Posted on 05/22/2012 9:27:21 AM PDT by SeekAndFind
Skip to 7:15 for the key bit. In fairness, he emphasizes that he'll support it only if it's "necessary." There's already an "exit tax" on the books, which Saverin paid, and a separate law that says an expatriate can be barred from re-entering the U.S. if the DOJ determines that he renounced his citizenship for tax purposes. Saverin quit the U.S., evidently with his tax liability in mind, because leaving before the IPO meant the "exit tax" would apply only to the gains on his Facebook shares as of his departure. (It also spared him from a potentially enormous estate tax bill, assuming the estate tax goes back into effect next year.) Schumer's bill would build on the current legal framework. Details via TechCrunch:
It’s pretty big: any ex-pat with either a net worth of over $2 million, or an average income tax liability of at least $148,000 over the last five years, “will be presumed to have renounced their citizenship for tax avoidance purposes.” The ex-pat will have to demonstrate to the IRS that this is not the case if it is not. If there is a “legitimate reason” for that person living outside the U.S. no penalties will apply. But if the IRS finds that someone gave up their passport for tax purposes, they will impose a tax on that individual’s investment gains “no matter where he or she resides.”
The rate of that capital gains tax will be 30 percent — the same that non-resident aliens currently pay on dividends and interest earnings.
The tax detailed this act, if approved, will backdate for 10 years after its approval.
Are those new provisions “necessary”? Schumer and his co-sponsor, Bob Casey, sure think so: They’ve seized on Boehner’s comments to Stephanopoulos yesterday to demand that he bring the bill to the floor in the House. Given that Grover Norquist compared it last week to some sort of Nazi initiative, I’m guessing that would be a mighty interesting vote. In fact, given how bitterly the Schumer bill was attacked last week by conservatives, I’m shocked that Boehner even tepidly endorsed it here. His basic point is straightforward: It’s “outrageous” that anyone would value their citizenship so cheaply that they’d discard it to save money. Being an American should mean more than that. The knock from the right, though, is that Saverin was simply responding rationally to terrible tax policies; if you don’t want entrepreneurs to leave, enact tax reform that makes the U.S. more competitive globally. I think the response from NRO’s David French is more persuasive (would doves who renounce their citizenship because they disfavor U.S. foreign policy be applauded?), but unlike Boehner, even French thinks Schumer’s bill is a lame gimmick. I’d love to see a poll on the subject, but in the meantime Boehner will spend a few days squirming while his office figures out why the Schumer/Casey bill isn’t so “necessary” after all.
How the heck did Boehner become Speaker of the House ( and second in line to be President ) again?
Boehner’s staff should research the legality and constitutionality of bills of attainder and ex post facto laws for him because he clearly isn’t using his head at all.
I’m not sure how Saverin renouncing his citizenship prevents a tax liability in the first place.
So, if Facebook tanks (it's now at $32), does the gubmint owe money to him?
What a complete flipping idiot Boehner is. My sweetie was right! They are all crooks!
Here’s a post from the Hotair website for your consideration:
Saverin owes no tax on his Facebook shares until he sells any shares.
In fact he never has to pay any tax on it he so chooses. He can borrow against it to the tune of millions a year and then write off the interest charge against other income.
It is a method used by all the Warren Buffett’s of the world so they pay less tax than the paperboy.
For this you can thank the Congress for writing a 78,000 page tax code. Saverin leaving has nothing to do with taxes.
Lotsa people willing to support something like this on the grounds that making your fortune here and then leaving without paying your “fair share” of taxes is “unpatriotic”.
The same people who voted for Ross Perot in ‘92.
Unthinkable! Should not even be a remote possibility, Boner.
Cut spending to reasonable levels, fix the tax code with reasonable rates, fix the business climate by rolling back onerous regulation, and they will again be beating our door down to get in, not to get out.
Good post. Thanks!
RE: So, if Facebook tanks (it’s now at $32), does the gubmint owe money to him?
The freedom that Saverin enjoyed in this country was the result not of the government (which would happily expand to totalitarian dimensions if it could) or of the ruling class , but of many generations of citizens working to restrain both.
The US government did not “give” Saverin the freedom to prosper. That freedom is his RIGHT ( as it is with all other Americans ).
So his leaving the country has nothing to do with taxes?
That’s kind of what I thought but, naturally, that is not how it’s being reported.
RE: Lotsa people willing to support something like this on the grounds that making your fortune here and then leaving without paying your “fair share” of taxes is “unpatriotic”.
__________________________
The person who posted this response to the same sentiment (in Hotair) has it right:
Saverin Should be Grateful to the US government says the Nationalists.
If one prison guard beats you twenty times a day while the other guards beat you fifty times a day, then you’ll certainly prefer the first guard to the others – but should you be grateful to him? Or should you jump at the chance to switch to a guard who beats you only ten times a day? All the examples of things for which Saverin “owes” the u.s. are respects in which u.s. laws are less oppressive than the laws of many other countries. Being less oppressed is like being beaten less often.
Gratitude is an appropriate response to receiving a favour or a privilege. Freedom is a right, not a privilege; demanding that people be “grateful” for not having their freedom violated so much is morally obscene. In any case, the freedom that Saverin enjoyed in this country was the result not of the government (which would happily expand to totalitarian dimensions if it could) or of the ruling class (ditto), but of many generations of citizens working to restrain both. So asking Saverin to feel grateful to the government, and surrender his money to it, is like asking a patient to be grateful to a virus because, thanks to inoculations, he doesn’t suffer too badly from it.
Jingoistic, hyper-nationalist rants like are incompatible with the principles of the Declaration of Independence. Governments owe allegiance to their citizens, not vice versa.
I understand all that, not sure why you felt the need to point it out to me.
The irony is that he left town because he expected to make a bundle, and Boehner and Co. had their hands in his pocket. Given that that bundle has failed to materialize, I was (sarcastically) wondering if it worked the other way around, as well.
This is one of the guys who will be counted on to push President Romney to the right. /s
Such a law would not attract investors from overseas. Isn’t this taxation like France’s laws against layoffs of workers. Both have terrible effects: France then gets large unemployment (because who can afford a worker who can’t be laid off), and the U.S. would stop the flow of entrepreneurs into the U.S. Many successful U.S. countries were started by immigrants (Intel’s Andy Grrove comes to mind). Below is a link of large U.S. companies founded by foreigners who came to the U.S. to build a company (and thus provide high-paying U.S. jobs).
That Boehner supports this stupid exercise in envy (and the clawback to prior years) augurs for his immediate replacement.
I’m reminded of the Hong Kong business people who immigrated into Vancouver, Canada. When Canada started to tax worldwide income, all the Chinese sold their big mansions and moved back, causing a real estate bust that was only improved when the Chinese from other parts moved ONLY THEIR FAMILIES to Canada. The businessmen stayed home.
DOING anything about it is another matter.
Oh, and Chucky, where's your budget bill?
This proposed bill from Chucky Schmucky is more than likely a Bill of Attainder and is therefore unconstitutional.
American citizenship should just be for those who pay for it, fair and square
Like the millions of people who sneak over our border, pay no taxes, use our services, and then add insult by filing federal taxes claiming kids back in Mexico for child credits - cost now up to about $5 billion a year
Like Jeffery Immelt and his zero corporate tax bill
Warren Buffet and his billion in unpaid taxes
And for the obama cronies who ran Solyndra into the ground after milking taxpayers for over a BILLION in bad loans to prop up a faux company
Oh, and Jon Corzine. Mr “Fiduciary” of the year
Now there’s the kind of patriots America needs
When are you find folks going to kick Boehner out and replace him with a smart Tea Party person?
It’s getting late!!! Get cracking now!!!! Today!!!
Yet another GOP “leader” speaks. They’re best off if they’d simply STFU.
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