Facebook Founder Goes Galt

May 18, 2012 By 33 Comments

Eduardo Saverin came to the United States as a boy because his name had been on a list of potential targets by kidnappers in his native Brazil. The ransom that he evaded paying to lawbreakers in Brazil has been demanded by lawmakers in America. Saverin and his money have again evaded capture. The tech billionaire and his billions are safe in Singapore.

Eduardo Saverin, a co-founder of Facebook, has renounced his U.S. citizenship in anticipation of the company’s initial public offering today. Media savvy Senator Chuck Schumer, in anticipation of that same initial public offering, has introduced a bill, along with Pennsylvania Senator Bob Casey, to tax people who renounce their citizenship to escape taxes. The bill seeks to financially punish expatriates, impose a 30 percent capital gains levy upon them, and ban them from reentering the country.

When Uncle Sam can’t play Big Brother he throws a Little Brother brat-fit. What does it say about a politician who supports rewarding with citizenship immigrants who enter the country illegally but seeks to ban one of America’s most productive immigrants from ever stepping foot in the United States for the crime of legally leaving? Hell hath no fury like a tax man scorned.

Eduardo Saverin and Chuck Schumer share an alma mater but little else. Harvard graduate Saverin has never worked in government. Harvard graduate Schumer has never worked outside government. Saverin speaks entrepreneur. Schumer speaks politician. Their words can’t help but get lost in translation.

“I’m not a tax expert,” Saverin said in Wednesday’s New York Times. “We complied with all the known laws. There was an exit tax.” For the New York senator, the exit tax wasn’t taxing enough. “This is a great American success story gone horribly wrong,” Schumer told reporters Thursday. “This tax-avoidance scheme is outrageous. Eduardo Saverin wants to ‘defriend’ the United States of America just to avoid taxes. We aren’t going to let him get away with it.” The legislation’s gimmicky name—the Ex-PATRIOT Act, which stands for Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy—employs the last refuge of a scoundrel against IRS refugees.

But the price of patriotism for Saverin was $67 million. That’s the amount Schumer estimates the expat will save by switching his citizenship from the United States to Singapore. Given that Singapore not only boasts freedom from the capital gains tax but also abolished its estate tax in 2008, the senator probably underestimates the entrepreneurs’ savings.

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About

Daniel J. Flynn is the author of numerous books, including "Blue Collar Intellectuals: When the Enlightened and the Everyman Elevated America," now available from ISI Books. Read Daniel's blog at www.flynnfiles.com.

  • Jakareh

    Saverin chose to become a citizen of the United States when it looked like the convenient thing to do. And, of course, he made his fortune in the United States. There is no reason why he shouldn't pay taxes to the United States. Chuck Schumer may be right about little else, but he's got this guy's number.

    • Merive

      Saverin paid more taxes to the profligate US government than you or I ever will.

      • Amused

        That's because he made more money than you or I "ever will " .He NEVER would have accomplished that in Brazil or his future home Singapore .
        But hey if he dont like the rules , then he SHOULD get F–K out , you should follow your money . Maybe Romney will go live off shore were his multiple millions are .
        I'm 62 , Ive got IRA's and 401k's worth $ 490k , if I make withdrawals they are taxed at 20 % ,and the last thing I would ever tyhink about is leaving the USA ,giving up my citizenship and becoming an ex-patriot . So IF you dont like it like Sevarin , you can get the F–K out too .

    • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

      He earned that money, if you worked that hard you might earn a lot too.

      And he paid an exit tax. He paid to leave, in spite of what Schumer is saying.
      http://www.expattaxandlaw.com/Exit_tax_877A_US_Ci…

      • Amused

        Still a dunce are ya Roger ?

        • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

          And how does that mean he didn't earn that money?

          You can't handle real debate on facts, so you resort to really lame insults.

  • pstmeoff

    Who gives you your rights? GOD! Not Man from Uncle Sam! Saverin has every RIGHT to move if he so chooses. I am wondering if Schumer did not have such a "strangle hold" on achievers what the outcome would have been for Saverin's moving decision. What kind of jobs he would have created if he would have chosen to retain his citizenship? I say use this story in the campaign to oust BO!

  • kafir4life

    Cheesy Chuck (you) is going to go ballistic when he realizes that Mark Z. won’t be paying any federal income tax unless and until he CHOOSES to. He just took a one dollar salary, down from a modest 600k. He can easily borrow money against his house and other assets including his FB stock. The interst on the loan is deductible. He’ll be able to keep his taxable income low enough to qualify for several federal programs, and possibly receive a tax refund.

    But if Mark (or Saverin) hit Cheesey’s tip jar, he’ll crawl back under his rock until he wants to extort some more.

  • BS77

    So he wants to return to Brazil…..who cares? It's his money, his life, his work, his own personal intent to move……Many US citizens settle in other countries and some acquire new citizenship …..so? It's dismal to watch our society turning into a Euro-style socialist astronomically taxed and PC controlled nanny state. Now everyone is a special needs victim eligible for welfare and other "entitlements"…..but let someone make big money on their own education, brilliance or ambition…and the liberal losers want a piece of the action.

  • H&R_ Barack

    How nice.

    Most of us shmues can't afford a plane ticket to "Go Galt!" in Singapore. –

    ~ We are too busy supporting the Itinerant immigrants, and the 49%!

  • flyingtiger

    I do not trust anyone who switches loyalities at the drop of a hat like Saverin. He is an example of the immigrant who comes to America to make money and then leaves. His role in the founding of Facebook was small. An American called Zuckerman did the real work.
    We should have laws, like in other countries, limiting the ownershop by foreigners. I would work to support American millionaires over foreiners any day.

    • Amused

      YOU GOT THE RIGHT FLYINGTIGER !! The rest of these schmuckls here of course disagree , that's because they would approve or say anything to continue licking the arses of the rich , of which is the prime directive of Republican /Conservative ideology ….even to applauding and defending P.O.S. s like Sevarin . Wanna leave afer making millions in the AMERICAN Economy , from AMERICAN Consumers ? Then you pay an EXIT TAX .

  • geopeyton

    Schumer is a sick man. What's next, build a wall to keep taxpayers in?

    • kafir4life

      He's beginning to get concerned about citizens being free to move from state to state, causing states like NY and Cal to suffer as the productive members move out, leaving the public unions and welfare folk to fend for themsleves. Expect legislation from Cheesers to prevent state to state moves if taxes are the reason for the move.

      • wctaqiyya

        Yes sir. Or maybe a tax penalty for leaving, checkpoints at the state borders and/or requiring permission slips from the authorities in the state of departure. It's coming.

  • marios

    Who counts voters bulletin will win election. Who collect tax payers money and control budget those win election as well.
    They buy voters to addict them to entailment programs. Using tax payers money Democraps seize power many times. Actually they are parasites living on our account.

  • wctaqiyya

    Smart money says the smart money will find a way. Out. As the political elite get more desperate for revenue and begin their rampage against the rich, the rich will leave. Don't buy stock in Facebook, buy up shares in the banks doing business in the tax haven countries. Malta comes to mind. The sooner the beast is starved for lack of money, the sooner we can get a limited government and a measure of individual liberty.

  • Ghostwriter

    It's sad that someone like Severin had to leave this country. I guess for people like Chuck Schumer,people like Severin are on earth to be taxed to pieces. But,sooner or later,we'll get a new president in and maybe all this nonsense will stop.

    • kafir4life

      Unfortunately, NYers are "Stuck with Chuck – 2012".

  • sod

    A good article on government versus wealth.
    If Saverin have something to blame, it's his ungrateful attitude, consider his origin, if not for US's generous policy, he would not have entered US, would not have entered Harvard, and would not have become a billionaire. So this is a morale issue. It's so hypocritical that leftist Demo party becomes moral awareness and engages in scrutinizing other people's morale.
    Apparently leftist Demo party can't blame anyone but itself. Being indoctrinated that entitlement is good, Saverin did what he was taught.
    Looks like the leftist Demo party is going to using this to blame the wealthy 1% again.

  • Amused

    Hey if corporate raiders like Romney , can wreck American companies , layoff the workers ,short sell the company ,screw those workers out of their health care and pensions , [and make Uncle Sam bailout 40% of those pensions ] , make millions , put the profits offshore and in Swiss Bank Accounts , what's the problem with this little turd , give up his citizenship and moving to Singapore ?
    That's the "American Way " , that's been what he was taught at Harvard ? Really ?
    And what ? " Moral " ? Gee what does Singapore contribute to World security ? How many 400 million doller fighter jets does Singapore have ? What is Singapores Military Budget ? How many Wars is Singapore engaged in ? Hows about Healthcare in Singapore ? Who maintains a billion dollar military presence in the Far East to ensure Singapores " Freedom " ?
    WHERE will little " Galty " go should he become deathly ill , to recieve the best treatment in the world ???LOL…what's a Singapore dollar worth and what will it get you ?

  • Amused

    I say .. A.M.F. and don't let the door hit you in arse on the way out . And order your Lamborgini direct from Italy .
    Maybe all the morons here applauding your action , oughta think about leaving too .

    • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

      I applaud his liberty and freedom to do as he in inclined.

      That was what America was about. That's why we want people like him to come here and do what they do best. Too bad America changed under liberals into something that needed to be avoided. Why should you be able to suck the lifeblood from him now that he worked hard enough to have some rewards?

  • Robert Pinkerton

    Let us not forget that Sen. Schumer is the biggest gun-hater in the Senate.

    • Amused

      What's that got tyo do with THIS issue ?

      • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

        He hates our freedoms, and the last resort we have to defend those liberties.

  • 080

    This is a bad trade. We keep Schumer and lose Savarin. It should have been vice versa.

  • kafirman

    The demoncrat party has it ALL backwards.

    If wealth is created (and it is) — and not merely transferred from the poor or middle class to the rich — then to chase away an effective entrepreneur is to toss away future growth.

    This is a symbolic act of the decline of America due to civil strife/class warfare culture of Washington DC.

    The comparison between the Brazilian organized crime syndicate specializing in kidnapping and the Amerikan organized government syndicate specializing in class warfare is delicious, if even underdeveloped for my moral palate!

    We need Romney to champion the moral case for zero capital gains tax. Zero capital gains brings together Americans with ideas with Americans with capital. Zero capital gains is the free market's alternative to welfare and centralized wealth redistribution. Zero capital gains does not disincentivize productivity. Any tax on capital gain is an attack on American productivity and the free market American community. It is a patently socioeconomic growth tax. A Capital gains tax is immoral. Hello Romney, Boehner!? This would be a good time to stand up and be a moral leader and get some votes to boot.

  • scum

    Remember, for every member of the world corporate elite who hides his money from his just responsibilities, your taxes go up. Enjoy the ride to the bottom. Zero capital gains tax? Are you kidding people?

  • Amused

    SHHHHHHHHHhhhhhh ! They'll figure it out sooner or later . Naaaaaaaa probably later ,as in too later .

  • topeka

    Had Ed stayed, at a lower tax rate, he would have paid more taxes in the long run.

    More important: Under such a hypothetical, we would be more prosperous.

    To the extent Ed abused the system? … Oh, yeah, as a member of the Lefty-Nepotism elite at Ha'va'd. How do you think they took Facebook from nothing to the No. 1 Social Media outlet? B/c all the geeks in Silicon valley are morons?

    How much could anyone do if they pulled together an investment portfolio with no cash flow, no IP, no track record, no proof of concept, no equity, … nothing but a business plan and a "rolodex" …?

    Sans "connections" you would be laughed at, cursed, ejected from offices, never again to doctor their door …

    • topeka

      "darken"

  • grafox709

    The distinguishing feature of the United States during the Cold War was that we had to put up barriers to keep people OUT while the communist world had to erect walls to keep people IN. While the free market's power was eventually enough to bring down the Iron Curtain, it seems we are in the process of erecting a 'Tax Curtain' that is evoking a response eerily similar to that of people living under communist tyranny. Just the fact that an increasing number of people are actually WANTING to leave the U.S. ought to be enough of a red flag to let us know that things are heading in a desperately wrong direction. As long as they are law-abiding, our best creative, inventive, entrepreneurial and successful people should not have to look away from our country to find liberty to control the fruits of their free-market endeavors.