[vladd]

It's legal to give up your citizenship - he plans to live in Singapore and he must still pay the exit tax. This is what the law says and he doesn't break it.

If you want to discuss this emotionally, try to see his point of view as well: US is the only nation in the world (ok, maybe with 1-2 other exceptions from Africa) where residency doesn't determine the tax authority you're subject to. He plans to live and have his residency in Singapore and pay taxes there but US would still like to have his tax money, who's the ass?

[geebee]

Yeah, fair enough, it's legal and I'm sure he has the legal representation to abide by the letter of the law.

That said... if I wanted to present a highly sympathetic portrait of someone renouncing US citizenship because of the unusual policy of taxing citizens overseas, this isn't the case I'd pick.

I believe that Saverin benefitted tremendously from being in the US, as a US citizen, and that his earnings (ie., proceeds from the IPO) are a direct result of having been in the US for this time. When you work at a startup, you are essentially working for the prospect of future earnings (in a way, it's a form of deferred earnings, except of course it's highly unpredictable). He has found a clever way to be a US citizen while his earnings are unrealized, but not a US citizen once they are.

This is very different from the case where a person earning a salary in the US moves overseas and lives and earns a salary as a resident of a different country.

By the way, I've never read a real defense of the unusual policy of taxing US citizens who live abroad, and I am a little worried I'm overlooking something here. Does anyone know what the justification for this is? Or why it's justifiable for the US but not (essentially) every other country?

[waterlesscloud]

He's still going to pay taxes on billions of dollars. Just fewer billions than if he'd waited longer.

[wtvanhest]

He can't possibly be saving more than $500M in taxes. To me it seems worth it to pay $500M in taxes and retain all the protections the United States provides. Get kidnapped? I want the US backing me.

http://www.foxnews.com/politics/2009/04/12/navy-seals-kill-p...

Just google "US Citizen Freed" and you will find countless examples of US Gov intervention and protection that simply cannot be bought.

He is now a much, much better kidnapping target since he is one of just a few non US citizens with over a Billion dollars who has no real protection. Do you think Singapore can protect him? His lawyer just made a huge fee and looks smart but gave up his clients relatively inexpensive protection.

I just don't get it.

[white_devil]

Right, because the Navy Seals would spring into action to rescue him if he ever got into trouble, any time, any place.

I bet this homeless guy was super-glad to be a US citizen too: http://reason.com/blog/2012/05/08/the-da-just-released-surve...

> Do you think Singapore can protect him?

They could, if they wanted to. Just like the US could if it wanted to.

But he's probably better off just buying protection by himself, or not flaunting his riches.

[sbov]

> He is now a much, much better kidnapping target since he is one of just a few non US citizens with over a Billion dollars who has no real protection.

Somewhat interesting, considering his parents fled to the US because gangs in Brazil had him on a "to-kidnap-list". If anyone were aware of the problem I'd think he would be.

[why-el]

This is a very stereotypical view of Singapore. The idea that once outside the US everyone is a "better" kidnapping target is just absurd.

[wtvanhest]

I am 100% sure he will want to travel outside of Singapore. He has a few billion dollars. He better pick ultra safe locations for vacations.

[lawnchair_larry]

I find this line of thinking disturbing. I don't think it is worth it for a single person to pay $500M for anything. If this was a real concern, you could buy one hell of a personal army for $500M.

[wtvanhest]

Obviously security is only one part of what he gets.

[dons]

Personal bodyguards for life will be a lot cheaper.

[wtvanhest]

I would rather not have to have a large group of people with me everywhere I go. To me, that is worth $500m of $4B.

He obviously has different priorities.

[geebee]

True. But do you consider those extra billions to be money he didn't earn in the United States? In this case, it does seem like the US is going after income that was properly earned in the US, it's just that with startups (and IPOs), you can cleverly renounce your citizenship in between the time the work is done and the money is realized.

I see this as different from someone going over to England, working, opening an account, making investments, and discovering that they owe (or at least have to file) with the US.

[amalag]

There are usually tax agreements with countries to avoid double taxation.

[psykotic]

The US is one of the few countries that doesn't allow its citizens to avoid double taxation. You are still liable for US taxes on foreign-earned income above $80,000 per year.

[timbre]

You can deduct taxes paid to your country of residence, so it's more max-taxation than double-taxation.

[haasted]

I can confirm this.

Americans living in Denmark don't seem to worry too much about US tax. This is due to the insane taxation level we have here, which blows all other levels out of the water and makes calculating US tax very easy.

[velshin]

I lived abroad for years and was double taxed on part of my income. The tax treaties and exclusions are limited to certain dollar amounts. He's likely well above those limits.

[twinturbo]

seriously. US tax system....lol.