... a net worth of $2m or an average income tax liability of at least $148,00 over the last five years.
Should that be $148,000?
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 …
Why are the Democrats singling out Eduardo? Last year over 1000 people renounced U.S. citizenship and unlike Eduardo openly ADMITTED it was for tax purposes, 499 in the first quarter of 2011:
Will the Special Ops Tax Collectors (SOTC) go after them, too? Oh, wait, those 1000 people are all Wall Street executives that donate to political campaigns. The Democrats will leave them alone because, uh, well, om, I'm sure there's a good reason...
@BillG - Did you not read the article?
"[Under the proposed new law] any expatriate with either a net worth of $2m or an average income tax liability of at least [$148,000] over the last five years, will be presumed to have renounced their citizenship to get out of paying taxes. [...] the government will tax their future investment gains no matter where they live."
So there you go, not singling out anyone. Mr. Eduardo is just the most visible and recent example (even though he apparently isn't actually trying to skip out on paying income tax.) He's the proverbial final straw.
I understand how this looks. Yes, I read the article. You are correct in what the article SAYS, but if you understand the United States Government you would know what the article MEANS.
A law is always broad but enforcement is selective. Cracking down on people that renounce U.S. citizenship for tax purposes is something that has been TALKED ABOUT in the USA for the past ten years. When Wall Street execs renounce U.S. citizenship for tax reasons and live in the USA as an expatriate, no one in Washington squeals one little bit. But having a highly publicized individual renounce citizenship during a highly publicized IPO during a -*!gasp* - ELECTION YEAR!
Well, the people in Washington have to justify their jobs! Harumph! Harumph! Harumph!
Taxing someone who is not an American citizen as if they were an American citizen is, of course, illegal. It's been tried in different forms - in the mid 1990's, when Chrysler moved their headquarters from a Detroit slum to Auburn Hills because three Chrysler employees were killed in two years on their way to work, Detroit passed a law to force Chrysler to still pay all local Detroit taxes even though they were not in Detroit anymore. It was illegal, of course, and Chrysler refused to pay.
No Taxation Without Representation. I think the Americas fought a war over that one.
But no one doubts that this law is aimed purely at Eduardo. I'm not even sure such a law will pass.
Why would wall street execs expatriate? That means they will no longer be wall street execs. Sure, if they want to retire... but most aren't ready to give up the cash cow just yet.
You may have not read the entire article you linked to:
There is a population of U.S. citizens who live overseas and may never have paid U.S. taxes on their non-U.S. earnings and non-U.S. accounts. Now that the IRS is enforcing the rules, with criminal penalties for scofflaws, the overseas residents would prefer to expatriate rather than pay.
That seems a much more reasonable reason. Thousands of people who are already expats, who have no desire to return to the US, who have all their money overseas, who just don't want the US tax collector sending them bills simply because they still have a US passport in a drawer somewhere.
Eduardo, get real.
All you need to do is donate to the right campaigns and quite honestly it's going to be way less than "hundreds of millions" of US Dollars in taxes, and even way less than the $67M the venerable Senator thinks you owe.
"Lobbyists" in Washington are awaiting your call. It's actually very affordable - a few 100,000 here, another few 100,00 there, and you can basically do whatever you want, they'll write some legislation for you.
BTW I gave up my green card for tax reasons too - I was out of the country for nearly 10 years and still paid my taxes every year, then some dimwit at the IRS decided to audit me. They sent me a letter that I owe $20k in taxes (for me, that's about as much as $2Bn for Mr. Severin). In the end it turned out I didn't owe anything, and in fact they owed me. But the stress, and enormous amount of effort involved getting all this documentation together, talking to a tax attorney et cetera was enough to convince me I have to get out of this crazy system. The IRS is nuts. Simple as that.
Communicating with them was crazy too - it was clear from the get go that they were "coming after me" - no presumption of innocence until proven guilty here! Not even common decency to assume I am "not" a criminal. No. They said right away, I better pay up, or things could get much worse for me. It was like a bad cop scene from a movie. Totally out of control, these people.
I know two other expats - one gave up his green card over a similar incident. The other his citizenship out of fear of the IRS. Both are not big earners - not "rich" by any means. But if you live outside the country, its ludicrous that they believe they have the right to tax you.
"Renouncing citizenship to simply avoid paying your fair share is an insult to middle class Americans and we will not accept it."
Hmmm, I may not be American, but shouldn't this sort of action (if indeed, that was his intention) be insulting to *all* Americans?!
On the other hand, what gives the US government the right to tax people who have specifically renounced US citizenship? They would be taxing foreign nationals at that point, something that most countries consider to be a bit beyond the pale.
They're trying to tax him on income that he hasn't earned yet. If he earns that income after renouncing his citizenship they have no right to tax it, just as he has no right to avail himself of the facilities the US government provides to its citizens. Quid pro quo and all that.
Oh, I agree with you Graham - I wasn't agreeing with the sentiment or the actions, just that some politician deems the action to only be insulting to *one* class of citizen rather than all :)
[Part of me wonders whether they're just miffed that they didn't think of it first :D]
I think there is two reasons for this: One, they need to show they're doing something about the rich - scapegoat! Of course they can't offend their sugar daddies so a rich outsider is perfect.
Two maybe they're hoping to get him in line and get him to "donate" to some super PACs.
Three - there is a growing sentiment in the USA that expats should pay more tax. I can only presume this idea was born over a bottle of Wild Turkey somewhere in middle America. The way to get expats to pay tax is to sow fear and terror with some high profile cases, same reason the IRS goes after celebrities with a vengeance. One or two celebrities behind bars means tens of thousands of scared citizens that pay their dues.
What gives the right?
Well, Pres Obama signed into Law an act that now means that ALL US Laws NOW apply to the whole planet. That gives them the right to go after him everywhere. He'd better not come to the UK as he'll be on a plave to the US before the ink was dry on the entry stamp in his new passport.
If you have ever been a US citizen, or held a green card then you must file a US tax return every year. If you have not earned any income in the US then you may not be liable to pay any tax, but you will pay tax at US rates on any US-earned income which includes capital gains tax. Eduardo Saverin knows this as his reply quite clearly states - what is very sad is that the two US senators who are complaining apparently don't know this.......
The working class who this statement is targeted at don't. They are too busy trying to keep a roof over their heads. Romney paid about 14%, Obama about 17% and I paid 31%. I am just a working class stiff making less than six figures and I don't have any deductions or capital gains or any of the tax breaks wealthier people get.
I don't want the rich to pay 90% taxes. I just want them to pay what I pay.
I have a meeting with the I.R.S. in an hour so this will be AC.
When you say "pay what you pay", do you mean $30,000 p.a., which should cover their "share" of education, policing etc., or do you mean 31% ($310,000 p.a. for someone on a million a year)? $170,000 in taxes is not "less" than what you paid, though it's a lower percentage of a millionaires "hard earned" income.
i.e. Do you want to live in a capitalist or communist regime?
Secondary question: If the media report the % rather than total tax paid: Are they communist sympathisers?
The risk with satire is that is sometimes can be too subtle. The views apparently expressed in your original posting are most definitely alive and kicking in certain circles in the States. I should also perhaps mention that I have on several occasions asked/begged El Reg for a "Satire alert" icon!
As above, Romney's paying something over 40% on his income, dividends are taxed twice, first as company income, second as dividends in the hands of shareholder. More civilized nations impute dividends, that is you can deduct from your own taxes the tax already paid on the dividend.
For what ever reason the US insists on fully taxing company profits and offering a reduced rate on dividend payouts.
Try living outside Australia (I assume you are from there, as I) and getting a credit for the imputation. NFW, the local tax bodies ADD the imputation credit to your dividends and charge local taxes on the lot at their local whopping rate (50+% here). This is double taxation and they know it, they just specualte that I won't fight, and if I don't pay they can confiscate my wealth directly from my bank account administratively without so much as a "by your leave" (fact).
My tax bill (backdated 5 years) is going to be 6 figures, and force my departure, immediately. From a high income high tax-paying resident, to a zero tax paying resident. I was willing to pay my local share, I am not willing to double up on what I already paid in Oz! I suspect the IRS would pull the same number - they are rabid dogs too.
FUCK THEM ALL, socialists and IRS rabid dogs the lot.
Time to find a new country, Burma is starting to look promising.
Yeah, they're some of the more ignorant of the toilet bowl of ignoramusi we collectively refer to as "Our elected representatives".
Never mind the facts, they rule through sound bites and BS. The only people dumber than them are the ones that vote for them. Either party is guilty of this. They all disgust me.
[putting my teeth back in]
What are you talking about? Of course governments tax foreign nationals. I have paid taxes on investment in other countries to those governments, The US has a right to tax any money earned in the US. Of course they have no right to tax foreign income of non-citizens who do not live in the US.
Dodging taxes is only insulting to middle class Americans, as those are the only ones paying them. Poor don't earn so they don't pay. The rich dodge their taxes using other methods.
See: "Mitt Romney Tax Returns Released: Paid Just 13.9% Rate In 2010, Had Swiss Bank Account"
Justwondering how you can tax someone who isn't either a citizen or resident, and what the punishment for ignoring the demands for payment from a government unconnected to you would be? I mean, Americans think their law applies globally, but this is a bit ridiculous. Can the UK government tax Bill Gates then?
There is no question about the US' right to tax him according to their laws while he was a US citizen - regardless of where his butt is (onshore or offshore). The issue is the US seems to want to continue taxing this guy after he is a Singapore citizen living in Singapore... which I think should be considered fucked up under any circumstances.
That said... judging from the comments, apparently nothing gets people riled up more than their sense of entitlement to other peoples' money/property. Eat the rich, amiite?
While this may be SOP in Yank media culture, it shouldn't be. Poor devil has just found out that in the Court of the US Press, you're always guilty until the checks clear for the advertising space and public interest drops off.
Retractions are always buried in a basement in a locked filing cabinet, next to a sign saying "beware of leopard".
While I don't disagree that Apple, MS, Google et al should pony up proper taxes and not avoid them... This is clearly a personal decision of someone who effectively runs a US company moving himself to a locale where he doesn't have to pay tax on an extremely large amount of money. He is not a multinational company who could at least argue that they have operations in the countries they pay very little tax in.
Having said that, if he really wants to show that it's just a co-incidence that he moved out of the US, right before a whopping tax bill, he could just pay the tax. I just don't think that's going to happen, somehow.
Actually, this has never been in question (whether he will pay capital gains tax), as his press release pointedly makes clear. The question is, having paid a squillion in tax, renounced citizenship and upped sticks ... does he have future tax liabilities to the US.
The answer is no, unless this funny law comes into effect, and I have no idea what bizarre consequences it will have.
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