Saverin had paid for the cost of the entire American legal system? And the educational system? And the American military effort in World War II? Wow, I guess he really did get hit on taxes.
I know, you’re not saying he paid for all of those things. But by your logic, shouldn’t he have? If Saverin doesn’t want to pay for benefits that other people will receive, then why does he deserve to receive benefits that other people paid for? If Saverin wants to go it alone, then he should assume the obligations of that belief as well as shrugging off its burdens.
Saverin was apparently happy to be one of the millions of people who received things from America. He just doesn’t want to be one of the millions of people who contribute something to America.
Do you count a 15% total income tax as “the bottom”. If I recall correctly, the United States didn’t have any income tax for the first half of its history, and even after the 16th amendment was passed, the federal income tax was in the low single digits for awhile. In my estimation, tax competition is a good thing for the same reason that competition in any field is a good thing. It increases the chances that the people will be able to get what they want, or at least something reasonably close to what they want, whereas with a single entity setting tax rates for everyone, that entity has little personal motivation to listen to the people’s views.
America during the first half of its history was a very different place than America is today.
Aside form a two year aberration in the early 1990’s, federal income taxes have not been this low since the Great Depression. The tax rate from 1913 to 1915 is hardly relevant here.
Tax competition among nations is largely a race to the bottom for the benefit of those who have portable income generating capacity. Tax competition among the states is largely a form of cannibalism.
so since he owes everything he has to America, maybe he should give everything he has back to the US Treasury. :rolleyes:
So what is a fair amount to pay and will you make everyone pay an equal amount in taxes since they all got roughly equal benefit from being an American?
That would be true if “the people” all wanted the same things, all had the same amount of influence, or all had the same ability to go where they most wanted.
When a business relocates, the boss may try to find a town that will cut him the best deal on taxes or infrastructure improvements. But not everyone runs a business. Some people don’t have the economic influence to get the government (at whatever level) to make special rules for them. Some people don’t have the means to move to wherever they feel the rules most suit them.
A government should represent the needs of all its citizens equally. The race to the bottom applies when only certain people have the ability to play one government off against another.
I had thought that our Draconian tax laws had put an end to such things as fleeing the long arm of the IRS. Wasn’t an Expatriation tax or something put into law during the Bush administration? From what I remember of it, when you drop your US citizenship and have more than $2 million in assets, the govt automatically assumes that you are trying to evade taxes. At that point they calculate up your entire net worth and garnish 50% of that, and then they continue to tax you at the regular tax rate for an additional 7 years after you have already given up your citizenship. Any tax lawyers here who can verify if that is true or was that just a rumor I heard?
Here is what I found on Wikipedia anyways :
The HEART Act, passed on 17 June 2008, created the new Section 877A, which imposed a substantially different expatriation tax from that of the earlier Section 877.[6] Under the new expatriation tax law, effective for calendar year 2009, “covered expatriates”, i.e. those who have a net worth of $2 million, or 5 year average income tax liability exceeding $139,000, are treated as if they had liquidated all of their assets on the date prior to their expatriation. Under this provision, the taxpayer’s net gain is computed as if he or she had actually liquidated their assets. Net gain is the difference between the fair market value (theoretical selling price) and the taxpayer’s cost basis (actual purchase price). Once net gain is calculated, any net gain greater than $600,000 will be taxed as income in that calendar year. The tax applies whether or not an actual sale is made by the taxpayer, and whether or not the notional gains arise on assets in the taxpayer’s home country acquired before immigration to the United States. It is irrelevant that the gains may have partly arisen before the taxpayer moved to the U.S.
The new tax law also applies to deferred compensation ( 401(a), 403(b) plans, pension plans, stock options, etc.) of the expatriate. Traditional or regular IRAs are defined as specific tax deferred accounts rather than deferred compensation items. If the payer of the deferred compensation is a US citizen and the taxpayer expatriating has waived the right to a lower withholding rate[clarification needed], then the expatriate is charged a 30% withholding tax on their deferred compensation. If the expatriate does not meet the aforementioned criteria then the deferred compensation is taxed (as income) based on the present value of the deferred compensation.
Yuor argument assumes that money paid in taxes to the American government actually will go to “the next generation” or “help somebody else”. But what reason is there to believe that? Anyone can look at Federal discretionary spending and see that more than half of it goes to the military-industrial complex. If one believes that said complex does humanity more harm than good, then refusing to give tax money to the American government could be considered a good, unselfish act. Likewise among federal non-defense spending, a substantial amount is corporate welfare. Refusing to finance could welfare could be good for humanity rather than bad.
True, there are some federal programs that do help people in need. However, they make up a fairly small portion of the total. A person like Saverin could look at the situation and conclude that on the whole, giving money to the federal government is bad for humanity.
If Saverin thought the ways things were being run in America was so bad, why did he come here and stay here for so long? Singapore’s been there his whole life. He could have moved there on his 18th birthday.
I’ve no clue what Eduardo Saverin thought or thinks. I was merely offering a hypothetical explanation to stand against the argument that successful people have moral obligation to pay huge tax bills to help the less successful.
In any case, your question has an easy hypothetical answer. Suppose that more the period in the middle of his life, Saverin thought that the USA was the ideal place to live because of the opportunities it offered for workers, while at that time tax policy was a low priority for him because he made so little money. After he made a lot of money, tax policy became a much higher priority and he left the country as a result. That would explain his behavior.
I’m not a tax lawyer, but I’m familiar with the system. There’s been some form of expatriation tax ever since 1966 (26 USC 877). The way it used to work is that they’d tax you for 10 years on your U.S.-source income as if you were still a citizen. (I.e. you could not get the concessionary 0% capital gains tax rate that the U.S. normally gives to foreigners). It used to be that the 10-year tax only applied to people ruled to have tax avoidance intent and no other reason for giving up citizenship. Again, anyone who was truly wealthy could get around that easily: hire a tax lawyer to argue your case, get a fake marriage to a foreigner and claim you wanted to naturalise in their country (like a green-card marriage in reverse), etc. Captain Ahab didn’t catch any whales with that law; he just ended up with a bunch of minnows. So instead Congress switched to a plain old threshold system: if you have more than $2 million in worldwide assets, or $146,000 in tax liability, then you became subject to the tax. That switch was either in 1996 (after the Kenneth Dart scandal) or in 2004, I can’t remember offhand when.
In 2008 they also changed the way they charged the tax. It turned into the system we have now: capital gains tax (15% not 50%) of any unrealised gains of your worldwide assets (26 USC 877A), but no more 10-year tax. Basically they copied the Canadian system except they apply it when you lose citizenship rather than when you leave the country.
Oh, and there’s also provisions to tax any U.S. citizens on gifts they get from you in the future (26 USC 2801; basically it works like the estate tax, but applied beginning from $1 instead of $1 million or $5 million or whatever the threshold is in this phase of the moon).
I think it will be interesting to watch how fast this guy runs back to the United States when he encounters Singapore’s laws and legal system. As a nanny state the United States can’t even come close to Singapore in some areas.
You know, up until recently I’d have said that Saverin should pay a percentage of his income in taxes just like I do.
But this thread has exposed me to new ideas. I now realize there’s no reason I should pay taxes if I can get somebody else to pay my share. I should really be looking out for Number One.
So I now believe that the United States government should confiscate all of Eduardo Saverin’s assets. And then they should reduce my tax burden to zero.
Is that fair? Who cares? I came out ahead on the deal and that’s the important thing. If the government screwing over Eduardo Saverin helps me, then I’m all in favor of it.
…in case you didn’t know, millions of people move from one country to another every year. Saverin isn’t unique in that regard.
What is your opinion on those million other people that choose to live in other countries? At what age should they have moved? The US is the only country (apart from apparently North Korea) that taxes their citizens even though they don’t live in their borders: in simpler words they pay tax twice. Are you saying that every other country has got it wrong?
Why do you think he owes your country anything? One hundred and thirty thousand Mexicans immigrated to the US in 2010: is it your opinion that they owe a debt to Mexico and should be paying taxes to them as well as your government?
I don’t understand the “butt-hurt” entitlement attitude at all. He paid his taxes while he lived there, and for the last four years he’s paid his taxes while he didn’t. And he can either continue to pay taxes and continue to reap the benefits of US citizenship: or not. And he has chosen not to. Why is that anyone else’s business?
