7 ms·

It's not a matter of spite--it's the fact that Eduardo's primary claim to life and wealth is due to America: coming to America saved Eduardo's life as a youth a

by rprasad 14y ago

It's not a matter of spite--it's the fact that Eduardo's primary claim to life and wealth is due to America: coming to America saved Eduardo's life as a youth after he became the target of Brazilian kidnappers, getting an American education led to the opportunity to be Facebook's angel investor, and the American justice system is the sole reason that Eduardo has any claim to Facebook stock today. Note: I am not opining in this comment whether Eduardo should be taxed more than he already has been or already will be, I am merely stating the prevailing justification expressed for why people think he's a freeloader.

pan69 14y ago
So, you're saying; Saverin owes us. Is that correct?
- rprasad 14y ago
  I'm saying he owed us in both the legal and moral sense. I do not know whether (or if so, when) Eduardo has paid taxes on his Facebook shares, so I cannot opine on whether he still owes us under the laws currently in effect. Morally...I think he's a freeloading bastard, and I look forward to the day he goes to jail in Singapore for violating one of their numerous and extremely punitive criminal laws. But I do not think he has a moral obligation to pay additional taxes if he has satisfied his legal obligations.
  - pan69 14y ago
    As far as I understand the stories, under the current law he's legally in the clear. Morally, the United States is full of free loading bastards who know every single loophole in the tax laws. Why single out this one guy? Because it's much easier to focus on a single individual and crucify him? He's hasn't done anything different then what other "free loading bastards" have been doing for years. This is guy is not a born US citizen in the first place and he's been living in Singapore since 2009.
  - joelrunyon 14y ago
    Why are you so intent on something bad happening to him? In the large scale of things - he got screwed when it came to Facebook. Sure you might not like the guy, but when you're hoping bad things happen to him just because he's about to make a lot of money makes it look like you're awfully jealous of the guy.
  - urbanjunkie 14y ago
    Why would he be going to prison in Singapore? Is he known for breaking laws? It's also amusing that you denigrate Singapore for their "numerous and extremely punitive criminal laws" when the incarceration rate in Singapore is roughly a third of that in the US.
mentat 14y ago
I'm not sure that it follows that the point of the US is to extract taxes indefinitely from those who benefit from a well constructed country. If the structure of the country becomes hostile to a person, they should be able to vote with their feet. It is substantially easier for the rich to do this, but the solution is to make it easier for everyone, both coming and going. Responsiveness should be the goal on every level, local, state, federal.
- joelrunyon 14y ago
  Exactly, if you're not free to leave of your own choosing - a country begins to sound a lot more like jail.
- rprasad 14y ago
  I agree, but the key problem is that the U.S. tax system is structured to collect taxes after the period to which they relate. This is done to minimize the compliance burden on taxpayers and to minimize the IRS' burden in ensuring compliance. The alternative is to collect all taxes as they accrue (like sales taxes are now), which would significantly increase compliance costs for taxpayers and the IRS's workload. The primary argument is that Eduardo owes these taxes because the underlying income was earned while he was an American citizen/resident. It's not a matter of what he is doing right now--it's a matter of what he was doing back then.
  - beagle3 14y ago
    > The primary argument is that Eduardo owes these taxes because the underlying income was earned while he was an American citizen/resident. It's not a matter of what he is doing right now--it's a matter of what he was doing back then. Assuming technical compliance with the law, this argument is moot. The law requires payment of capital gains based on fair market value at the day of renouncing citizenship.
  - joelrunyon 14y ago
    It sounds like what you really want to do is change the tax law.
beagle3 14y ago
It is exactly a matter of spite. tl;dr: he is playing by the rules. people are spiteful because they think he is abusing a loophole in those rules (I disagree). Saverin played by the rules: he legally became a US citizen. He got the related perks (access to education, quality of life, ...) and the related liabilities (The US tax code is onerous, and while it IS competitive with e.g. Europe on a percentage basis, you get much, much less for your taxes). He is still playing by the rules: he is invoking the "I quit" card. Note that contrary to the media hype right now, he is making a bet: if Facebook loses value between his de-citizenship and the time he can sell (possibly 6 months after IPO, depending on how his stock was allocated and how the IPO is structured), he is going to LOSE money by denouncing his citizenship. If he is not planning to live in the US, that's perfectly understandable - read about FBAR and FATCA. the tl;dr of those is: you have ridiculously onerous reporting requirements, FOREVER, with penalty 50% of your holding, PER YEAR (that is, if you're decided to be willingly noncompliant for two years, you have to pay your liquid worth; if you are for 4 years -- well, you owe twice as much; and by default you are assumed willingly noncompliant). Now, whether or not his decision to move out of the US was driven by the US tax code or not, is (or at least, in my opinion, should be) immaterial. Furthermore, since he wants to live in Singapore, he is required to give up his US citizenship to receive a Singapore one. I find support to this being a matter of spite, is that all proponents of this law that I have heard talk about punishing him and his ilk (in slightly different words). Ted Arison and Michael Dingman did this in the early '90s and avoided billions in taxes (The wikipedia article claims Arison did pay taxes[citation needed], but I remember the headlines at the time said he didn't, and http://www.nytimes.com/1995/04/12/us/some-of-rich-find-a-passport-lost-is-a-fortune-gained.html?pagewanted=all&src=pm http://www.nytimes.com/1995/04/12/us/some-of-rich-find-a-pas... indicates that he probably didn't). Saverin is actually taking a financial risk here, playing by the rules that were enacted, which are not letting him out easily. It is exactly a matter of spite. edit: minor rewording one minute after writing.
- rprasad 14y ago
  People disagree on whether he is/was playing by the rules, and this is the very heart of the debate. It's not an issue of objective technical compliance, since he has objectively complied with the rules. However, like all anti-abuse provisions of the tax code, there is a subjective element: Did Eduardo renounce his citizenship to avoid paying U.S. federal income taxes on the sale of his Facebook stock? If the answer is yes, there is a good probability that the IRS will pursue him for taxes arising from the IPO. (Note: in most situations, the primary intent must be to avoid taxes, but in some situations, any intent to avoid taxes is enough.) Furthermore, he could be barred from this country ("excludable") under U.S. immigration laws. The Senator has indicated that he believes the answer is yes. It's not a matter of spite; it's a mater of timing. Eduardo has been eligible for Singaporean citizenship for some time now, yet it was only when the Facebook IPO became likely (last fall) that he actually took steps to renounce his U.S. citizenship. (If you read other news sources, you will see the Senator refer to the timing issue.) In the end, the only people who know what Eduardo's subjective purpose was in renouncing his citizenship are Eduardo and the advisors he consulted with in reaching this decision.
joelrunyon 14y ago
He became a citizen and he got the benefits of being a US citizen. Now he's choosing to become a citizen of another country and forfeiting those US citizenship benefits. Just because you're a citizen, doesn't mean that country owns you – you still can choose to move, leave if you want to. Saying he's a freeloader discounts basically everything Eduardo has done. I would say the net gain of Eduardo being in the US for the time he was, is significantly bigger than the net loss we'll feel from him leaving – making him the exact opposite of a freeloader.

by rprasad 14y ago

pan69 14y ago

So, you're saying; Saverin owes us. Is that correct?

rprasad 14y ago
I'm saying he owed us in both the legal and moral sense. I do not know whether (or if so, when) Eduardo has paid taxes on his Facebook shares, so I cannot opine on whether he still owes us under the laws currently in effect. Morally...I think he's a freeloading bastard, and I look forward to the day he goes to jail in Singapore for violating one of their numerous and extremely punitive criminal laws. But I do not think he has a moral obligation to pay additional taxes if he has satisfied his legal obligations.
- pan69 14y ago
  As far as I understand the stories, under the current law he's legally in the clear. Morally, the United States is full of free loading bastards who know every single loophole in the tax laws. Why single out this one guy? Because it's much easier to focus on a single individual and crucify him? He's hasn't done anything different then what other "free loading bastards" have been doing for years. This is guy is not a born US citizen in the first place and he's been living in Singapore since 2009.
- joelrunyon 14y ago
  Why are you so intent on something bad happening to him? In the large scale of things - he got screwed when it came to Facebook. Sure you might not like the guy, but when you're hoping bad things happen to him just because he's about to make a lot of money makes it look like you're awfully jealous of the guy.
- urbanjunkie 14y ago
  Why would he be going to prison in Singapore? Is he known for breaking laws? It's also amusing that you denigrate Singapore for their "numerous and extremely punitive criminal laws" when the incarceration rate in Singapore is roughly a third of that in the US.

mentat 14y ago

I'm not sure that it follows that the point of the US is to extract taxes indefinitely from those who benefit from a well constructed country. If the structure of the country becomes hostile to a person, they should be able to vote with their feet. It is substantially easier for the rich to do this, but the solution is to make it easier for everyone, both coming and going. Responsiveness should be the goal on every level, local, state, federal.

joelrunyon 14y ago
Exactly, if you're not free to leave of your own choosing - a country begins to sound a lot more like jail.
rprasad 14y ago
I agree, but the key problem is that the U.S. tax system is structured to collect taxes after the period to which they relate. This is done to minimize the compliance burden on taxpayers and to minimize the IRS' burden in ensuring compliance. The alternative is to collect all taxes as they accrue (like sales taxes are now), which would significantly increase compliance costs for taxpayers and the IRS's workload. The primary argument is that Eduardo owes these taxes because the underlying income was earned while he was an American citizen/resident. It's not a matter of what he is doing right now--it's a matter of what he was doing back then.
- beagle3 14y ago
  > The primary argument is that Eduardo owes these taxes because the underlying income was earned while he was an American citizen/resident. It's not a matter of what he is doing right now--it's a matter of what he was doing back then. Assuming technical compliance with the law, this argument is moot. The law requires payment of capital gains based on fair market value at the day of renouncing citizenship.
- joelrunyon 14y ago
  It sounds like what you really want to do is change the tax law.

beagle3 14y ago

It is exactly a matter of spite. tl;dr: he is playing by the rules. people are spiteful because they think he is abusing a loophole in those rules (I disagree). Saverin played by the rules: he legally became a US citizen. He got the related perks (access to education, quality of life, ...) and the related liabilities (The US tax code is onerous, and while it IS competitive with e.g. Europe on a percentage basis, you get much, much less for your taxes). He is still playing by the rules: he is invoking the "I quit" card. Note that contrary to the media hype right now, he is making a bet: if Facebook loses value between his de-citizenship and the time he can sell (possibly 6 months after IPO, depending on how his stock was allocated and how the IPO is structured), he is going to LOSE money by denouncing his citizenship. If he is not planning to live in the US, that's perfectly understandable - read about FBAR and FATCA. the tl;dr of those is: you have ridiculously onerous reporting requirements, FOREVER, with penalty 50% of your holding, PER YEAR (that is, if you're decided to be willingly noncompliant for two years, you have to pay your liquid worth; if you are for 4 years -- well, you owe twice as much; and by default you are assumed willingly noncompliant). Now, whether or not his decision to move out of the US was driven by the US tax code or not, is (or at least, in my opinion, should be) immaterial. Furthermore, since he wants to live in Singapore, he is required to give up his US citizenship to receive a Singapore one. I find support to this being a matter of spite, is that all proponents of this law that I have heard talk about punishing him and his ilk (in slightly different words). Ted Arison and Michael Dingman did this in the early '90s and avoided billions in taxes (The wikipedia article claims Arison did pay taxes[citation needed], but I remember the headlines at the time said he didn't, and http://www.nytimes.com/1995/04/12/us/some-of-rich-find-a-passport-lost-is-a-fortune-gained.html?pagewanted=all&src=pm http://www.nytimes.com/1995/04/12/us/some-of-rich-find-a-pas... indicates that he probably didn't). Saverin is actually taking a financial risk here, playing by the rules that were enacted, which are not letting him out easily. It is exactly a matter of spite. edit: minor rewording one minute after writing.

rprasad 14y ago
People disagree on whether he is/was playing by the rules, and this is the very heart of the debate. It's not an issue of objective technical compliance, since he has objectively complied with the rules. However, like all anti-abuse provisions of the tax code, there is a subjective element: Did Eduardo renounce his citizenship to avoid paying U.S. federal income taxes on the sale of his Facebook stock? If the answer is yes, there is a good probability that the IRS will pursue him for taxes arising from the IPO. (Note: in most situations, the primary intent must be to avoid taxes, but in some situations, any intent to avoid taxes is enough.) Furthermore, he could be barred from this country ("excludable") under U.S. immigration laws. The Senator has indicated that he believes the answer is yes. It's not a matter of spite; it's a mater of timing. Eduardo has been eligible for Singaporean citizenship for some time now, yet it was only when the Facebook IPO became likely (last fall) that he actually took steps to renounce his U.S. citizenship. (If you read other news sources, you will see the Senator refer to the timing issue.) In the end, the only people who know what Eduardo's subjective purpose was in renouncing his citizenship are Eduardo and the advisors he consulted with in reaching this decision.

joelrunyon 14y ago

He became a citizen and he got the benefits of being a US citizen. Now he's choosing to become a citizen of another country and forfeiting those US citizenship benefits. Just because you're a citizen, doesn't mean that country owns you – you still can choose to move, leave if you want to. Saying he's a freeloader discounts basically everything Eduardo has done. I would say the net gain of Eduardo being in the US for the time he was, is significantly bigger than the net loss we'll feel from him leaving – making him the exact opposite of a freeloader.