Saving Saverin
I strongly suspect future American historians will point to the Eduardo Saverin brouhaha as another milestone on the road leading from "America: a free country, more or less" to "America: bit of a totalitarian hellhole, eh?"
Saverin is one of Facebook's co-founders: born in Brazil, acquired US citizenship in the late 1990s, now living in Singapore. He recently renounced his US citizenship in order to save tens of millions of dollars in US income taxes after the Facebook IPO. This offended congressman Chuck Schumer so much, he proposed punitive new legislation that would not only impose super-high exit-tax bills on rich expats like Saverin, but ban them from ever setting foot in the USA again.
The idea that anyone who gives up US citizenship should never, ever be allowed back in the country, even as a tourist, sounds ominous in more ways than one. Do we really want to make it impossible for super-rich expats to spend any of their money here again? More importantly, do we really want to be the sort of country to lash out at anyone who dares leave the Motherland or Fatherland or Homeland or whatever the hell other Creepyland we seem determined to emulate? Are we so insecure that we must punish anyone who feels anything short of unconditional nationalistic love?
Don't mistake this as an apologia for the superrich; I believe the US tax code should be reformed so that certain mega-wealthy people who actually live here shell out far more tax money than they currently do. But the United States is the only country in the world to insist that all of its citizens owe annual tribute whether they live here or not. Every other nation on Earth collects income tax only from people actually living and earning income there; only Uncle Sam is rapacious enough to demand tax revenue from its citizens even when they're on the opposite side of the planet.
A friend of mine who supports Schumer's anti-Saverin crusade asked: "Would you give up your citizenship for 1.5% of your net worth, especially when that also means that you can never set foot back in the US?" But I countered that a more relevant question would be: "If I'm a dual citizen and my primary residence is in another country, is it worth keeping my US citizenship when doing so requires me to pay extremely high taxes and adhere to near-punitive bank regulations which no other country in the world imposes on its citizens?"
Other anti-Saverin arguments I've heard sound eerily similar to old East German Communist propaganda speeches justifying the Berlin Wall to its residents:
Lousy ingrates, getting college degrees here in the people's glorious socialist republic and then having the gall to want to live somewhere else. How dare they not work to enrich their government! How dare Saverin not pour money into US coffers for the rest of his life!
Of course, by that logic, how dare I not send money to the commonwealth of Virginia every year? I've lived in Connecticut since the late 20th century but, during my childhood, Virginia spent money to educate me (more or less) in public schools from grades 2 through 12, then spent more money subsidizing my four-year bachelor's degree at a state university ... and the ink barely dried on that degree before I packed bag and baggage and got the hell out of state, and Virginia's seen nary a dime out of my pocket since.
Still, if a Virginia tax official tried presenting me with a bill today, I'd invite him to attempt biologically impossible acts involving the insertion of his elbows into his own nether regions: just because I lived there then doesn't mean I owe them now. Similarly, a US citizen and Facebook stockholder living full-time in Singapore shouldn't owe any more US taxes than would a Singaporean citizen and Facebook stockholder under the same circumstances.
Our being the only nation on Earth to impose tax in such situations is behind most of the recent upsurge in US citizenship renunciations. It's not people leaving the country in a huff; it's people who already live elsewhere, and would probably like to keep their US citizenship if that didn't entail such onerous tax and regulatory burdens -- for example, many foreign banks won't even accept accounts from US citizens because the US government paperwork requirements are too outrageous.
America could get away with that back in the 1950s or 60s when, if you wanted a stable, peaceful and rich country to invest your fortune, the US was not merely the best game in town, but pretty much the only one. But times have changed. Nowadays, it appears, US citizenship is no longer so uniquely valuable that multi-billionaires happily enjoying citizenship in other countries will pay handsomely and jump through complex annual hoops for the dual privilege of a US passport, too.
Granted, from a US budgetary perspective it really stinks that Saverin will no longer help pay for the drone wars and the drug wars, the TSA cancer machines and the secret CIA torture prisons, and all the other wonderful free-country things our government values enough to go into debt for them. Still, lashing out at Saverin and others like him won't solve the problem. Why don't we fix whatever makes US citizenship less desirable than it was, rather than lash out at those who no longer desire it?
Saverin is one of Facebook's co-founders: born in Brazil, acquired US citizenship in the late 1990s, now living in Singapore. He recently renounced his US citizenship in order to save tens of millions of dollars in US income taxes after the Facebook IPO. This offended congressman Chuck Schumer so much, he proposed punitive new legislation that would not only impose super-high exit-tax bills on rich expats like Saverin, but ban them from ever setting foot in the USA again.
The idea that anyone who gives up US citizenship should never, ever be allowed back in the country, even as a tourist, sounds ominous in more ways than one. Do we really want to make it impossible for super-rich expats to spend any of their money here again? More importantly, do we really want to be the sort of country to lash out at anyone who dares leave the Motherland or Fatherland or Homeland or whatever the hell other Creepyland we seem determined to emulate? Are we so insecure that we must punish anyone who feels anything short of unconditional nationalistic love?
Don't mistake this as an apologia for the superrich; I believe the US tax code should be reformed so that certain mega-wealthy people who actually live here shell out far more tax money than they currently do. But the United States is the only country in the world to insist that all of its citizens owe annual tribute whether they live here or not. Every other nation on Earth collects income tax only from people actually living and earning income there; only Uncle Sam is rapacious enough to demand tax revenue from its citizens even when they're on the opposite side of the planet.
A friend of mine who supports Schumer's anti-Saverin crusade asked: "Would you give up your citizenship for 1.5% of your net worth, especially when that also means that you can never set foot back in the US?" But I countered that a more relevant question would be: "If I'm a dual citizen and my primary residence is in another country, is it worth keeping my US citizenship when doing so requires me to pay extremely high taxes and adhere to near-punitive bank regulations which no other country in the world imposes on its citizens?"
Other anti-Saverin arguments I've heard sound eerily similar to old East German Communist propaganda speeches justifying the Berlin Wall to its residents:
We no longer wanted to stand by passively and see how doctors, engineers, and skilled workers were induced by refined methods unworthy of the dignity of man to give up their secure existence in the GDR and work in West Germany or West Berlin. These and other manipulations cost the GDR annual losses amounting to 3.5 thousand million marks.
Lousy ingrates, getting college degrees here in the people's glorious socialist republic and then having the gall to want to live somewhere else. How dare they not work to enrich their government! How dare Saverin not pour money into US coffers for the rest of his life!
Of course, by that logic, how dare I not send money to the commonwealth of Virginia every year? I've lived in Connecticut since the late 20th century but, during my childhood, Virginia spent money to educate me (more or less) in public schools from grades 2 through 12, then spent more money subsidizing my four-year bachelor's degree at a state university ... and the ink barely dried on that degree before I packed bag and baggage and got the hell out of state, and Virginia's seen nary a dime out of my pocket since.
Still, if a Virginia tax official tried presenting me with a bill today, I'd invite him to attempt biologically impossible acts involving the insertion of his elbows into his own nether regions: just because I lived there then doesn't mean I owe them now. Similarly, a US citizen and Facebook stockholder living full-time in Singapore shouldn't owe any more US taxes than would a Singaporean citizen and Facebook stockholder under the same circumstances.
Our being the only nation on Earth to impose tax in such situations is behind most of the recent upsurge in US citizenship renunciations. It's not people leaving the country in a huff; it's people who already live elsewhere, and would probably like to keep their US citizenship if that didn't entail such onerous tax and regulatory burdens -- for example, many foreign banks won't even accept accounts from US citizens because the US government paperwork requirements are too outrageous.
America could get away with that back in the 1950s or 60s when, if you wanted a stable, peaceful and rich country to invest your fortune, the US was not merely the best game in town, but pretty much the only one. But times have changed. Nowadays, it appears, US citizenship is no longer so uniquely valuable that multi-billionaires happily enjoying citizenship in other countries will pay handsomely and jump through complex annual hoops for the dual privilege of a US passport, too.
Granted, from a US budgetary perspective it really stinks that Saverin will no longer help pay for the drone wars and the drug wars, the TSA cancer machines and the secret CIA torture prisons, and all the other wonderful free-country things our government values enough to go into debt for them. Still, lashing out at Saverin and others like him won't solve the problem. Why don't we fix whatever makes US citizenship less desirable than it was, rather than lash out at those who no longer desire it?
posted by Jennifer Abel at 10:24 AM
2 Comments:
Schumer is a day late and a dollar short with his venom towards Saverin. Corporate "persons" both conduct business in the U.S. as well as protect their bottom line from taxes AND receive millions in refunds to boot. Where is the bill to prevent the corporatocracy from both profiteering from American dough and stopping them not paying their fair share of taxes? When that happens, then Schumer can have his 15 minutes of populist fame.
Of course, by that logic, how dare I not send money to the commonwealth of Virginia every year?
Hmm. You might think such an idea to be preposterous, but several years ago the State of California was attempting to tax retirement pensions of those who had moved out of state. Because the pensions had been earned while working and residing there, the State's contention was that it was somehow entitled to collect an income tax on them. Never underestimate the greediness of government for more tax receipts.
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