Sometimes it's hard being a patriot. Especially when the laws of the land in
which one is a denizen have evolved in a manner that treats him no longer as a
productive contributor to society, but as a golden-egg-laying-goose. And then
gets angry when he flies away.
Eduardo Saverin, co-founder of Facebook, just renounced his American
citizenship. His spokesperson explains the reasoning "as a financial
rather than a tax motive". He is now coming under serious heat for being
"ungrateful", "unpatriotic" and most amusingly,
"unlikeable". (Does one "un-like" him on Facebook, we
wonder?)
The numbers: Saverin's stake in Facebook is 4%. If the optimistic assessors
of Facebook's IPO capitalization are correct, that is worth $3.84 billion. (Ask
Bloomberg.com.)
There are several aspects of this development that we think deserve
clarification and pontification:
1. Saverin was born in Brazil, not America. Yes, he did have American
citizenship. No, we are not saying that a foreign-born, naturalized citizen
cannot have warm fuzzies about his or her new country. But we will suggest that
his ability to prosper professionally may eclipse his concern about the crest
on the cover of his passport.
2. Does occupying space in a country, and becoming wealthy while doing so,
automatically justify that country's complete ownership of a portion of that
wealth, without warranting the slightest protest?
Saverin is savvy. Having established where his priorities likely lie in #1,
we will now be so bold as to suggest that he feels entitled to the freedom of
choice exhibited by billions of people every day, when they choose Tide over
All, based on cost, usage, and how much they like the smell. It is perfectly legal for him to be a discerning shopper.
Why would Saverin remain in a situation that limits his ability to invest in
international outfits he finds compelling, and takes more of what he has earned
than someone else will in another land?
The US tax system regulatory framework places the burden of reporting the
movement of capital in US citizens' accounts on the foreign financial
institution that houses them. (Ask wikipedia.org about Foreign Account Tax
Compliance Act (FATCA)). This represents a lot of expensive paperwork, making
Americans, again, pains-in-the-you-know-what. (Sigh.)
Singapore, Saverin's new domain of choice, also has no capital gains tax.
You can bet that dollar that you are about to spend on Facebook stock that that will represent enormous savings over America's
15% (long term) going rate.
3. CBSNews.com will attest to the fact that "many say [he] owes his
good fortune to his very American Harvard education and the California-fueled
Internet boom". So . . . circumstances really are everything? Saverin did
not have to work all that hard, persevere, prove himself, and think outside of
the box, nearly getting crushed in the process? He just had to show up, and
America did the rest?
This is part devil's advocacy, part melodrama, but the question must be posed: to what extent can a country, a government, a tax system, or an
academic institution claim that it is the reason for an individual's
world-changing success?
Relevanti is 100% American, and not afraid to say it. But we refuse to stand
by and see someone trashed for deciding that his money, his interests and his
well-being were better served elsewhere. This is a cautionary tale for the
regulators and anyone who can spare a thought for what Saverin's move represents on a societal level : good ideas and good people must be nurtured, not exploited, or
choked. Or they will, indeed, leave.
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