

Senators want to block Facebook’s Saverin from reentering the U.S - option_greek
http://venturebeat.com/2012/05/17/senators-block-saverin-citizenship/

======
untog
We shouldn't punish people who take advantage of the US tax code, we should
change the codes they take advantage of. But that involves _actual work_ \-
reaching across the aisle, discussing, drafting and agreeing on law. I'm not
in any way surprised that the Senate would prefer to do anything else.

Quasi-related tax rant: I am not a US citizen, but I live here. I want to get
a green card (the process for that is another rant entirely). If I get one, I
will owe tax on my earnings in _any_ country. Earn £20,000 in the UK? Well,
the UK gets a tax cut of that. Oh, and so does the US, for reasons unknown.
America is the only country that does this, as far as I know.

~~~
ios84dev
The US wouldn't get a cut of that unless the exchange rate really sucked and
that £20,000 was worth more than $90,000. Plus any UK taxes you paid on it
(assuming there is a taxation treaty between the UK and US) are deductible
from your US tax liability.

In general you have to either live in a country that doesn't have a tax treaty
with the US or not pay taxes on your income in the country in which you
reside.

~~~
hnwh
That is only true for "Earned Income" if he's not self employed. If he's a web
contractor for example, he still has to pay self-employment taxes %15.3 of his
UK earned income received from his UK clients, EVEN IF HE LIVES IN THE UK...
to the US... fair? really?

[http://www.irs.gov/publications/p54/ch03.html#en_US_2011_pub...](http://www.irs.gov/publications/p54/ch03.html#en_US_2011_publink100047390)

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ABS
A Brazilian who got US citizenship, helped create thousands of jobs in the US,
moved to Singapore in _2009_ and effectively lives and works there since then,
applied to drop his US citizenship in January 2011 and will pay the exit tax
for it will now potentially be subjected to an illegal (re constitution)
retroactive law to "punish" him when the main reason (I speculate) he decided
to do so is the crazy American legislation that wants expats to pay their
taxes twice (abroad and at home) even if they really live and work abroad?

Ah..it's election year

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victork2
Why not, after all actions must have consequences. If he wants to avoid taxes
and it's legal by all means he should do it. But there should be consequences
to his actions, this proposition seems like a possible one (quite extreme
though).

I would like to remind all the wannabe rich on HN who believe that one day
they will be in his shoes, nobody succeeds alone and your success has a price
for the country. For example in the case of Facebook there are more
infrastructure costs for the whole internet, additional regulations have to be
passed, etc...

PS: Ghostery on Venturebeat: 17 spying widgets found... Not going on that
website ever again.

~~~
mvkel
Isn't this completely backwards? Why would you be able to punish someone for
doing something completely legal? Do we punish profitable corporations who pay
no tax? Of course not; they're abiding by the laws. If you want to prevent
this stuff from happening, change the law.

~~~
ArtB
> If you want to prevent this stuff from happening, change the law.

Isn't that what they are trying to do?

~~~
yashchandra
"Isn't that what they are trying to do?"

No they are not. They are trying to skim money out of someone who worked his
ass off and when it is time to get paid, he is being shortchanged.

~~~
rprasad
The only thing he provided was the angel funding for Facebook. He literally
hasn't done any work to earn the increase in the value of Facebook's stock
since he got fired a few months after Facebook launched. This guy is
practically _the_ reason for founder vesting cliffs.

He's not being shortchanged; he's done nothing to earn this money.

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mindcrime
A better idea would be to deport the Senators to Somalia or Turkmenistan or
somewhere, and block them from re-entering the U.S.

~~~
cluda01
How would this help anything?

~~~
mindcrime
It would be a start. Our government is totally evil, corrupt, and invasive.
Anything that takes away from their ability to interfere with things is a Good
Thing.

Deport all the Senators, then the House Reps, then all of the judges, the
President, Vice President, and then start on the rank-and-file bureaucrats...
Oh, how I long for that day.

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wpietri
My understanding is that the rule blocking reentry from people who drop
citizenship for tax reasons is longstanding. I'm entirely in favor of both the
rule and the application in this case.

This goes on frequently within the US, too. A friend of friends made north of
$100m in the dot-com bubble on a company that later collapsed. He made his
money in SF, but bought a house in Nevada so that he could dodge the
California taxes.

It may be legal, but it was a douchebag move, the moral equivalent of going
out for a meal with a big group and sneaking out before the check arrives.

~~~
yashchandra
"the moral equivalent of going out for a meal with a big group and sneaking
out before the check arrives."

Not quite. Saverin played a major part in cooking the meal (using your
analogy) and deserves his fair share of sneaking out before the check arrives.
Heck, he should be paid for making the meal and a thank you!!

~~~
wpietri
Please. The fellow played a modest early role and was then forced out because
he wasn't competent to handle the rest. His was a minor role in a major
startup, and he is basically a lottery winner. For which I say: congrats!

Also, you misunderstand restaurants in the same way you misunderstand
economies. The guy who chops the vegetables in the 3 months after the
restaurant opens should certainly be paid and thanked. But his job only exists
because of heavy investment by the restaurateur.

And that sous chef should still pay his taxes just like everybody else,
because restaurants are heavily dependent on civic infrastructure.

~~~
yummyfajitas
_And that sous chef should still pay his taxes just like everybody else,
because restaurants are heavily dependent on civic infrastructure._

The issue in question is whether the sous chef, after leaving the US
permanently and renouncing his citizenship, should pay taxes to the US on his
investments above and beyond what any foreign investor would pay.

Saverin did pay his taxes just like everybody else. The question is whether he
should now pay taxes above and beyond what other Singaporeans are obligated to
pay.

~~~
wpietri
Do you have any evidence that he's sold all his stock? Because he wouldn't
have paid all his capital gains tax until the last share is sold.

If he has indeed paid all the tax on the Facebook lottery winnings, then I
don't have a problem with him renouncing his citizenship. But I've seen
estimates that he saves $100m by doing this, and I presume that's because he
still has the stock.

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clarky07
This is political BS aimed at making rich people look bad in an election year
and nothing else. As if 60 million means anything at all to our budget. Less
than 2k people left last year. At most we are talking about a few billion in a
multiple trillion budget. It just doesn't matter. The negatives of not having
intelligent businessmen ever come back far outweighs the few bucks we could
have taken from them. I'm just going out on a limb, but I suspect facebook has
generated more than 60 million for the government so far.

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bking
I find it funny that the US is acting like a scathed lover when in actuality
it was her own restrictive propensities that push him away. GG USA for scaring
away another great BF.

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cantankerous
I don't get why people keep saying Saverin filing his paperwork in January
2011 makes it _completely obvious_ that he was _not_ doing this to avoid
paying taxes. Facebook was going to have an IPO and the guy was clearly
preparing for it.

It may not be illegal, but it sure is disgusting.

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dougb
I just sent a letter to Sen Casey, one of my senators. I want to know why he
is wasting his time on this crap. I can think of a lot of other issues that he
should be spending his time on.

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Jabbles
Wouldn't this be a retroactive law? Surely it wouldn't apply to him as he
renounced his citizenship before the law was made?

~~~
rprasad
No, the restriction only applies to criminal laws.

Also, having renounced his citizenship and already given up his U.S.
residency, he is no longer subject to the protections of the U.S.
constitution.

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boonez123
Lots of Rich people pay less income tax than the middle working class or even
the lower working class. Should we kick them out of the country too, for being
intelligent?

Don't we all want to pay less tax? If there was a legal loophole would you do
it?

~~~
wpietri
I don't particularly want to pay less tax. I just want to pay my fair share.
Having lived in places with much shoddier governments, I think I get pretty
good value on my dollar. So when somebody is trying to dodge their fair sahre,
I don't like it.

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analyst74
What about the hoards of riches who invest in foreign countries?

I mean, they made their money in the US, not just do they use the
infrastructure, but also take money from American people directly.

Now they want to send the money out, and help other countries to start
businesses and create jobs?! They might as well live in those 3rd world
countries themselves, forever!

~~~
ABS
if they are US citizens they pay taxes in the US even if they do live in those
"3rd world countries" 9after having paid whatever taxes they owe to the "3rd
world countries"...)

------
seiji
Does this mean we can stop Arrington from reentering California too?

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mseebach
The visa rules already say this, as was pointed out by pretty much all news
stories at the time. Is there any way this isn't just grandstanding and cheap
point-scoring?

[http://www.uscis.gov/ilink/docView/22CFR/HTML/22CFR/0-0-0-1/...](http://www.uscis.gov/ilink/docView/22CFR/HTML/22CFR/0-0-0-1/0-0-0-55/0-0-0-441.html)

~~~
nirvana
There's no evidence he qualifies under that clause. He didn't renounce to
avoid taxation, quite the opposite: He was paid up on his taxes and paid an
"exit tax" according to the quote in an article I read last night.

The USA requires you to get permission before renouncing. Part of the process
of getting that permission is being audited by the IRS to make sure you're up
to date on your taxes, and paying an excise tax on the money you're taking out
of the country.

The clause you're referring to is for people who sneak money out of the
country and then trick the US into "letting" them renounce where the US thinks
they are up to date on their taxes but they aren't because they hid the money.

There's no evidence he has hid any money, and no evidence that he has
renounced to avoid paying taxes.

Unlike most countries, the USA taxes citizens on their worldwide income, no
matter where it is earned or where they live. This means that unless you want
to be paying taxes to the USA for money earned outside the USA for businesses
outside the USA, you have to renounce.

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cft
California is 20% illegal immigrants, paying no tax at all. Those ones they do
not block from entering...

~~~
Bud
This doesn't pass the laugh test, even if you had a source, which you don't.

Have you heard of the sales tax? You might have come across mention of it
somewhere. I'll give you a hint. It's around 9% in CA, depending on where you
live.

------
kamaal
Non US citizen here.

I think the senators are taking this personally. More than 'He didn't pay the
tax' this is about 'Does US no longer matter that people are renouncing
citizenship?'

The fact is rest of world thinks they don't need US or go to US to do big
things, anymore. That is something for the Senators to think about.

------
nirvana
Sure, lets keep foreign born past citizens who helped create $100B companies
from coming back to the USA. That will show them!

I really don't think we could survive another attack on the order of Facebook!

~~~
kemiller
I don't think Saverin's contributions are really proportionate to his
windfall. But even that aside, yes, it's great that people come to this
country to build things. But this country also offers a lot that makes that
possible (there's a reason they come here, after all), not least the
enforcement of laws and a relatively level playing field, and part of the
bargain is that you pay some back when you win.

You could argue that what he's doing now amounts to insider trading.

~~~
nirvana
You seem to be arguing that he didn't "pay some back when you win". However,
as part of the renunciation process you have to be up to date on your taxes,
and you have to pay a tax on any money you move out of the USA. Thus he's
already paid his taxes.

Now he's a citizen and resident of singapore. He's got a couple investments
there. But your claim that he owes the US taxes on what he built in the USA
would seem to no longer apply, right? Since he's building the next thing in
singapore, wouldn't he owe singaporean taxes?

If he didn't renounce, the US government would be taxing him on the money he
makes in Singapore on a singapore business as well. Even though he's no longer
benefiting from the "services" provided by the US government.

The US is unusual in the fact that it taxes citizens on their worldwide
income. Further, it imposes fairly onerous reporting requirements that make it
difficult for US citizens who live outside the USA to conduct business.

Just because he spent 10 years here, doesn't mean the US really deserves a cut
of everything he makes for the rest of his life. This is why there's a
renunciation process, and he has gone thru that process legally.

~~~
kemiller
I think the way the US claims taxes on foreign income is wrong. But this is
clearly not foreign income, and he's leaving with clear foreknowledge of a
likely future windfall.

I don't think anyone is claiming he has not complied with the law. They're
saying that if he wants to renounce citizenship, he must also renounce the
benefits of being in the US. If that's truly his intention anyway, then he has
nothing to worry about, right?

I'm sure that even if this happens he's not going to shed many tears. If he
wants to see his family, they can just meet somewhere else.

~~~
nirvana
Either he sold his Facebook stock before leaving, in which case he already
paid taxes on it. Or he didn't, and since FB is an american company listed on
an american exchange, when he sells any of it he'll still be subjected to long
term capital gains, as any other non-US citizen who owns stock on a US
exchange is.

Thus the only thing to be upset about is that we have a person who has the
ability to produce a high income for himself that the USA can no longer tax.

~~~
gsb
Non-resident aliens are specifically excluded from paying capital gains to the
US. I wonder why? The US also refuses to collect information on income earned
in the US by foreign residents (currently there are some efforts to change
this, being obstructed by congress). Of course if you suggest that this means
the US is a tax haven then you are in for an earful. Other, bad, countries are
tax havens. Never the magnificent USA!

A far more equitable solution to the Saverin 'problem' would be to apply CGT
to ALL US-derived gains. Most countries do this. But that is unlikely to
happen as it would reduce foreign investment...

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yashchandra
I do not understand the fuss about this. If Saverin gave up his US citizenship
legally, plans to live _outside_ the US for many years, who cares what taxes
is he avoiding? These senators need to get their acts together and fix the tax
code instead.

~~~
kemiller
If he truly intends to live outside the country and not return here, then
what's proposed has no teeth. But it's more likely that he's doing what many
wealthy people have done before him, namely renouncing citizenship officially,
but continuing to spend as much time as they please in the US. It actually
seems pretty reasonable to deny reentry to someone who has left and had a nice
windfall as a result. (Perhaps cleaner: demand repatriation of any capital
gains as a condition of visa issuance. Assets acquired _after_ the
renunciation are of course exempt.)

~~~
ABS
he's been living and working in Singapore since 2009 and there is no way for a
non citizen "to spend as much time as they please in the US". You'd need a
Visa that is linked to work and in that case work would be of course taxed in
US.

~~~
kemiller
Wealthy people can get investment visas pretty easily:

<http://en.wikipedia.org/wiki/E-2_visa>

~~~
ABS
which is what I wrote: there is no way he can just spend as much time as he
wants without approval, supervision. And the Visa can be rejected

