Senators want to tax Americans, even after renouncing citizenship
Senators Charles Schumer (D-New York) and Bob Casey (D-Pennsylvania) are suggesting that Congress hears a law that would force former citizens of the US to pay hefty taxes long after renouncing their citizenship and also bans them from ever setting foot again on American soil.
The proposed legislation is being dubbed the Ex-PATRIOT Act, an obnoxious acronym for the Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy bill. If passed, it intends to put pressure on US citizens from saying sayonara and shipping off elsewhere.
The Ex-PATRIOT Act is being called a direct response to the recently publicized news that Facebook co-founder Eduardo Saverin has become a citizen of Singapore, a maneuver which is expected to save him tens of millions of dollars in US taxes. Saverin says it isn’t a taxation issue; Schumers says it’s a “scheme.”
The New York Times reports that Saverin stands to make upwards of $4 billion when Facebook goes public later this week. Although he still has shares in the company, the co-founder parted ways with Mark Zuckerberg and the rest of the social networking site shortly after he helped it get off the ground nearly a decade ago. He filed the paperwork to become a citizen of Singapore in January 2011 and was approved in September. Only recently, however, was the news publicized after the Internal Revenue Service published the names of recently declared expats.
“This had nothing to do with taxes,” Saverin explains in an interview with The Times published on Thursday. “I was born in Brazil, I was an American citizen for about 10 years. I thought of myself as a global citizen.”
In 2011 alone, the IRS reports that at least 1,788 Americans officially renounced their US citizenship. Saverin is reported to have settled down in Singapore after visiting there three years ago.
"Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time," his spokesman, Tom Goodman, tells Bloomberg News.
Regardless of his intentions, Sens. Schumer and Casey want to make sure that other Americans aren’t encouraged to do the same. In a statement issued before they formally proposed the legislation, the lawmakers call Saverin’s move an “outrage” that was done only to “help him duck” paying taxes.
Singapore has no capital gains tax, unlike the States.