Gee, Thanks, Tax Code: Facebook Co-Founder Renouncing U.S. Citizenship Before IPO

Erika Johnsen

5/11/2012 1:45:00 PM - Erika Johnsen

It would take a heck of a lot for me to even consider giving up my citizenship with America -- since it is most certainly The Greatest, Most Exceptional, Freest, and Just Downright Bad*ss Nation on Planet Earth -- but... the prospect of losing millions and millions of my well-earned dollars, might at least have me thinking twice about it. Bloomberg reports:

Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.

Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. …

“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement. …

Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, said Avi-Yonah. …

Renouncing citizenship is an option chosen by increasing numbers of Americans. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records.

Income-tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year, and rates on capital gains and dividends also are scheduled to rise unless Congress blocks the increases.

In the 2010 movie The Social Network, Saverin was the friend portrayed by Andrew Garfield who helped Zuckerberg start Facebook in their Harvard dorm and provided the early financing, and was then was rather unceremoniously pushed out. Whatever truth there was in the movie, there was definitely some contention over Saverin's ownership in Facebook, and he later settled for an undisclosed amount. But with Facebook getting ready for to price their IPO, he's about to get real rich, and it looks like he's jumping ship rather than messing around in America's disadvantageous tax code.

The upswing in the number of Americans renouncing their citizenship is yet another metric demonstrating the fatal conceit of President Obama's brand of policies. You can make millionaires and billionaires the butt end of your redistributionary, tax-hiking, class-warmongering rhetoric until the cows come home, but don't expect them to put up with it when there are greener pastures to be had. They'll pack up and leave, and they'll take their wealth with 'em -- and it's a damn shame for American opportunity and economic growth.