace of God go I'? What about 'am I my brothers' keeper'? In a sense we all are, if we want to live in a peaceful, kind and just society.

I usually hate the kind of comment I am about to make, thinking it sounds fake and annoying but...I really AM sorry you feel the way you do.

What's the other quote..'To those much has been given, much is expected?'

posted by bquarters at 6:55 PM on May 14, 2012 [2 favorites]


And quit whining.

See, I propose that those who think this guy (or anyone) owes them something should be the ones to quit whining. Work harder, make due, deal with your situation... whatever - but don't take some position of entitlement just because someone is doing better than you. Its not yours and if you don't succeed then too bad.
posted by blaneyphoto at 7:01 PM on May 14, 2012


those who think this guy (or anyone) owes them something

I don't think anyone thinks this. The argument has been that society paid a lot of wealth to enable him to do well, and the agreed-on rent for that wealth that he used should be paid.

People are talking about what he owes his (previous) society. It's a straw man to suggest they think he owes them something.
posted by -harlequin- at 7:08 PM on May 14, 2012


Every fucking time. It's House Rule #36, Title 8, Section 4, Subsection B, Paragraph 9(a).

See also the requirement to utter "Bitch trumped my ace" in Euchre.
posted by eriko at 7:57 PM on May 14, 2012 [1 favorite]


"Pledging loyalty to another nation" is none of those things, with the possible exception of pledging loyalty to an actual enemy nation during time of war.

Well, in this post-war world, pledging loyalty to a nation that supports "terroism" is probably enough. If an dual US/Afghani or US/Iranian attempts to renounce US citizenship, are they going to get a fair deal, or are they going to get a one way ticket to Gitmo?
posted by eriko at 7:59 PM on May 14, 2012


delmoi: "Yeah, that movie was bullshit, though. I mean, little details like the fact that Zuckerburg actually had a girlfriend the entire time he was making "The Facebook", who he's still with got left out for dramatic reasons."

Wait, so Zuckerberg isn't still sitting in a law office somewhere, endlessly refreshing Facebook until Rooney Mara friends him? GODS DAMMIT.
posted by Dr. Zira at 8:23 PM on May 14, 2012 [1 favorite]


He is, but for unrelated reasons.
posted by Holy Zarquon's Singing Fish at 8:27 PM on May 14, 2012


I was hoping that he'd move to Brazil so he could be a Brazilianaire. I'm going to show myself the door now.

President Bush received his daily briefing, including the statement: "Yesterday, 3 Brazilian soldiers were killed."
"OH NO!" the President exclaims. "That's terrible!"
His staff sits stunned at this display of emotion, nervously watching as the President sits, head in hands.
Finally, the President looks up and asks, "How many is a brazillion?"
posted by exogenous at 8:31 PM on May 14, 2012 [9 favorites]


So a couple of things:

US citizenship is a clear privilege even if you're permanently resident, or are simply travelling, elsewhere in the world. First, you can enter 169 countries without a visa or with visa-on-arrival, a privilege that only 164 countries extend to Singaporean passport-holders.

Second, and here's where it is crucial, American embassies in far-flung locations actually protect your ass if you get into stupid situations. I've known cases where US citizens were quickly whisked away from Thailand when they got into trouble buying weed in Phuket.

There's absolutely no way Singapore's Ministry of Foreign Affairs, bless their hearts, would ever get involved in such nonsense; again, I've known a case in China where the Singapore embassy said as much to two acquaintances who got involved with mafia and their "supply" of hookers. (Not that it has ever stopped Singaporeans from asking the MFA for help; people have asked for help in resolving apparent discrimination in being served a a smaller portion of KFC chicken compared to what the locals received)

Third, I know quite a few American executives here for whom their companies foot the US portion of their tax bill (income tax, obviously). It's actually written into their contracts; I don't know the details, but they do this weird dodge in defining a certain portion of their compensation as income here but tax in the US. So, for a lot of folk, it's a less of a deal than most of you think.

Fourth, most entrepreneural/ startup types here end up relocating to Silicon Valley. Again, I've known at least one successful startup that got bought over by... a certain famous brand that's all but relocated to San Mateo by now. Location matters, and a lot of hacker-types prefer being closer to action, if social or monetary situations don't hold them back in Singapore.

Fifth, and here's where it gets interesting, while most libertarian-types get these warm fuzzies when they think of countries that offer these tax-based incentives, the reality is that Singapore is a heavily socialist country; the Singapore stock exchange is dominated by government-linked companies, 85% of the population lives in public housing, which in turn is the most expensive public-housing in the world: a three bedroom flat ("four or five room" in local parlance) built by the government is more expensive than a three bedroom condo in downtown Santa Clara (randomly pulled ads in both cases). Cars are heavily taxed; we'd have to pay something to the order of the cost of the car on top of the cost of a car (so to buy a Suzuki Swift, you'd have to pay S$29,000 for the car, but S$62600 for a "certificate of entitlement" that allows you to possess a car for ten years)

And that's before we even get to the local resentment (the comments section) that's building up against these high net-worth individuals moving to Singapore for $$$$ reasons. In a land that's otherwise been historically open to folks from all over the world - Singapore's patriarch, Lee Kuan Yew, often likes to point out that he was the only person to have been born in Singapore in his first cabinet - it's quite jaw-dropping to see how much resentment all this flow of high-net worth individuals has been causing.

Libertarian nirvana this isn't, for all you tax-optimizers; in fact, if anything, this is just the opposite.
posted by the cydonian at 8:48 PM on May 14, 2012 [5 favorites]


The Bellman, the article you linked to about Dart had this info:

Under that law, people who paid more than $124,000 a year in income tax and had more than $622,000 in assets when expatriating themselves were required to pay U.S. taxes on worldwide income for at least five years.

In 2004, that was extended to as long as 10 years.


I wonder if Saverin knows about this law? Of if it includes capital gains. Maybe he'll just ignore the law since he will not be living in the US. I wonder if they can go after him?
posted by eye of newt at 8:58 PM on May 14, 2012 [1 favorite]


Libertarian nirvana this isn't, for all you tax-optimizers; in fact, if anything, this is just the opposite.

This doesn't really matter all that much. What matters is that someone wants to go, and is not allowed to get out of the club without surrendering that magical state of grace called citizenship and/or paying for the privilege. I view this as an issue over one of the most basic freedoms humans have, the freedom to move as one sees fit, regardless of how rich or poor one may be.
posted by 2N2222 at 9:19 PM on May 14, 2012 [3 favorites]


Under that law, people who paid more than $124,000 a year in income tax and had more than $622,000 in assets when expatriating themselves were required to pay U.S. taxes on worldwide income for at least five years.

I wonder if Saverin knows about this law? Of if it includes capital gains. Maybe he'll just ignore the law since he will not be living in the US. I wonder if they can go after him?


The ex pat tax does not apply to individuals who can prove in a ruling with the Secretary of Treasury that their reason for expatriation was not to evade taxes, such as a person with dual citizenship choosing the other country for permanent citizenship.

More than likely he eluded the ex pat tax at the time of his expatriation.
posted by Golden Eternity at 9:41 PM on May 14, 2012


I'm not sure why people think the fact that the US taxes people who "move" out of the country is such a slam dunk argument. Moving means nothing for the wealthy. If you have billions of dollars, you don't even need to move anything. Just buy all new stuff once you get there. You can have identical homes all across the world with the exact same stuff, a couple of cadillacs, etc for what amounts to a pittance. Hell, build a "home" in a country with no taxation for the wealthy, tell the US you live there and tada, no taxes.

Maybe it should be easier for the avg person, but acting like the wealthy live by the same rules that apply to the avg person is just fucking stupid.
posted by stavrogin at 9:43 PM on May 14, 2012


So I was born in the UK (which conferred automatic citizenship), lived my toddler years in Spain (citizenship due to my mom), and then moved to the US (citizenship due to my dad). The UK and Spanish citizenships expired when I was still a minor (can't remember the details, but I didn't have to do anything active). I have lived over a decade here in Japan. I pay taxes to both Japan and the US. Am I right in understanding that, since each of these countries have benefited me, and I was a citizen of 3 of them in the past, and a current resident in the fourth, some of you believe that I'm actually being undertaxed, and should be paying income tax to all four countries?

And, what's more, that even where I to return to the US, I should be triple-taxed based on past citizenships for the rest of my life, not because of anything I chose, but because of where my parents were living when I was born and when I was a toddler?
posted by Bugbread at 9:44 PM on May 14, 2012 [6 favorites]


stavrogin: "Hell, build a "home" in a country with no taxation for the wealthy, tell the US you live there and tada, no taxes. "

From my experience with the 2555 form (and looking over the IRS form real quick), no, you wouldn't qualify just by having a home and telling the US you live there. You would fail both the Bona Fide Residence test and the Tax Home test.
posted by Bugbread at 9:51 PM on May 14, 2012


I'm astonished (and somewhat ... stimulated) to learn that non-resident aliens are not taxed by the USA on capital gains. That's your problem, right there. But checking into Australia's own tax laws, I find that it's more complicated than I thought, because non-residents selling shares are not liable for CGT unless:
  1. the shares are in a private company (e.g., facebook before the IPO); or
  2. they own more than 10% of the company; or
  3. more than 50% of the company's assets are in real estate (e.g., a mining company or property trust).
Foreign investors are still liable for CGT on the sale of other property. I have no idea how we ended up with such a dog's breakfast; you would think that taxing all share transactions would be simpler and would raise more money. I hereby apologise somewhat for being mean about the USAn tax system.
posted by Joe in Australia at 9:56 PM on May 14, 2012


I have lived over a decade here in Japan. I pay taxes to both Japan and the US. Am I right in understanding that, since each of these countries have benefited me, and I was a citizen of 3 of them in the past, and a current resident in the fourth, some of you believe that I'm actually being undertaxed, and should be paying income tax to all four countries?

No. That sounds unfair. I do think you should pay a fee of some sort for your U.S. citizenship. But this is a different case, where Saverin MAY BE evading tax on a massive $3.8B IPO payoff on shares he acquired well before he changed residency.
posted by Golden Eternity at 10:00 PM on May 14, 2012


bugbread, I'm not saying it exists now, I'm saying the people who think that anyone should just be able to move from the US to another country and not be taxed at all in the US are mistaken in thinking that would be the slighest inconvenience to the wealthy.

for the avg person and outliers like you, obviously it'd be different.
posted by stavrogin at 10:02 PM on May 14, 2012


Stavrogin,

What I meant was that even if the law were changed so that there was no taxation for foreign income by non-residents, having a foreign home that you don't actually live at wouldn't qualify you, so you'd still have to pay US tax.

Plus, said hypothetical rich person would still have to pay tax on their US earnings, right? I know when I do my US tax forms, there's a lot about filing for non-resident aliens. So if they had a fake home in Monaco, but lived in the US and were paid by a US company, they'd still be liable for taxes for both residency and income source reasons. They wouldn't be off the hook under the current system, and they wouldn't be off the hook under the residency-based alternative system either. Having a new home that they didn't live in wouldn't benefit them in any way under either system (except that they'd have a bitchin' holiday home).

Golden Eternity: "But this is a different case, where Saverin MAY BE evading tax on a massive $3.8B IPO payoff on shares he acquired well before he changed residency."

I don't even know if "tax evasion" is the word I would use. I always think of "tax evasion" as avoiding taxes you're legally required to pay. In his case, he's leaving, and he's paying tax on what he has, in order to avoid having to pay further taxes down the line. Calling that "tax evasion" seems a lot like saying that buying a TV before a sales tax hike is "tax evasion" because you're doing it to avoid paying more tax later.
posted by Bugbread at 10:24 PM on May 14, 2012 [1 favorite]


Hell, build a "home" in a country with no taxation for the wealthy, tell the US you live there and tada, no taxes.

That's how it works for everyone else in the world. Why do you think the US should be special?
posted by Mars Saxman at 10:25 PM on May 14, 2012


I think Stavrogin was saying "tell the US you live there (even though you actually don't)".
posted by Bugbread at 10:40 PM on May 14, 2012


I don't even know if "tax evasion" is the word I would use. I always think of "tax evasion" as avoiding taxes you're legally required to pay. In his case, he's leaving, and he's paying tax on what he has, in order to avoid having to pay further taxes down the line.

I agree if the estimated capital gain was based on a fair market price at the time of expatriation, which I guess is hard to say pre-IPO.
posted by Golden Eternity at 11:10 PM on May 14, 2012 [1 favorite]


I do think you should pay a fee of some sort for your U.S. citizenship.

I'm a US citizen living permanently in Germany, working for a German company with a salary paid in Euros to a German account. I have no financial ties to the US at all and the only services I get from the American government are ones I pay the consulate for (such as when I paid €30 for them to add pages to my passport). At the same time, FATCA increasingly prevents me from doing perfectly ordinary middle-class things such as opening retirement accounts in the country I live in using the currency I'm paid in, and the idiotic IRS reporting burden means that I pay a CPA €300 every year just to tell the IRS they can go fuck themselves. On top of that, in a few years I will renounce my US citizenship after gaining German citizenship. I'll have pay $495 in order to renounce, as well as file 10 years of projected income tax returns, despite me being neither a tax-evader (I pay more taxes in Germany than I would in the US) nor wealthy.

Why exactly should I pay any more money for the privilege of having my life made needlessly more difficult by a country I don't live in and will never live in again?
posted by cmonkey at 11:32 PM on May 14, 2012 [6 favorites]


Good point.
posted by Bugbread at 11:34 PM on May 14, 2012


Oops, sorry, "good point" was to Golden Eternity's comment.

(Cmonkey, I dunno how complex your finances are, but since you indicate that you're not making enough to pay US taxes, if your finance situation is anywhere close to average (wage income, mortgage, wife, kids, a little bank interest, etc.), you really don't need to be getting a CPA to do your taxes. The first year is a pain in the ass, learning the forms, but it's certainly not 300 euros worth of pain in the ass, and from the second year on, it's much easier, since you've kind of learned the ropes)
posted by Bugbread at 11:38 PM on May 14, 2012



Why exactly should I pay any more money for the privilege of having my life made needlessly more difficult by a country I don't live in and will never live in again?


This is off topic. I was presuming you do get certain benefits being a U.S. citizen--the ability to move back to the U.S. as a permanent resident, have children as U.S. citizens, some legal protection even internationally.
posted by Golden Eternity at 11:46 PM on May 14, 2012


Cmonkey, I dunno how complex your finances are, but since you indicate that you're not making enough to pay US taxes, if your finance situation is anywhere close to average (wage income, mortgage, wife, kids, a little bank interest, etc.), you really don't need to be getting a CPA to do your taxes.

I earn more than the FEIE, so it's not a straightforward IRS filing. There is a lot of paperwork involved, and the laws change every year.

This is off topic. I was presuming you do get certain benefits being a U.S. citizen--the ability to move back to the U.S. as a permanent resident, have children as U.S. citizens, some legal protection even internationally.

None of that explains why you think citizens living elsewhere should pay yet another fee solely because they have a US passport. Those "benefits" don't cost the US government anything, since parents pay to register foreign births ($100!), and the most legal assistance one gets from the US government in Europe is a list of English speaking lawyers should one get arrested.
posted by cmonkey at 12:12 AM on May 15, 2012 [1 favorite]


Cmonkey,

If the issue is just how much you make (and not complicated "I make $15,000 a year in prorated tax-deferred annuity dividend wombats"), just making more than the FEIE (regardless of how much) just means that in addition to filing the 2555, you'll want to file the 1116.

Here's what I'd recommend, assuming you can free one day or two evenings sometime over the course of the year: Do your own taxes for 2011, and compare them against the 2011 tax forms created by your CPA. If any lines don't match by a significant margin, try to figure out why (even if you do it right, they'll probably be off by a little bit, because you don't know exactly what currency conversion rate your CPA used). Unless your finances are really weird, you will find the going hard, but you will likely be able to reproduce what your CPA did, and understand the process. From tax year 2012 on, you'll probably be able to do your taxes in 3 hours or so, and while never fun, it will never be as hard as that first time.
posted by Bugbread at 12:38 AM on May 15, 2012


If this guy were just some guy working at some company in singapore making money there, I could see it as reasonable not to pay US taxes.

The problem with this situation is that the guy's wealth was all created by Americans, in America... and not by him at all! He totally lucked into this money. His "involvement" in FB, his only claim on any of the money all happened in the U.S. That's why it seem so sketchy, I think.
posted by delmoi at 12:39 AM on May 15, 2012 [1 favorite]


Here's what I'd recommend,

You're right, I should see how difficult it is to do it myself this summer (in past years, my situation was more complicated than simple income over FEIE, but not anymore). But my point is really that US citizens living abroad already pay fees for the privilege of having US citizenship - even if that fee is only losing 3 hours of an evening to doing a US tax return and FBAR on top of handling income tax returns in their country of residence.
posted by cmonkey at 12:54 AM on May 15, 2012


Welcome to seventies Britain.

The only difference being that back then, the top income tax rate was 83 percent.
posted by MartinWisse at 1:26 AM on May 15, 2012


It's no longer surprising but still sadding to me to see so many intelligent, even leftleaning people identify themselves with the plight of an oppressed billionaire or multimillionaire.

Nobody who's that rich has earned it, so it's never unfair when part of their money is taken away to help run the country.
posted by MartinWisse at 1:30 AM on May 15, 2012 [2 favorites]


MartinWisse wrote: It's no longer surprising but still sadding to me to see so many intelligent, even leftleaning people identify themselves with the plight of an oppressed billionaire or multimillionaire.

Why shouldn't they? They have to deal with the same tax code, and it's far more oppressive for a relatively poor person. I'm sure any bank would be happy to deal with Eduardo, but many foreign banks have already said that they're dropping expatriate USAn clients because of USAn tax laws.
posted by Joe in Australia at 1:42 AM on May 15, 2012 [2 favorites]


Is anyone else enjoying watching the collision of knee-jerk anti-Americanism with knee-jerk anti-wealthy sentiment in this thread? :)
posted by codswallop at 1:54 AM on May 15, 2012


MartinWisse: "It's no longer surprising but still sadding to me to see so many intelligent, even leftleaning people identify themselves with the plight of an oppressed billionaire or multimillionaire."

So if something annoys a billionaire, I should support it just on that basis?

Steve Jobs was rich, and died of cancer. If I say "cancer sucks", does that sadden you, because I end up identifying with the plight of a billionaire? Should I cheer for cancer instead?

Or, rephrased: As an expat, US income tax law annoys me. I'm supposed to start liking it because some rich guy who I've neither met, seen, nor (before this thread) even heard of doesn't like it?
posted by Bugbread at 2:23 AM on May 15, 2012 [4 favorites]


Just FYI, that $90k thing does mean that if you move abroad for work, and you are not self employed, the income you earn from that work (up to $90k) is probably not going to be taxed by the US.

If you're self employed, forget about it. You have to pay.

If you start a company in a foreign country, the IRS paperwork you have to file yearly starts with a paragraph stating that they expect it will take 100 hours to fill out properly. You read that right. 100 hours.

Of course you also have to file paperwork for every bank account you have signatory authority on. (So watch out if you get married.)

Capital gains are always taxed, so if you buy and sell a house in the foreign country in which you live, you could be facing a big bill on top of the local taxes.

I don't mind paying taxes, and never have. But I do mind that it takes me several weeks and a very expensive accountant just to file for a country in which I am not currently living. I mind that I am treated like a criminal who is trying to get away with something just because I live in another country. I mind that if I ever wanted to get married to my girlfriend, I'd have to consider whether we could afford bringing her under the rules of the US tax system.
posted by Nothing at 3:43 AM on May 15, 2012 [3 favorites]


And don't forget the penalties. File that paperwork for the foreign corporation late? $That will be 10,000 a month. Make a mistake and forget to include one of your accounts in the paperwork? Penalty is 40% of the value of the account.
posted by Nothing at 3:46 AM on May 15, 2012


It will be interesting to see how many comments this thread racks up before somebody besides me and smackfu actually read the fucking article.

I read the fucking article too, and it still sucks. This MF is 30 years old, makes more money than God, and now is bailing out before everything gets real and he has to pony up serious thanks to the nation who gave him everything he needed to succeed.

FUCK FACEBOOK. I'm done with it. I can live better than this.
posted by Lipstick Thespian at 3:52 AM on May 15, 2012


Nothing: "If you're self employed, forget about it. You have to pay."

Fortunately, no. Though at cursory glance, the IRS paperwork appears to say that, on closer look it says that you have to pay self-employment tax unless the US has a totalization agreement with the country you live in. The Social Security website appears to be down right now, but as I recall, since self-employment tax goes to pay Social Security and Medicare, the US has totalization agreements with most first world countries in which you pay for national healthcare and national pension (like here in Japan), and therefore are exempt from self-employment tax in the US.
posted by Bugbread at 4:15 AM on May 15, 2012


Sorry, I should have noted that the self employment thing mostly bites if you live in a developing country.
posted by Nothing at 4:38 AM on May 15, 2012


Meanwhile, back in America....

Nobody who's that rich has earned it

J.K. Rowling?
posted by IndigoJones at 6:11 AM on May 15, 2012


I'm sorry if this has been answered above, but:

If I'm a US citizen (which I am), and I move to another country to work (let's say to a high-taxation country like Sweden), I would then have to pay Swedish taxes AND US taxes?

So, on an income of USD$100,000 (for example) I'm paying 48.3% in Swedish taxes and 25% in US taxes (not including Social Security etc). Almost 75% of my income is gone. Is that right?

Most Western European countries have a higher cost of living than the US - how can anyone afford to live on that income? Why would anyone move abroad?
posted by desjardins at 8:02 AM on May 15, 2012 [1 favorite]


If I'm a US citizen (which I am), and I move to another country to work (let's say to a high-taxation country like Sweden), I would then have to pay Swedish taxes AND US taxes?

No, as was explained above, you get credited toward your US tax liability for paying taxes in the local country--Sweden in your example. Since your tax burden would probably be higher in Sweden than it would be in the US, you end up with no additional tax burden; if you paid less in taxes than you would have paid in the US, you're on the hook to Uncle Sam for the difference. That's the general idea anyway; at different income levels I'm sure there are more wrinkles.
posted by saulgoodman at 8:17 AM on May 15, 2012 [1 favorite]


US taxes only kick in if they would exceed the income taxes you're paying in your country of residence, and even then you pay the difference, not the full amount of both. the people who run into problems are the ones who move to countries that tax consumption instead of income, because you can't count a VAT or $12/gallon gas against your income tax.
posted by Holy Zarquon's Singing Fish at 8:18 AM on May 15, 2012 [2 favorites]


And, of course, savings/investments are a whole other kettle of fish.
posted by Holy Zarquon's Singing Fish at 8:19 AM on May 15, 2012


Looking back over this thread, it occurs to me it must be nice looking at this situation from such a position of privilege you can view national citizenship as a kind of service one is owed at their convenience, without a trace of irony or self-awareness.
posted by saulgoodman at 8:22 AM on May 15, 2012 [1 favorite]


What do you mean, "a kind of service one is owed at their convenience"? I don't see anyone arguing that, but perhaps it's just that I don't understand what you're trying to say.
posted by Bugbread at 8:35 AM on May 15, 2012


Just imagine if this was, say, Italy, Ghana, China, whatever, making claims and demands on people born there once they immigrated and became citizens of the USA. Send in all of your financial information and file for taxes yearly, or else! Your place of birth demands it, even if you have spent almost your entire life elsewhere as a citizen of another country!

Over 95% of the world does not have to deal with this. What makes the less than 5% remaining so special?
posted by fimbulvetr at 8:47 AM on May 15, 2012 [5 favorites]


Thanks saulgoodman and Holy Zarquon's Singing Fish. Sorry for not reading the whole thread.
posted by desjardins at 8:58 AM on May 15, 2012


fimbulvetr "Over 95% of the world does not have to deal with this. What makes the less than 5% remaining so special?"

Why, because it's America, of course.
posted by Bugbread at 9:02 AM on May 15, 2012


You would not have to pay both Swedish and US income taxes, generally. But it is a whole lot more complicated than the common answer of "you get to deduct all the taxes you pay to Sweden." If you earn less than $90k, and you are in a traditional employment situation, and all your income is from employment, then the simple answer applies. That also assumes you have established a legal residency in Sweden, and have lived there more than a year. If you live there for a partial year, you may have to pay both taxes, and then take a refund from the US after you have lived there for a year.
posted by Nothing at 9:24 AM on May 15, 2012


This doesn't really matter all that much. What matters is that someone wants to go, and is not allowed to get out of the club without surrendering that magical state of grace called citizenship and/or paying for the privilege. I view this as an issue over one of the most basic freedoms humans have, the freedom to move as one sees fit, regardless of how rich or poor one may be.

Forgive me if Im reading this wrong, but while the freedom to move within a country is a fundamental right in most countries, I don't think any legal framework at any point in history ever advocated a freedom to move *across* borders. That is, and always has been, a privilege, granted by class, ethnicity, race, citizenship and other groupings. Heck, that's the point of having a border isn't it, to let in some people and to not let in others.

Or are you arguing for a completely borderless world?
posted by the cydonian at 9:45 AM on May 15, 2012


So the Soviet Union, North Korea, East Germany, etc. were in the right to not allow people to leave?
posted by fimbulvetr at 9:49 AM on May 15, 2012


Just imagine if this was, say, Italy, Ghana, China, whatever, making claims and demands on people born there once they immigrated and became citizens of the USA.

That sounds great, especially for developing countries that might put a relatively high investment into someone only to see them decide to, say, stay in the US as a plastic surgeon instead of going back to their country of origin to be a poorly-paid GP. I think Italy, Ghana, China, and so on are foolish not to have such laws.

I'd certainly agree that it would be great if the US could find simpler but still enforceable ways to say "Show me you're not a rich asshole tax dodger," but my initial guess would be that most of the restrictions and requirements are there because some rich asshole tax dodger abused their absence.
posted by ROU_Xenophobe at 9:51 AM on May 15, 2012 [1 favorite]


Maybe, as a nation built on immigrants, you should really think about the consequences such a world-wide policy would have had on the history of settlement in North America. Yes, people leave crappy places for a better life elsewhere. That is the history of humanity.
posted by fimbulvetr at 9:56 AM on May 15, 2012 [1 favorite]


Steve Jobs was rich, and died of cancer. If I say "cancer sucks", does that sadden you, because I end up identifying with the plight of a billionaire? Should I cheer for cancer instead?

If my eyes could roll any faster they'd be booked for speeding. Let's try and pretend we're not simpletons and can read for context, shall we?

Or, rephrased: As an expat, US income tax law annoys me. I'm supposed to start liking it because some rich guy who I've neither met, seen, nor (before this thread) even heard of doesn't like it?

Not liking billionaires evading taxes != thinking the US tax system is perfect. In fact, you should ask yourself why is it that the tax code has become such a burden on the working classes, complex, difficult to understand and often fundamentally unfair. Might it just be because that suits the interests of those who can easily pay for top notch accountants and legal advice?
posted by MartinWisse at 10:21 AM on May 15, 2012


Maybe, as a nation built on immigrants, you should really think about the consequences such a world-wide policy would have had on the history of settlement in North America. Yes, people leave crappy places for a better life elsewhere. That is the history of humanity.

Um, not to force you down off that soap box, but who in this thread has argued he shouldn't be allowed to renounce his loyalty oath and lose his citizenship in the US? I'm pretty sure all anyone here has done is question his loyalty, his grasp of the reciprocal nature of social ethics, and wish him godspeed on his way out the door. Can you point me to a comment anywhere in this thread suggesting he shouldn't be allowed to renounce his US citizenship? I must have missed that one.
posted by saulgoodman at 10:40 AM on May 15, 2012


No-one has. But if every country in the world, instead of just the USA and Eritrea, had the same demands and requirements on people who have citizenship and no residency it would be a giant mess for ordinary people all over the world who move to new places. These crazy laws hit the ordinary schmuck pretty hard, but as we can see, have next to no effect on gazillionares.
posted by fimbulvetr at 11:21 AM on May 15, 2012 [1 favorite]


Forgive me if Im reading this wrong, but while the freedom to move within a country is a fundamental right in most countries, I don't think any legal framework at any point in history ever advocated a freedom to move *across* borders. That is, and always has been, a privilege, granted by class, ethnicity, race, citizenship and other groupings. Heck, that's the point of having a border isn't it, to let in some people and to not let in others.

Or are you arguing for a completely borderless world?


Yes.
posted by 2N2222 at 1:22 PM on May 15, 2012


Um, not to force you down off that soap box, but who in this thread has argued he shouldn't be allowed to renounce his loyalty oath and lose his citizenship in the US?

The problem here is that US policy needlessly puts Saverin in a position where renouncing his citizenship is a good and sensible thing to do. It's presumably a punitive policy to encourage people to not emigrate as they see fit. But it also stands to punish US economy by discouraging cooperation with people who are in the best position to invest and create wealth.
posted by 2N2222 at 1:27 PM on May 15, 2012 [1 favorite]


It's presumably a punitive policy to encourage people to not emigrate as they see fit.

It obviously isn't; the US doesn't care about emigration, it cares about revenue. The restriction on the borderless society you want is ancillary. (And, in fact, non-existant, because there would not be a borderless world no matter how US tax policy was structured.)
posted by spaltavian at 1:34 PM on May 15, 2012 [1 favorite]


It obviously isn't; the US doesn't care about emigration, it cares about revenue.

The point is that this claim on your earnings discourages you from seeking a legitimate living wherever you see fit.
posted by 2N2222 at 1:41 PM on May 15, 2012


it also stands to punish US economy by discouraging cooperation with people who are in the best position to invest and create wealth.

Where "punish the US economy" means "let the super-wealthy do whatever they please" and "invest and create wealth" means "outsource the labor and capital."
posted by octobersurprise at 1:41 PM on May 15, 2012


Where "punish the US economy" means "let the super-wealthy do whatever they please" and "invest and create wealth" means "outsource the labor and capital to the United States"

FTFY.

US policy makes enemies needlessly. But they're rich assholes, so that's OK, I presume.
posted by 2N2222 at 1:48 PM on May 15, 2012


The point is that this claim on your earnings discourages you from seeking a legitimate living wherever you see fit.

To the extent that the lowest taxes in the developed world are discouraging.
posted by spaltavian at 2:19 PM on May 15, 2012


MartinWisse "Let's try and pretend we're not simpletons and can read for context, shall we?"

I'm trying, but you're vague enough that it's impossible to tell whose opinions are saddening you so.

You say you're sad about people "identifying with the plight of billionaires". I see three groups of people in this thread: 1) Folks who are saying that Saverin shouldn't emigrate, and that he should pay the taxes 2) Folks who are talking about how it sucks that getting rid of US citizenship is so hard, as it is affecting them personally. 3) Folks who are saying that it sucks that the US taxes its citizens abroad, because it's a royal pain in the ass.

I guessed that you were talking about Group 3, and I found that ridiculous. Apparently, my judgment was that of a simpleton, and you were clearly, from context, talking about some other group. But I'm pretty sure if I interpreted you as talking about Group 2, you'd call me a simpleton again. And you agree with Group 1, so it's clearly not them.

So who's left? Which folks in this thread are saddening you so?
posted by Bugbread at 2:38 PM on May 15, 2012


1) Folks who are saying that Saverin shouldn't emigrate, and that he should pay the taxes
posted by Golden Eternity at 2:52 PM on May 15, 2012


delmoi: The problem with this situation is that the guy's wealth was all created by Americans, in America... and not by him at all! He totally lucked into this money. His "involvement" in FB, his only claim on any of the money all happened in the U.S. That's why it seem so sketchy, I think.

I don't think "all" is appropriate there. Facebook is almost 50-50 in USAn vs. foreign users; I see plenty local ads rather than the diet of oversize cars and penis pills that I assume are dangled in front of American audiences like on TV.
posted by LanTao at 3:16 PM on May 15, 2012 [1 favorite]


Isn't this offset by the fact that there are some people who get their educations and develop their businesses and ideas before immigrating to the United States and becoming citizens? If the vast bulk of their work on these ideas is done prior to coming to the US and they reap a huge return on the fruits of their labors after moving to the US, isn't the US getting a tax windfall from all of these people?

Or are we taking the position that huge profits made by people who avail themselves of the US economy at some point are attributable primarily to the awesomeness of the US and its economy, and we therefore should expect to tax them even after they leave?
posted by MoonOrb at 4:20 PM on May 15, 2012


I see plenty local ads rather than the diet of oversize cars and penis pills that I assume are dangled in front of American audiences like on TV.

Wait. What? What TV shows are you watching, and at what time of day or night are you watching them?
posted by The World Famous at 4:26 PM on May 15, 2012


Facebook is getting pretty huge here in Japan, too, taking over ground from Mixi, so while I agree that Facebook got its entire start in America, I'm not so sure that all the guy's current wealth was created by Americans, in America.
posted by Bugbread at 6:31 PM on May 15, 2012


It's no longer surprising but still sadding to me to see so many intelligent, even leftleaning people identify themselves with the plight of an oppressed billionaire or multimillionaire.

Nobody who's that rich has earned it, so it's never unfair when part of their money is taken away to help run the country.
But why are you assuming that the country that helped them is their home country? If they're not living here, then they're not using the infrastructure that supposedly the taxes go to pay for. If someone from Canada comes down to the U.S. and creates a billion dollar startup, here shouldn't their taxes go to the U.S, and not Canada? Well, that's exactly what happens. Or, apparently with most other pairs of countries.

On the other hand, if an American goes to Canada, and starts a company there, they have to pay taxes here and there.

On the other hand, there are obviously benefits to being an American citizen even if you live in another country, that isn't true if you're Uruguayan or Tongolese or Ukrainian, so it does seem fair that we should get a little bit back... It's likely that your US passport allowed you travel there in a way that wouldn't be true if you were from some smaller country.

The problem with Eduardo Saverin, though is that he lucked into all that money here in the U.S. And it was made by people in the US, who were also not him. So it totally does seem like more of a dick move then if had made all that money while living in Singapore.
FUCK FACEBOOK. I'm done with it. I can live better than this.
Yeah, but again - Facebook totally tried to ditch this guy and he sued them and won. Giving him all this money for something he didn't have much to do with isn't something they wanted to do.
Forgive me if Im reading this wrong, but while the freedom to move within a country is a fundamental right in most countries, I don't think any legal framework at any point in history ever advocated a freedom to move *across* borders.
Most countries give you the fundamental right to leave if not the fundamental right to enter
posted by delmoi at 10:35 PM on May 15, 2012


Alternatively, we could stop trying to tax people outside the country with one caveat: if you are a lawful permanent resident or citizen of a country other than the US, and you live outside the US for longer than a certain period, you should automatically lose your US citizenship. If you don't want to pay US taxes, that's fine, but you shouldn't get the benefits of US citizenship without paying for it, with an exception for people who would be left stateless.

Impossible, unless you want to repeal the Fourteenth Amendment.

Quite frankly, the idea that a typical American living outside the country is receiving some sort of huge benefit without paying for it is rather absurd. (Actually, if you count having to pay for an accountant just to ensure compliance with the increasingly byzantine rules that ensnare millions of people who are by no means wealthy, I now get to pay handsomely while getting comparatively little benefit from my U.S. citizenship.)
posted by one more dead town's last parade at 11:18 PM on May 15, 2012


All you need to do to lose your citizenship in the US...is try to fly out of an American airport on a foreign passport.

This is utterly false.

And for the record, I have always traveled on a Canadian passport, including into and out of the US.

You probably shouldn't do this. I've heard stories of people with non-U.S. passports listing their birth country as the U.S. getting guff for entering the country on those passports if they can't prove they've renounced their U.S. citizenship, as U.S. citizens are required to use U.S. passports to enter the country.
posted by one more dead town's last parade at 12:05 AM on May 16, 2012


I'm surprised to hear that the USA claims the right to tax ex-citizens living abroad, because I'm pretty sure those ex-citizens don't have the right to vote. It's weird that this minuscule amount of revenue is worth compromising the whole "no taxation without representation" thing.
posted by Joe in Australia at 12:26 AM on May 16, 2012


The whole "no taxation without representation" is more a slogan than a principle of American government. After all, the District of Columbia and other non-represented territories exist. It's not like expats are unique in not having congressional representation.
posted by The World Famous at 12:30 AM on May 16, 2012


I acknowledge that "no taxation without representation" is largely a slogan, but I'm not sure that you can say that DC is unrepresented. It has a non-voting delegate to Congress and devolved local government. It's an incomparably greater amount of representation than that enjoyed by American colonists in 1766.

In contrast, USAn ex-citizens have absolutely no USAn political rights outside the USA, nor any convenient access to USAn politicians. They don't even have a central body that could represent them. They are probably in a weaker position than the American colonists were!
posted by Joe in Australia at 1:58 AM on May 16, 2012


I'm surprised to hear that the USA claims the right to tax ex-citizens living abroad,

It doesn't; it claims the right to tax citizens living abroad, not ex-citizens. That's the whole point of the story; he's renouncing his citizenship so he won't have to pay taxes. You don't stop being a citizen just because you are living in another country.
posted by spaltavian at 3:58 AM on May 16, 2012


Spaltavian: Actually, they continue to tax ex-citizens for 10 years after they give up citizenship.
posted by Bugbread at 4:26 AM on May 16, 2012


...the Foreign Account Tax Compliance Act, known as Fatca….

What, no-one upcased the last letter in the name yet? FATCAT
posted by wenestvedt at 7:46 AM on May 16, 2012


I hope he gets the clap from a hooker in Singapore. And if that makes me a bad person, well...I was already a bad person.
posted by Kokopuff at 9:19 AM on May 16, 2012


I'm sure the hookers are highly regulated in Singapore.
posted by smackfu at 1:19 PM on May 16, 2012


As much as I'd normally be, grrrr, rich people escaping tax, actually, this case?
No.

The US is institutionally Borderline Personality when it comes to it's citizenships.

It's vicariously malevolent in granting people citizenship, or even a 'not crazy' work permit. Once you are, there's the creepy nationalism, down to requiring children to recite allegiance pledges (I'll always love you!) and then it tries to make sure you will never, ever leave.
Way to have an abusive relationship.

He wasn't born in the US, and regardless, he's allowed to leave.

Other countries are actually ok with dual citizenship, and don't try and make you give up your US citizenship to be a citizen. The US is pretty out there in the level of hounding it makes on people who are citizens, if they live anywhere else.

What exactly was he supposed to do? He doesn't have family connections to the US, so he has no reason to keep US citizenship given the hassles that accompany it.
I think that's the essential problem, the idea that he would be leaving the US just for the tax benefits, because of the default assumption that he, or anyone, would automatically want to live in the US.

I mean, the US is a nice place to visit and all, but I don't want to live there.
And that's ok.
If you read the above statement as an insult (and from experience, I know there will be a proportion of US citizens who will... o_O!), take a moment, and read it again, and imagine saying it about any other country, or even state.
See? It's ok to like other places.

Still, best of luck reforming tax laws etc, the rich in the US get away with daylight robbery, and that is, also, not ok.
posted by Elysum at 4:05 PM on May 16, 2012 [5 favorites]


Elysum: "Other countries are actually ok with dual citizenship, and don't try and make you give up your US citizenship to be a citizen."

So is the US. I think there may be some confusion here.

The thing about "losing your US citizenship if you become a citizen of another country" is this: the US government does not want people to give up their citizenship. They're totally cool with dual citizenship, because it means that while you might be a citizen of another country, you're still a US citizen as well.

Based on accounts I've read from people who've gone through the process, it's kinda hard to give up your US citizenship. It involves not only paperwork, but a kind of reverse job-interview, where you have to convince the staff at the US embassy of just how badly you want to give up your citizenship. Do all the paperwork perfectly but fail to convince the person at the embassy on a gut level, and they can and will turn you down. So people who are confrontational or have fairly forceful personalities don't have much of a problem with it, but less assertive folks find themselves getting turned down.

One approach that people have found is to tell the embassy that you took citizenship in another country in order to give up your US citizenship. So if you become, say, a citizen of Japan, and you tell the US embassy "I just became a naturalized Japanese citizen", they'll just say "That's cool. Enjoy dual citizenship." But if you become a citizen of Japan, and you say to the US embassy, "Look, I just became a Japanese citizen expressly for the purpose of giving up my US citizenship. That's how much I want to give it up.", then the embassy will say, "Ok, I guess you really are serious about giving up US citizenship, so we'll go ahead and release you."
posted by Bugbread at 5:13 PM on May 16, 2012 [1 favorite]


I'm not sure that you can say that DC is unrepresented. It has a non-voting delegate to Congress and devolved local government. It's an incomparably greater amount of representation than that enjoyed by American colonists in 1766.

I disagree. Our delegate has no real power (she was just denied a chance to testify at an abortion bill aimed at DC residents) and Republicans in Congress are constantly pushing their agenda down our throats so that the District is rendered a pawn. As a resident of Washington, I'm not pleased to be doing only marginally better than an 18th century colonist.
posted by exogenous at 5:40 PM on May 16, 2012


I'm with you, exogenous. As a former DC resident myself, I think "I'm not sure that you can say that DC is unrepresented" sounds more than a little like arguing that being prohibited from voting isn't really the same thing as disenfranchisement, because hey, you could convince other people to vote the way you want.
posted by The World Famous at 6:03 PM on May 16, 2012 [1 favorite]


What bothers me the most is, how was I supposed to have any idea of all these new rules? I don't work, so I don't file. Simple as that. This is the first I've heard about all these concerns, and now I find I'm probably going to have some serious hurt.

Just to keep it interesting, my partner is the same gender. Therefore, the IRS can not consider us married. How is that supposed to work, since he earns the money?

Anyone know a good tax lawyer, drop me a memail.
posted by Goofyy at 5:32 AM on May 17, 2012


Whoa--turns out Saverin probably won't be allowed to reenter the US in the future after he renounces his citizenship. Apparently, renouncing one's citizenship to avoid tax liability is grounds to prohibit a person from reentry to the US under current US immigration law. I guess if you're willing to go into exile to save a few million, you might as well. Not a trade I would care to make.
posted by saulgoodman at 6:46 AM on May 17, 2012 [1 favorite]


Somebody should explain that to Chuck Schumer.
Schumer said that he and Sen. Bob Casey (D, Pa.) were introducing legislation that would impose a 30% capital gains tax on future investment gains in the U.S. on wealthy people found to have given up their citizenship in order to avoid taxes. In addition, if the Internal Revenue Service finds that an individual gave up their citizenship in order to escape paying taxes, he or she would be barred from returning to the United States.
posted by twirlip at 1:43 PM on May 17, 2012 [1 favorite]


Well, that will certainly stop people from giving up their citizenship. So.... yay?
posted by smackfu at 2:01 PM on May 17, 2012


Thanks for the correction Bugbread!
Sorry, I confusedly thinking of the Oath of Allegiance:


"“I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen…” from the Oath of Allegiance

The opening lines of the Oath of Allegiance are meant to give the United States exclusive sovereignty over the newly naturalized citizen. In other words, you are a citizen of one and only one country, the United States of America. The idea is that as soon as you take the Oath of Allegiance and become an American, you are giving up your citizenship of your native country.

Naturalized citizens are not legally obligated to give up their citizenship of their native country."
- http://www.newcitizen.us/dual.html

So to be clear, it is NOT a legal requirement, but you still have to say it.
Most other Oaths of Allegiance etc don't actually require you to symbolically renounce all ties to your home nation. Hopefully that doesn't detract from my earlier post too much. Although I guess the point was just, creeepy. And still sounding eerily like an abusive relationship. :P
posted by Elysum at 2:39 PM on May 17, 2012


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