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back to article Facebook's Eduardo Saverin: I'm not a tax-dodger

Facebook co-founder Eduardo Saverin has insisted that he will pay taxes in the US and his decision to change his citizenship to Singapore had nothing to do with the country's more hospitable tax environment. "I am obligated to and will pay hundreds of millions of dollars in taxes to the United States government," he said, in a …

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Gold badge

Wouldn't it be nice..

.. if Casey and Schumer would focus on all those companies that keep their money abroad instead?

That'll teach Saverin to sponsor these guys' campaign BEFORE he makes such announcement. After all, that's what most companies do...

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Stop criticizing the guy

He did was the US financial system allowed. Instead of senators bitching about people using loopholes like this, they should be legislating the loopholes out of the existence.

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FAIL

Re: Stop criticizing the guy

How is a citizen of a foreign country not paying tax in the US a loophole?

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Re: Stop criticizing the guy

The loophole is for a guy holding citizenship to renounce it and more or less carry on as normal but with many more millions of dollars in his pocket. The loophole could be closed by requiring former US nationals to continue to pay US taxes if they hold a US work permit or reside within its borders for X number of days over the next 5 years.

Basically make it so if they want they money they can get the hell out of the US and not come back any time soon.

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Anonymous Coward

Re: Stop criticizing the guy

How positively juvenile

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Boffin

Re: Stop criticizing the guy

This is not a 'loophole'. It is "capital flight" -- which scares the bejeebers out of the people doing the oppressing. Why won't he stay here and be oppressed?

Income earned in the US is taxable in the US, and he can't just move to escape that -- that's not the issue, and never really was, grandstanding aside. What is the issue is that if you push the investor class out thanks to moronic policies, you lose the investments that create jobs. Eventually, the public cottons on, and the politicians lose theirs (rightly so, as the architects of our misery). Schmucky Schumer et al want him to stay and eat the shit sandwich they've prepared for him.

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Thumb Down

Grow a pair.

It's obvious the move IS a tax dodge, so why try and wasel your way out of it? It isn't like anyone worth (or about to be worth) in excess of a billion dollars has anything to worry about. I'd do the same thing, but would be open and honest about it, and certainly wouldn't lose any sleep over soon-to-be-ex senators of mine bitching about it.

And by the way America, you are NOT the world.

Friday rant over. Roll on beer o'clock.

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Anonymous Coward

Re: Grow a pair.

The thing is, that this is tax due on earnings, and someone renouncing their citizenship just before those earnings are paid, in order to not have to pay that tax. I'd say it's shitty behavior, the money was earned in the US and should be taxed there, it's just that he moved away and the money earned in the US is being paid elsewhere.

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Silver badge

Re: Grow a pair.

It is shitty behaviour but I'm also sure that virtually everyone in the same situation would be as quick to do as he did. There was a loophole that let him save a lot of money and he took it.

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WTF?

Re: Grow a pair.

Surely any capital gains made on the IPO of a US company is automatically deemed to be US capital gains, and therefore taxable in the US irrespective of the nationality or country of residence of the person making the capital gains??

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Coffee/keyboard

Re: Grow a pair.

Just a reminder...Capital Gains are only realized when stock is actually sold. If this guy NEVER sells his stock...then there are zero realized dollars to charge a Capital Gains tax.

Steve Jobs took $1.00 a year salary so HE could qualify for the lowest Capital Gains tax rate...and Apple paid for Jobs planes and probably most of his bills. I don't hear anyone bitching and complaining about Jobs...He LL. Some probably want him granted saint hood. What a Joke.

It's not whats right or wrong in this nation...its who are you and does the general public want to worship you or persecute you. Today...more and more...American rules with a mob mentality.

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Anonymous Coward

Re: Grow a pair.

Strange expression that: "worth a billion dollars". If a billion dollars is worth a billion dollars and he HAS a billion dollars, shouldn't he be worth MORE than a billion dollars? It seems to imply that he is actually completely worthless.

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Joke

I don't hear anyone bitching and complaining about Jobs

you must be new here :-)

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Joke

Are the honourable members of the senate just jealous?

Being rich guys who cannot renounce citizenship without losing their jobs.

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Facepalm

Re: Are the honourable members of the senate just jealous?

I don't think that would slow them down for even a second. After all, you can be a Senator from Indiana for years without actually deigning to live there. They'd just exempt themselves from the law like they do with any other US law they find inconvenient under the pretense that they're serving the public, and it'd be all just OK.

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Anonymous Coward

Re: Are the honourable members of the senate just jealous?

To be fair, no one should have to live in Indiana

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Trollface

Re: Are the honourable members of the senate just jealous?

You made my day.

%$##-ing hoosiers.

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Nice to see a crackdown on the rich.

It's all Ed's fault of course. If he had hired a sufficient number of lobbyists and made enough brib....campaign contributions, this wouldn't have happened.

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It doesn't work like that.

I noticed that you had missed a point last time. It's implicit in this article, but most comments here haven't seen it.

You cannot evade US tax by changing citizenship for the purpose of evading tax.

It is regarded as a wholy artificial tax-evasion scheme.

However, as with any tax prosecution, the tax department has to prove on the balance of probability that the purpose of changing citizenship was tax evasion.

The new proposal is that there be an automatic assumption of guilt, modifying the onus of proof.

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FAIL

Hah, the only reason they're pissy is because their version of tax dodging is nowhere near as affective.

More than likely what happened with the guy (since he's lived in singapore for the past several years) is his accountant said "hey when this thing comes in, you'd be saving a load of cash if you changed citizenship*

"Lol okay"

And that's how it went.

But seriously, I can't stand it when government officials piss and moan about this kind of thing when a good portion of them are doing the same themselves just with different methods. Also sucks balls how the world police are handling everything now, I mean by their wacky laws, i could set up a website in the UK following all the UK laws, but if it infringes on an american law I'd be extradited for trial etc. Ungh, hate legal people.

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Facepalm

Just another example of the NOT SO FREE nations child like attitude.

I've lived in the US most of my life....and many Americans tend to be a "Do as I say...not as I do" nation. The increasing levels of government restriction is getting to the point that I am thinking of leaving as well. The government is moving towards forced charity to support the growing lazy and inept population. Instead of telling the inept to make an effort to become self-sufficient and self-reliant. America is a bad parent who avoids addressing the REAL problems and chooses to get others to care for the lazy and inept. America is Passing the buck and avoids the reality of its society's failings.

This is NOT the greatest nation in the world anymore. The continued lowering of general social expectations...and lack of personal self-responsibly is a constant disappointment. Instead of trying to grab for other peoples money....the government needs to get on track and boost the economy, address illegals. No country is perfect, but America is NOT facing the reality of its demise

I expect to see more Americans leaving as this society continues it's downward spiral. The government is trying to get the wealthy to support those who make zero effort to be self-reliant/self-sufficient. People need to grow up and take care of themselves. It's NOT my responsibility to support others, while they sit on their A$$ and make zero effort to contribute towards supporting themselves. Excuses flow in abundance from those who choose to play and not work hard for their future..

Job avoidance is what these congressmen are REALLY working on.

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Anonymous Coward

Re: Just another example of the NOT SO FREE nations child like attitude.

Let's hope you never get made redundant, or have an accident and become disabled, or require medical treatment your insurance won't cover because of some tiny clause in the t&c because then you will be up against the people just like yourself who think that just because someone needs some help at sometime they are lazy and don't want to work and why should they pay to help you out?

Selfish prick

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Anonymous Coward

Hang in there!

Please, stay in the USA...

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Pint

Re: Just another example of the NOT SO FREE nations child like attitude.

Welcome to socialism - rewarding failure and punishing success. And you want to know why Europe is F****d?

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Anonymous Coward

Re: Just another example of the NOT SO FREE nations child like attitude.

Arrogant C**t

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Anonymous Coward

@Philip

Yeah, cos America is doing great financially isn't it.

Remind us again who's major banks etc began the sub-prime mortgage catastrophe and subsequently the whole chain of events from there. America's capitalism what a great system. Cause untold misery for millions just so a handful of people at the top can have a great life and where lying, cheating and stealing to get to the top are seen as positive qualities.

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Silver badge

Re: Just another example of the NOT SO FREE nations child like attitude.

Yes because Europe has such terrible things like Bismark & Beveridge universal healthcare systems that deliver better quality care at between half and one third the cost. They have education free at the point of use.

Nasty socialist ideas that turn out to be better and cheaper. Before you spout out some rubbish about how America's system is better, go check out the annual cost of healthcare vs life expectancy & quality of care. Despite costing twice as much per person & not offering universal coverage the USA's system is ranked 37th in the world.

Having experienced quite a few countries around the world, including the USA and several European countries, America would be smart to look at what other countries are doing and learn from them. America has so much potential, it's sad to see it wasted.

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Black Helicopters

Re: @Philip

Banks did not "do" the sub-prime catastrophe. Before the feds got involved in mortgage lending, the only way you could get a mortgage was with 20% down, and there was NO SUCH THING as a sub-prime mortgage.* That's *why* the sub-prime market is improperly regulated -- it is a relatively new market created by legislative fiat that the imbeciles in DC were unable to anticipate (or worse -- I suspect they used the inevitable creation of this market as a way to funnel cash to themselves/their cronies). It sucked if you didn't have the 20% saved up, but defaults were few and far between. After all, the whole purpose of a substantial down payment was to make sure you had enough skin in the game that you wouldn't overextend yourself.

Capitalism by itself works. Capitalism with trolls working the system to amass power to themselves does not work -- as it isn't capitalism. Crony capitalism isn't a form of capitalism at all. Don't get me wrong as to political leanings here -- we have had a lot of crony capitalists on both sides of the aisle in the US -- Lincoln, for example, was a master at it, and I am no fan of the Jeffrey Immelt-style of cronies -- but they are just a conduit for cash created by the government's oppressive legislation -- put them in jail, and the politicians will find other conduits. Just look up the largely unreported NOAA slush fund scam for a textbook example of "oppress someone, offer relief if you pay someone off, profit" scheme that rewards huge businesses and punishes smaller ones that don't understand that in DC, you have to pay to play.

Like any legislation that creates more problems far worse than the original, the politicians are at the place where they blame someone else for the problems they created. Next will be proposed legislation to "punish" the scapegoats, creating more problems that they can run for election on, and collect "donations" in order to give businesses a pass on enforcement a la China. Lather, rinse, repeat. In one paragraph, you repeated the main two lies used to pass the blame on and obfuscate the true source of the problem.

I'd call politicians parasites that afflict the people they purport to serve, but that's insulting to parasites anywhere. Ticks are mere pikers in comparison -- they just suck your blood until you die. These creeps suck your blood, blame you for the poor quality of blood due to your anaemia, bill you, your estate, and your descendants for the cost of their sucking their blood, any medical treatment, and burial expenses, and use your medical condition to justify latching on to any other source of blood handy.

My advice to you, young padawan, is to not give so much credence to people that say they are trying to "help" or "inform" you. Then you won't be "controlled".

* -- in fact, there is no such government interference in business real estate loans, which is why you do not hear of a sub-prime business real estate sub-prime market -- even though you can make the argument that since 90%+ of business startups fail, there should be a lot more sub-prime business real estate mortgages. If your business wants a mortgage, they still have to put 20% down or pass fairly stringent financial tests that would not be politically palatable in the heavily demogogued "buy a house for 0% down-no income or assets needed to apply" home mortgage market.

There never will be such legislation, as businesses are the scapegoats here, and nobody in politics loves businesses -- they only want their cash -- and creating oppression in order to create a highly profitable (to them) moral hazard is the way that Washington DC does business these days.

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FAIL

Re: Just another example of the NOT SO FREE nations child like attitude.

So why does the USA, the promoter of capitalism, owe 14 trillion dollars? Surely the richest country in the world should actually *be* the richest. FAIL x 10^12

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Anonymous Coward

Re: Just another example of the NOT SO FREE nations child like attitude.

Mr Thumbs - what about you 'making an effort' not to be an asshole?

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Re: Just another example of the NOT SO FREE nations child like attitude.

Please don't come to the UK, for your own safety. You'll likely stroke out when told you'll have to pay National Insurance.

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Re: Just another example of the NOT SO FREE nations child like attitude.

The downvotes have started, I guess my fellow merkins are waking up lol.

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Anonymous Coward

Re: @Perlcat

You keep telling yourself that, maybe one day it will be true. Oh, no it won't as it's complete rubbish

Capitalism in America only encourages greed and reckless behaviour. The government may have relaxed the rules regarding mortgages but they didn't make the banks go reckless with their lending. They could quite easily have said no we won't lend to you but greed drove them on. They knew what they were doing, knew the house of cards would collapse and still kept doing it all in the name of making a few extra dollars and stuff the consequences. It was like a massive game of pass the parcel as they sold the debts around each other and the game was to not be left holding them when it all went titsup.

The constant demand for profit growth makes businesses reckless. It has to as constant growth forever is impossible. When your market is saturated the only way to go is down but bosses have to show they are performing so they start to cut corners, reduce the workforce, outsource as much as possible even when that is a bad idea so the standard of goods drops, there are fewer workers so not as much money is put back into the economy, can't spend if you haven't got it so profits drop and the cycle starts again, lay off workers rinse and repeat. Even if a business performs consistently that isn't enough for the stock market so they reduce the price of the shares as they demand growth every single year.

A much more sensible system would want businesses to be sustainable and reward it. If you made $1m profit last year, and the year before that and are on target to do the same again that shows the business is doing well, but not in the eyes of the stockmarket as the people running the business are legally obligated to produce growth even if that isn't possible and get punished on the share price if they don't. Surely it makes more sense to have a sustainable business making about the same profit every year for 50 years rather than constant growth for 10 followed by a massive crash as the demand is no longer there. If the business can grow then great but the current system is based on the false presumption that can carry on forever.

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Anonymous Coward

Re: @Philip

Perlcat do you know how silly you sound? The government put in place those laws that stopped the banks getting silly and when they relaxed them everything went bad and yet at the same time you say that if the goverment had kept its nose out and didn't interfere then it wouldn't have happened. Relaxing the regulations is the government having less to do with business and according to you thats a good thing. The banks then abused their new freedom but then you think it's the governments fault for not being strict enough. What do you want? Regulation or no regulation? You seem to be contradicting yourself.

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Paris Hilton

Re: @Philip

Banks can be relied upon, in all cases, to act in their own best interests and the interests of the "Capital" which they represent. This is the priciple purpose for the existence of banks. They are not charitable institutions, and they are peopled by individuals, rightly or wrongly, for whom social conscience is a cool name for a band.

I do not understand why people are so constantly surprised at these facts.

It seems every meltdown in the history of finance has been preceded by a round of deregulation..

I can commend this tome to those with the intellect and interest to plough threw it.

http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691142165

Try it, you may learn something.

Paris: For no apparent reason

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@perlcat Re: @Philip

True about the feds mandating loans for the poor, but that would limit the banks over-exposure to $10K on a $50K house. Multiplied by 160 million houses (worst case, from US Census data), that's just $1.6 trillion the US would have to cover, equivalent to 3% of the _entire_ US housing "value" of $48tn (160m x $300K, the average price)

According to Ben Bernanke, ( http://www.forbes.com/sites/steveschaefer/2011/12/06/bernanke-there-was-no-secret-bank-bailout-and-it-was-only-1-5-trillion/ ) bailout loans peaked at $1.5tn, though the banks allegedly needed between 7 and 24 tn - due to their irresponsible leveraging they had to sell assets at fire-sale prices. Though SOMEONE had the cash to buy the assets - actually, my self-invested pension did quite nicely out of buying depressed bank shares.

And British banks were under no compulsion to buy toxic US assets or over-leverage loans to Brits

So I'd blame the US feds 5% and the banks 95%.

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Re: AC Re: @Philip - govt regulation

Yep, and the standard defence from British banks was "The government didn't stop us from doing something stupid, so it's the governments fault". Not "the government _made_ us do something we regarded as stupid"!

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Anonymous Coward

Re: AC @Philip - govt regulation

You mean if a *lack* of regulation means that competitive pressures 'force' banks to be stupid, that rather disproves the 'magic markets' theory offered to us by perlcat and others? I'd have to agree.

Apparently giving the banks what they wanted was an act of "government oppression" which makes them merely the "scapegoats" for their own subsequent freely chosen actions in pursuit of profit.

Lending money *actually* secured on property over the period of the loan, to people who can mostly afford to make the payments is solid, unglamorous business. Building Societies managed it for over a century without much difficulty.

On the other hand, making loans which never could be repaid only makes sense if there is a bigger fool to sell them on to

Perhaps "government oppression" forced the ratings agencies to be corrupt and/or incompetent enough to rate products based on such junk as triple-A?

Seeing the mental contortions practised by some people to convince themselves that 'black is white' and 'white is green' gives one a hint of what it was like to be a dissident in the Soviet Union!

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Re: @Philip

>>Banks did not "do" the sub-prime catastrophe. Before the feds got involved in mortgage

Here in AUS, we had already made both mistakes: Deregulation, and Low-start-loans. Fortunately, we had the deregulation at a different time, not at the same time as the Low-start-loans.

So the shoddy salesmen only sold normal expensive mortages and financial products, and the low-start-loans were only sold by governments and banks.

But the USA had both examples to look to. The immediate effect of banking sector deregulation, with the failure of banks. And the poor people stuck in low-start loans, in the expectation that they would benefit from a rising economy and rising housing prices. And then did both at once.

You remember what Bismark said? Only a fool learns from his own mistakes.

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WTF?

Time machine?

"He quotes a 1996 amendment to the Immigration and Nationality Act that renders inadmissible any former citizen who is determined by the Secretary of Homeland Security to have ditched their citizenship for tax purposes."

How could a 1996 amendment give powers to Homeland Security when the Dept of Homeland Security wasn't created until 2002?

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Black Helicopters

Re: Time machine?

Its the legislative magic of incompetently written, incomprehensibly written, thousand-page laws. Politicians, ever the masters of being on BOTH sides of any issue, have crafted laws that are simultaneously *for* and *against* things, and as such, can get reinterpreted any way they want. It's the same principle involved in both the famous quote: "Even the Devil can quote scripture for his own purposes", and the syntactical cleverness where you place certain words in a paragraph to hide the rickroll.

Well-written laws are short and easy to read, understand, discuss, and vote for/against on the merits. Modern bullshit laws weigh in at forty pounds, and nobody, and I mean NOBODY reads them. They can't. Not even possible. I'd call it incompetence, but I think that's a plausible deniability fig leaf covering far more malicious intent.

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Bronze badge

Re: Time machine?

>>How could a 1996 amendment give powers to Homeland Security when the Dept of >>Homeland Security wasn't created until 2002?

Powers were transfered to the DHS from the instrumentalities that it subsumed.

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Go

Not a tax dodger?

Then pay up you pathetic little weasel.

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Bronze badge
FAIL

Re: Not a tax dodger?

As was in the article, and the one before, he will be paying.

And as has been referenced in many comments, he will have to continue filing taxes.

Other argument:

The man has not lived in-country for years, and does not plan to return. So, why should he pay taxes towards utilities and services he does not/cannot use. He should change his citizenship to pay taxes where he lives, thus supporting the services (roads, police, etc.) that he does use.

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Thumb Down

Re: Not a tax dodger?

I'll take a stab at this. The subjective pain of paying a given amount of tax varies highly depending on what the government does with it and what your fellow citizens are also paying.

I've paid taxes in France and in Canada. In one case, you have a government that hasn't managed to balance a budget in 30 yrs, a huge public sector payroll and a pension system that a first semester actuarial student would tell you will collapse in a few decades. Along with a population that believes that the government $ can fix anything.

In the other you have a country which radically reduced its spending in the mid 90s when it became clear it wasn't sustainable. Lots of pain but people generally take pride on running a balanced budget (the last few years have been an exception). When I pay taxes, I know that government spending is highly scrutinized.

Both France and Canada used my tax money to deliver on matters that I care about: public education and health. Both countries' general citizenry agree to pay fairly high taxes and don't pretend that only "the rich" should pay taxes.

The US on the other hand manages to run a huge deficit, deliver laughably overpriced healthcare in a highly unequal manner and is acknowledged to have an under-performing public education system. In a country where the median income is about 65K$, Pres. Obama "bravely" supports upping the taxes for those making >250K$ while Republicans state that no one should pay more taxes. So, I am basically hearing that someone making >90K$ cannot possibly give up any moneys to balance the budget. Only the very rich should pay, everyone assumes, but everyone will consume services and claim they are hard up. I find that obscene, even though I also find CEO level pay obscene. A Republican senator, the party of small government, sponsors a 250M$ bridge to nowhere in Alaska and almost gets away with it. US military spending outstrips what, the next 20 countries in the globe put together? The Senate and House dicker endlessly about BS without fixing the budget. Even while voters can't be bothered to pay taxes they are almost unique in the world in claiming taxes from their expats.

I don't know if Saverin is trying to dodge taxes or not. But were I in his shoes, I would feel little inclination to pouring money into such a dysfunctional system. I would pay what I owed and leave asap. Give me the impression that my money is being used wisely, including to help people less well off than me, and I will pay taxes without complaining much.

The law is the law, you say? Yes, but people can vote with their feet. Saverin is doing so.

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WTF?

what goes around comes around

People have long come to the US from higher tax regions (i.e., Canada, Nordic countries) to pay lower taxes on their earnings. I think huffing and puffing about somebody leaving the US for the same reasons is a bit naff.

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Re: what goes around comes around

Do they? When you factor in healthcare (24kusd a year, an average of 500 usd per month per person), education (35k usd a year in our household) etc to make it like for like I pay more tax in the USA than in Europe by far, even including the additional vat and fuel duty in Europe.

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Happy

Re: what goes around comes around

haha seriously a downvote, for what? Muppet!

For those from my former european home, the tax situation over here varies a bit but basically you pay your federal income tax, medicare tax, social security tax and state income tax (some states don't charge a state tax on income, they just use a sales tax, some use both), then you or your employer (or both of you) pay for your health care, if you are lucky, then you pay property tax to the local thieves guild. Then you often pay a sales tax to the state (here I pay about 8.5% state income tax and 4.2% sales tax). There is fuel duty (state and federal which amounts to approx 16-17% here I think).

Then if you want your kid to be able to read and think (and not just downvote) you pay approx 15-17k a year basic school fees, then another 1-3k in ancillary school junk (registration, uniforms etc), then another 10k per kid in required donations to the school and about 20-30 days a year servitude to the school.

I may be going back to school next year, the bill will be approx 60k per year.

The land of the free, my feckin arse it is. I will fight for this country, I will respect the laws, I will pay my taxes honestly but I will not sit back and pretend all is awesome.

For the merkins, at least in the UK, you pay income tax (similar structure to the US, allowances etc) and national insurance to the guberment. Then you pay property tax to the local thieves guild (who then use it to break paving slabs to their relatives can trip over them and sue for whats left of your taxes). You pay a sales tax of between 12 and 20% depending on where in Europe you are, I think the UK is 20% right now. Fuel has a pretty hefty duty on it, then sales tax on top of that.

Education \ Health etc isn't totally free (often there are loans for higher education and copays for medical treatment, although most countries work off one of two systems that use economies of scale and centralised control of costs), but everyone pays all the time based on their ability to pay. Better or worse? In some areas it seems to be more efficient to do it the European way, although the USA has got some things very right (the WIC programme springs to mind.).

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Pint

Your one of us, or one of them.

If the USA allowed dual citizenship, like a lot of other countries, then perhaps this sort of circumstance wouldn't come about. Having to renounce either your current citizenship to become a citizen of the USA or to renounce your USA citizenship to become a citizen of another country seems odd and rather restrictive. We don't know why Eduardo wanted to become a citizen of Singapore, but perhaps if he were allowed to keep his USA citizenship he would have.

Must be beer time...

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Anonymous Coward

Re: Your one of us, or one of them.

The USA does have dual citizenship.

U.S. Senator Michele Bachman also has Swiss citizenship.

http://www.politico.com/news/stories/0512/76142.html

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