New York Democratic Sen. Chuck Schumer, silent about the Senate’s inability to pass a budget after three years, is working overtime to pass a bill targeting Facebook co-founder Eduardo Saverin.
Bloomberg reported on May 11 that Saverin, who continues to invest in technology startups as a resident of Singapore, had renounced his U.S. citizenship prior to Facebook’s long-anticipated IPO Friday.
Speculation emerged over whether Saverin’s decision was due to the lack of a capital gains tax in Singapore, which could save him hundreds of millions of dollars by shedding the burdens of the U.S. tax code before Facebook goes public.
Schumer, along with Pennsylvania Democratic Sen. Bob Casey, accused Saverin on Thursday of playing a citizenship tax-dodge game despite Saverin’s statement to the New York Times claiming otherwise.
“This had nothing to do with taxes,” Saverin told the Times on Wednesday. “I was born in Brazil, I was an American citizen for about 10 years. I thought of myself as a global citizen.”
Schumer’s office did not respond to The Daily Caller’s request for comment about why the senator is attacking job creators like Saverin instead of working to pass a federal budget, and whether his bill is a “scheme” to distract Americans from the Senate’s budget failures.
Based on government records, Bloomberg News estimates that 1,780 Americans returned their U.S. passports to become permanent expatriates in 2011, a 757 percent increase from the 235 who registered in 2008. In its 2011 annual report to Congress, the Office of the Taxpayer Advocate — an independent agency within the Internal Revenue Service — said this was due to the increasingly complex U.S. tax code.
Under Schumer’s proposal, he and Casey said Thursday, “any expatriate with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for tax avoidance purposes.”
If their bill becomes law, IRS will levy a 30 percent capital gains tax against expatriates who meet this criteria. They would not be allowed back into the U.S. while those taxes remain unpaid.
“We plan to put a stop to this tax avoidance scheme,” they said. “There should be no financial gain from renouncing your country.”
“Mr. Saverin has benefited greatly from being a citizen of the United States but he has chosen to cast it aside and leave U.S. taxpayers with the bill,” Casey added in a statement.
The Center for Responsive Politics reported that Schumer had an estimated net worth of between $472,019 and $1,230,000 in 2010. Casey’s reported net worth is estimated to have been between $159,019 and $563,000 during that same period.
