General Question

ETpro's avatar

Facebook Founder renounces US citizenship to duck taxes. Is it time to renounce Facebook citizenship?

Asked by ETpro (34247 points ) May 11th, 2012

Facebook founder Eduardo Saverin has decided to renounce his US citizenship in advance of his anticipated multibillion dollar capital gains windfall from Facebook’s upcoming IPO. Saverin moved to the US in 1992, got his education here, and became a citizen in 1998. He has massively profited from the educational, entrepreneurial, business, social, and networking infrastructure this nation gave him, but he can’t spare even 15% of his windfall to give back to the country that made him rich?

Coming on the heels of the FTC Investigation just launched into Facebook; this is not going to help the IPO. I am going to kill my Facebook account. There’s Myspace, Twitter, Linkedin, Google Groups, and Bing is developing a Social presence as well that will likely help Microsoft’s search platform win some of Google’s popularity.

I know that some will cheer Severing [oops, Saverin] for his move, and warn that all millionaires and billionaires will leave the US unless we offer them a free ride payed for only by us peons who make them so rich. I say good riddance to anyone so selfish, greedy and unpatriotic that they will turn their back on this great nation the moment it hands them what they want. What say you? Is it time to renounce Facebook Citizenship?

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35 Answers

Charles's avatar

“so selfish, greedy and unpatriotic that they will turn their back on this great nation the moment it hands them what they want.”

He is free to do what he wants. It’s perfectly legal. He didn’t make the rules. You (as an American voter) made the rules. He’s just playing by your rules.

Wouldn’t you do the same thing?

And by the way, I renounced my Facebook, the cesspool of narcissism, citizenship long ago.

Jaxk's avatar

I think we should boycott everything. No matter what you buy somewhere up the chain there is someone rich profiting from it. Let’s all show them who is boss and drive them out of business. Once all business and industry collapses we’ll have won. That’ll show them who’s boss.,

Aethelflaed's avatar

Saverin isn’t in control of Facebook anymore. Me deleting my Facebook has no impact on Saverin whatsoever.

bolwerk's avatar

Why care? It’s one person, and it happens. No matter what rules you make, some people will exploit them for personal gain. He is following the rules, like it or not. He’s allowed to renounce his citizenship.

Also, I’ll point out that you don’t need to make very much money to get screwed by the U.S. government when you live overseas as an American citizen. If I moved to Europe, I would probably renounce my U.S. citizenship too. Citizen or not, I think people shouldn’t have to pay taxes in a country they don’t even live in.

Jeruba's avatar

Point of information: if you once renounce your U.S. citizenship, is it necessarily permanent, or could you ever get it back? I’m wondering if it’s possible for people to come and go as citizens when it suits their advantage (and hoping it isn’t).

Nullo's avatar

@Jeruba Doesn’t sound like the sort of thing that the immigration people would be terribly keen on, does it?

lillycoyote's avatar

@Jeruba I imagine he would have a tough time getting an new application for naturalization approved.

Also, here is a section from the Wikipedia entry on U.S. nationality law regarding statutes and policies in cases where is is believed someone has renounced their citizenship in order to avoid taxes

It’s possible he could be barred from reentering the US; it’s not something that’s ever been enforced and the entry seems to imply that perhaps the modifications to the statutes might make them unenforceable. It was unclear to me and I haven’t looked into it further.

lillycoyote's avatar

This whole thing makes me kind of miss the Gilded Age “Robber Barons.” The Carnegies, Morgans, Vanderbuilts, Rockefellers, etc. They amassed their wealth making and building things the country and it’s people needed and left a legacy of libraries, universities, museums, foundations, contributions to science, etc. We are still enjoying the legacy of the Gilded Age guys. They didn’t make their money selling advertising and private information about people. The created built railroads and created entire industries like Ford and Eastman. And every time I visit Longwood Gardens, I thank goodness for rich people :-). The government couldn’t have created a place as beautiful as Longwood, not as beautiful as the place Pierre du Pont created.

At least the “robber barons” and people like the du Ponts didn’t take the money and run.

ragingloli's avatar

This could easily be prevented by making a law that states that the state can seize all your assets, except for a fixed amount so you have a buffer in your new country, if you renounce your citizenship.

ragingloli's avatar

@lillycoyote
And private entities could never have gotten us into space.

Jaxk's avatar

Neither would Obama

lillycoyote's avatar

@lillycoyote I agree completely. I am neither opposed to government nor opposed to rich people. The comment on Longwood was in no way at all intended as some kind manifesto about government vs. the private sector. It was really just about Longwood.

ragingloli's avatar

And there is always the Ch√Ęteau des Versailles, built by the French kings Louis XIII and Louis XIV.

lillycoyote's avatar

@ragingloli Yes, another fine example of what government can do. :-)

GladysMensch's avatar

I might. I’m sick of Facebook’s constant crap anyhow. I’ve boycotted many companies because of their business practices or political interests. I believe that boycotting a company is a great thing to do. Profits are what truly matters to companies and corporations. My boycott affects their bottom line. If enough people boycott, then the boycotted will hopefully lose enough money to change their policies. Does my individual boycott make a difference? No. Am I hurting America by my boycott? No, because I just take my business to a competing company. Do I feel better knowing that I’m no longer supporting a group that has no interest in me or my country? Yes.

wundayatta's avatar

Yes, indeed it is. I’ve renounced. Haven’t logged in in months.

Have you?

ETpro's avatar

@Charles Yes, it’s a free country. Mr Saverin is free to leave. I am equally free to leave Facebook, as are millions of other Americans.

If I were in Saverin’s shoes, wouldn’t I do the same? NO! I grew up watching the Greatest Generation. They tirelessly sacrificed to keep this nation safe. The wealthy paid top tax rates as high as 94%. Those with little income and with handicaps that prevented them fighting in WWII collected scrap metal for the war effort. We all did what we could to stop the Nazis and Axis powers; and to push back the North Koreans and Chinese when they invaded our ally, South Korea. As young as I was, I tended a victory garden so we could ship off vital supplies to the front lines. No, I would not put my own selfish interest above that of a country that has given me so much.

rooeytoo's avatar

@ETpro – Beautiful words and so true.

(but I hate to give up my FB, how am I going to keep up with everyone???)

cazzie's avatar

Just because you fill out some paper in a country doesn’t make you a patriot. He is moving to Singapore, but he was born Brazillian, so he has no ‘patriotism’ at all it seems. He was a foreigner in 1992 and ten years later, off he goes again.

I still consider myself more of a Kiwi than an American or a Norwegian. If I had a several billion dollar pay out coming, I would NOT stay in Norway, but I don’t think I would move to the US, either. Perhaps this guy feels the same way? But then again, moving away to avoid tax and moving away because you suddenly can are two different things. But it is possible to think that he just doesn’t like living in the States. I didn’t. I think it does really suck that he is doing the whole, ‘tax avoidance’ thing. It looks rather sick on that level. Perhaps he thinks he can do better things with the money than the US government or he feels he owes America nothing for his success. I hope we get to see an interview of him over this.

Notice he is not moving back to his country of origin, either. I know a little bit about doing business in Brazil and they do not make things easy. He would have a hell of a time there if he wanted anyone who wasn’t born in Brazil as an employee or contractor. They are the worst when it comes to work visa paperwork.

I am more likely to quit facebook because of the timeline format, though. And because I started my own blog, which is less personal in content, but much more satisfying. I would keep my account to keep track of other people, but I wouldn’t post or link there at all, except maybe to my blog.

The only thing I can suggest is that anyone who feels they need revenge on the guy, to watch him closely to see what he invests in and then choose to piss all over those projects and products, what ever they may be in the future.

cazzie's avatar

Oh, just thinking about it, if I suddenly had a windfall of money, living here in Norway, and tried to structure it so I wouldn’t have to pay tax on it, I think the Norwegian government wouldn’t let that happen. I am not a citizen here. I can not vote in their national elections, but you can bet they will not let one kroner go when it comes to tax.

gorillapaws's avatar

I like the idea of permanently banning his re-entry into the US. I think this is a reasonable policy regarding anyone in a similar position.

Jaxk's avatar

This is an interesting study in how we react to someone that did a good thing. This guy invested and helped start a company that will go public in $75—$90 billion range. One of the biggest in our history. They employ about 1500 people and are responsible for the rise in social networking. All good innovative stuff. But a few years ago Saverin decided to move to Singapore. Now he has rejected his US citizenship in an apparent attempt to lower his tax burden. It would seem we would want to find a way to retain and encourage people like this to stay in the US. But instead we are looking for ways to punish him. These are the creative and innovative people we want in the US. Why would we punish someone that has done all this good stuff and send a message to others that if you have new and innovative ideas, don’t come here start them elsewhere lest we punish you for all your hard work.

Facebook will generate billions in tax revenue with or without Saverin. Facebook will continue to employ thousands with or without Saverin. What the hell are we so upset about? We should be trying to understand why he left and looking for ways to reverse that. Make the US competitive for these entrepreneurs instead of hostile and vitriolic..

gorillapaws's avatar

@Jaxk banning his re-entry to the US would do exactly that; it would force him to think hard on the decision to abandon his citizenship.

Jaxk's avatar

@gorillapaws

I suspect he’s not planning to come back. Seems like an empty threat to me.

gorillapaws's avatar

@Jaxk I think a lifelong ban to the US isn’t that empty. Never being able to take your kids to Disneyland, visit your Alma Mater, visit friends here, or do business in the US is a pretty costly stone to carry around your neck. The differences in taxes may seem pretty cheap when you can’t ever come back to the US.

Jaxk's avatar

@gorillapaws

You’ve always got Disneyland in Paris.

cazzie's avatar

Wait, @gorillapaws let me weight that up…. 15% of 10’s of billions of dollars or…. visiting Disneyland…... hmmmm. you kidding me?

Honestly… I spent the first 19 years of my life there and now both my parents are dead. I can happily spend the rest of my life never setting foot on US soil again, especially of I suddenly became a billionaire. I would just fly the members of my family I like to come see me and ignore the rest.

Setting up business in the US with a shelf company out of the Kamen Islands would in no way penalise him from running a business in the US. The US corporate trading and tax structure allows this. He will, no doubt, partner and invest, still, in the US, so he can do his honey bader act all he wants about paying tax to the US. He doesn’t have to and he does’t care.

gorillapaws's avatar

@cazzie He’s still going to pay some tax in Singapore (I’m not sure what the true difference is, but it’s 20% on personal income), so it’s the difference between what he pays in the US vs. what he’ll pay elsewhere. When you’re a billionaire, a few hundred million really isn’t that much money when it means you can never come to the US again. I can assure you that there is a very real cost to a lifelong ban in the US. What if one of his friend dies, and he can’t attend the funeral, or the hassle of having to fly every potential US business associate or friend to visit him, is just a pain in the ass.

nikipedia's avatar

It’s a dick move but I’m not sure we should punish the guy.

I can’t get in the head of a billionaire who is upset about paying taxes. Makes no sense to me.

bolwerk's avatar

The proper response to problems like this is to make a saner U.S. tax structure that is harder and/or futile to evade. There is no reason to go around banning people, particularly when he’s basically following rules elected officials made (rules that obviously carry some consequences, IYBW). The people you should be pissed off at are the Congresscretins who create tax codes riddled with rules that make moving jobs and capital to authoritarian third world countries more favorable than leaving them in the USA.

lillycoyote's avatar

@ETpro I agree with @rooeytoo those are beautiful words and I agree with you there. I also agree that people have the right to do business or not do business with anyone they choose. There are companies I don’t do business with because I don’t like their polices or believe they not good corporate citizens but a mass boycott of Facebook would be a form of “collective punishment” for the act of one person, Saverin. It is not an issue of Facebook corporate policy. Zuckerberg’s not going anywhere as far as I know, he didn’t make this choice for Saverin and neither did any of the employees of Facebook or any of it’s users. Any attempt to “punish” Facebook as an entity for the acts of one person seems unjustified. But whether or not to use Facebook because of this is a personal decision.

ETpro's avatar

@Jaxk You don’t really think that at all, and I can’t imagine you think that is what I was suggesting. Always it is changing the subject and generalizing or citing some irrelevant fact to derail any discussion of fixing what;‘s dragging America down.

@Aethelflaed It;s true that Saverin is out at Facebook, He owns someehere between 4 and 5% of the company. The industry scuttlebutt is that Mark Zuckerberg used lots of people to get the business rolling, and screwed them all. Any sudden loss of users will hurt Saverin and Zuckerberg. Seems a fain two-fer to me.

@bolwerk There is something to be said for paying taxes where you make money.

@Nullo & @Jeruba It sure wouldn’t seem fair to come back every now and then, make a killing, then split again before time to pay taxes on the windfall.

@lillycoyote Good point. The Robber Barons actually cared a great deal about the USA and built businesses that made things. All too often, today’s Gordon Gecko lot are trading derivatives and hedging and are totally unwilling to do what traditional banks did to boost our economy.

@ragingloli I totally agree our own stupid laws are as much the problem as this one selfish entrepreneur.

SachinKarpe7's avatar

Its a completely a personal call, and moreover he is not breaking the law, and if there was any law that could force him to do so then it would have being done long back.

ETpro's avatar

@SachinKarpe7 We’ve already been over that here. He’s free to do what he plans, and anyone offended by it is free to do what they feel is right regarding supporting Facebook. I know that hurts Zuckerberg more than Saverin, but given the way Zuckerberg screwed over Saverin, a pox on both their houses.

cazzie's avatar

@ETpro eeek. We know THAT story didn’t end well.

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