On Tue, May 22, 2012 at 9:47 AM, John Sundman <[email protected]> wrote: > Re: "Supposed": > > Hmm. . . > > Amusing and intriguing. > > Is there anybody besides Severin and his lawyer who asserts with a straight > face that his renunciation of USian citizenship wasn't a tax dodge?
Is there a problem with his doing so as a tax dodge? He lives in Singapore. From people who know him, his primary grouse was not the facebook thingy, but the fact that the IRS wanted to closely follow and tax even his Asian investments (the US taxes citizens even on their income earned if they are not resident in the US). So if he bought into an Asian company, he'd have to pay US taxes on the gains he makes, despite his living in Asia and investing here. Singapore charges no capital gains taxes. IMHO if it was a tax dodge, it wasn't about Facebook. And dodging taxes - legally - is fine according to the whole world and Vodafone, isn't it? On Facebook: If the US wants, it can charge Saverin capital gains when he exits. Except the US does not charge foreign (non US Citizen) residents any capital gains taxes. Therefore Saverin, as a non-US national non-resident will get charged no US taxes for this facebook gains, and I wouldn't either if I bought and sold FB shares. But he does get taxed on the day of renouncement of citizenship; The US assumes he sold all his assets on the day of renouncement and the market value on the renouncement day is assumed to be the price obtained (even if Saverin did not actually sell on that day) That means he paid capital gains upto that price. Now that price was lower than the Facebook price on its IPO, so some people are outraged that Saverin didn't wait till the IPO to pay the HIGHER capital gains tax he would have paid. Which is ridiculous as an argument, even if you consider that Facebook shares have now fallen more than 10% from the IPO price anyhow. In any case, the US can change cap gains laws to charge any non-resident non-citizen also, on any gains made in the US markets. It's strange to do (countries like India charge it, but provide exceptions like Mauritius) but then the rule would apply to everyone, not just Saverin. Strange that no one is asking for it. Hey it could even be retrospective (like India did). The tax dodge argument: consider that corporations do it all the time, moving their income into other subsidiaries abroad when it suits them. Relinquishing citizenship is done often, even by Indians who were benefited by the low cost IITs that were subsidized from the taxes of the many, and there can be no shame in it.
