Originally Posted by USC Cheats
Eduardo Saverin, aka the good guy in the Facebook movie, is renouncing his citizenship in order to avoid paying taxes on his IPO fortune.
Chuck Shumer and Bob Casey are not pleased.
Despite leaning libertarian and thinking that the U.S. tax treatment of foreign residents is absurd, I don't think this should be allowed. The fortune was made in America and the company benefits greatly from the U.S. regulatory system. The IPO is happening in U.S. capital markets for a reason. Basically when you make all the money in America I don't think you should be able to evade taxes by renouncing.
This is crazy. Assuming Saverin is subject to the expatriation tax, he will pay taxes on all of his assets as if he sold them for FMV. So he only "evades" taxes on income that arises in the future. And Facebook still pays taxes at the corporate level obviously. And the US will still tax dividends paid to Saverin. Also, as you're probably aware, the US is one of the only countries in the world that taxes nonresident citizens on their worldwide income in the first place.
Are you really saying that once you're a US citizen, all income you earn, ever, even if you leave the country and give up the benefits of citizenship, should be taxable by the US?
The WSJ article says Schumer and Casey are going to unveil some plan to tax expats, which will almost certainly be in flagrant violation of dozens of treaties. Should be good for a laugh.
At a news conference this morning, Sens. Schumer and Bob Casey, D-Pa., will unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act