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Facebook Founder Goes Galt
Posted By Daniel Flynn On May 18, 2012 @ 12:20 am In Daily Mailer,FrontPage | 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.
Could not the Facebook founder just as easily slam the patriotism of politicians, whose sponging off the capitalists they slam inevitably results in capital flight?
There can’t but be a fundamental difference between how a thirtysomething tech tychoon and a sixtysomething lifetime politician sees taxes. For the freeloading pol, taxes are his lifeblood. For the free-market producer, taxes are parasites upon his lifeblood. The former sees the state as the exclusive source of his earnings and the latter sees it as the main drain upon his earnings. Schumer and Saverin don’t just live in different hemispheres. They inhabit different worlds.
But if Saverin has seceded from the world Chuck Schumer helped create, Schumer, an online exhibitionist who still posts his musings and mug for all to see on a certain social network, has yet to secede from the one Saverin and classmates created. One gleans much about a man from his Facebook page. Schumer’s face appears more than a dozen times on his. He “likes” New York Governor Andrew Cuomo, Maryland Senator Ben Cardin, New Jersey Senator Bob Menendez, New Jersey Senator Frank Lautenberg, and the White House. Judging by his life and his “likes,” Chuck Schumer likes politics. He also likes Facebook—just not one of the kids who started it.
Eduardo Saverin has less use for the product of Chuck Schumer’s work, which consists of making money by taking money from those in the business of making money. With federal capital gains, estate, and income taxes set to rise at year’s end, Saverin “defriended” Barack Obama’s America in January 2011. Last September, the U.S. government updated his status. That Chuck Schumer only took notice of this on the eve of one of the most anticipated stock offerings in Wall Street history demonstrates that the senator is as interested in squeezing Facebook for camera time as he is for squeezing it for cash flow.
The Brazilian billionaire bedeviling the Brooklyn boondoggler is not alone. Just 235 Americans renounced their citizenship in 2008. Last year, 1,780 Americans did so. The exodus involves not just wealthy, high-skilled residents.The Pew Hispanic Center found that “the trend lines within this latest five-year period suggest that return flow to Mexico probably exceeded the inflow from Mexico during the past year or two.” Remarkably, for perhaps the first time in U.S. history, America’s southern border sees more traffic departing than entering.
Productive people used to migrate to the United States to make their dreams a reality. Now productive immigrants move elsewhere to realize their dreams—and earnings. The American Dream ain’t what it used to be.
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