Eduardo Saverin Denies Tax Dodger Charge
Facebook co-founder Eduardo Saverin denies that his motivation for renouncing his US citizenship was tax avoidance.
Facebook co-founder Eduardo Saverin denies that his motivation for renouncing his US citizenship was tax avoidance.
Mashable (“Facebook Co-Founder: No, I Didn’t Leave U.S. to Dodge Taxes“):
Facebook co-founder Eduardo Saverin denied Thursday that he renounced his U.S. citizenship and moved to Singapore to avoid paying capital gains taxes on his approximately $3 billion stake in Facebook.
Saverin said in a statement following a press conference held earlier by two senators who accused him of “tax dodging” that his relocation decision was “based solely on my interest in working and living in Singapore, where I have been since 2009,” according to Reuters.
The move has drawn ire from Senators Chuck Schumer (D-N.Y.) and Bob Casey (D-Penn.), who accuse Saverin of taking advantage of the United State’s relative economic strength and stability, only to leave without contributing his fair share back to the country where he built his fortune.
“Mr. Saverin has decided to ‘defriend’ the United States of America just to avoid paying his taxes,” said Sen. Schumer in a statement. “We aren’t going to let him get away with it so easily.It’s infuriating to see someone sell out the country that welcomed him and kept him safe, educated him and helped him become a billionaire. This is a great American success story gone horribly wrong.”
The senators introduced a bill under which any expatriate with either a net worth of $2 million, or an average income tax liability of at least $148,000, will be automatically presumed to be leaving the country for tax purposes — enabling the IRS to impose a tax on any investment gains that person makes in the future.
Saverin, who was born in Brazil, denied any wrongdoing. He said he owes and is willing to pay “hundreds of millions of dollars in taxes to the United States government.” “I have paid and will continue to pay any taxes due on everything I earned while a U.S. citizen,” he said. “It is unfortunate that my personal choice has led to a public debate, based not on the facts, but entirely on speculation and misinformation.”
Saverin filed to give up his U.S. citizenship in January of 2011, but the news didn’t surface until late last month when the federal government released the information in a routine report.
Saverin’s claim is actually quite plausible. He was born in Brazil to Brazilian parents, who moved him to the United States when he was 11. According to his Wikipedia entry, “By 1993, Saverin’s father had become wealthy, and in 1993 it was discovered that his son Eduardo´s name had been placed on a list of kidnapping victims by gangs specializing in kidnapping for ransom. As a result, the family moved to Miami to find a safer place to live.”
I suppose he owes the United States a little something for that, even if the decision to seek safety here was completely outside his control. Still, he was educated in private schools (Gulliver Preparatory School in Miami and Harvard), had a rather sheltered existence, and quite likely has no natural loyalty to the United States or any other country. And he’s paid and will pay a whole hell of a lot more taxes into the Treasury than most of us.
@James Joyner:
Last year about 0.000005% renounced their US citizenship.
Really not a very popular thing to do.
And for some reason, he’s still a Brazilian citizen.
So, if he did this to become a citizen of Singapore, then he should have renounced his Brazilian citizenship, since citizens of Singapore need to renounce all foreign citizenships.
I’m not buying his argument.
He has just finally understood what the punishment is for renouncing a US citizenship to evade paying taxes.
This would all be avoided if the US would just go to a “income source” system….namely, you pay taxes in the country where you earned the income. Most other countries in the world have that.
@PJ: I don’t doubt that tax policy is part of it. I’m just saying that it’s perfectly plausible to me that a kid born in Brazil to rich Brazilian parents, who came to the US for convenience as an 11-year-old and was largely sheltered in rich boy private schools, has little loyalty to the US and is living in Singapore for legit reasons.
This is a ridiculous statement. He’s paid more and will pay still more than the rest of us because he has a helluva lot more money than the rest of us. After all the millions he has paid/will pay in taxes, he’ll still have a helluva lot more money than the rest of us. I’ll give him and all the other wealthy their props when they pay a comparable tax rate on their millions/billions that I do.
@Nikki:
Most likely Saverin would have gotten a tax lawyer and made sure that he paid as little as he could.
Much like Romney before he got the idea to run for President.
So what? He’s fabulously wealthy, and we’re talking about capital gains here. He’s paying less than you or me, percentage-wise.
As for his blither-blather about being a world citizen or whatever his excuse du jour is, I’ll bet somewhere along the line some lawyer told him that he’d risk never returning to the US if he did this, and he was too smart to listen. Now he’s throwing out post facto rationalizations. What a fool believes.
@James Joyner:
Again. 0.000005%.
There’s a lot of kids born to rich parents elsewhere who became US citizens and then lived the same kind of life as Saverin. A crushing majority of them didn’t end up renounce their citizenships.
But then they didn’t end up with $3 billion either.
Most people tend to value their US citizenship, most likely Saverin believes not having to pay US taxes trumps the rewards of a US citizenship.
The irony is that it’s trivial for someone like him to legally avoid paying taxes on nearly all of his wealth, even without renouncing citizenship. (c.f. Warren Buffet; “Rich Dad, Poor Dad”, Bob Kiyosaki).
Apparently there are two senators moving to have an “Ex-Patriot Act” to punish people who renounce their US citizenship for the purpose of dodging taxes. Just a politician’s reaction to this.
I really think that Saverin is renouncing his citizenship for legitimate reasons. He has not lived in the US in quite some time and spends all his time in Singapore, I believe investing or starting a business, something along those lines.
The real news: why the hell is it taking so long to give up citizenship in the United States? Man, that immigration system needs reform!
Doesn’t he already have to pay a pretty substantial exit tax based on his net worth? If I understand it correctly, anyone renouncing U.S. citizenship has to pay such a tax. The only tax money he seems to be saving would be capital gains tax on any future sale of stock since Singapore doesn’t have a capital gains tax. Unless he’s planning on dumping all of his IPO shares in the near future, it doesn’t seem like he’s saving all that much money in the short run.
Sometimes Chuck Schumer nails it:
Hahahahaha ….
@Eric:
He’s still a Brazilian, not a Singaporean. Not sure in what way being American, but not Brazilian, would be negative if you’re planning to start a business or invest in Singapore.
I’m guessing Brazil doesn’t tax you if you don’t live in Brazil.
@Moderate Mom:
The estate tax and the gift tax has been brought up by tax lawyers as taxes he would want to avoid. (He’s not planning to die yet, but renouncing in September saves him a lot more than waiting until he’s 60.)
And there’s speculation that he doesn’t want to pay taxes to the US while not living there.
He came to the US for the safety that is provided by people paying taxes.
He has made a fortune from the Internet which is/was made possible by people paying taxes.
Now he doesn’t want to pay his bill…even though the US is an extremely low tax nation.
This guy is scum
Good riddance.
And by-the-way…Harvard is a private institution…but it recieves tens of millions in Federal grants and assistance dollars.
Just another case of people not realizing how on-the-dole they really are.
@Eric:
My understanding is that if the AG determines that you absquatchalated to avoid taxes, you can be barred from ever returning to the US. Dunno about any further penalities.
@PJ:
Last time I checked, there were only two countries on the planet that tax its citizens abroad — the US and the Philippines.
“I’m guessing Brazil doesn’t tax you if you don’t live in Brazil.”
Not only that: as all countries in the American Continent, Brazil is jus soli. Born here, you are a citizen.