Capital Flight : Renounce Citizenship

In the face of our country being brought to it's collective financial knees, the progressives liberal left Democrats among us are driving capital away faster then they can steal it from those of us that have to stay. Is this by accident or a purpose driven agenda?

You decide.

Facebook Cofounder Gives Up U.S. Citizenship before Company Goes Public
Source: Danielle Kucera, Sanat Vallikappen and Christine Harper, "Facebook Co-Founder Saverin Gives Up U.S. Citizenship before IPO," Bloomberg, May 11, 2012.

Eduardo Saverin, the billionaire cofounder of Facebook Inc., has renounced his U.S. citizenship. The move, which is almost certainly compelled by the company's upcoming initial public offering (IPO), places Saverin among a growing number of Americans who give up their passports each year, says Bloomberg.

In Saverin's case, giving up his citizenship is a sensible solution to a substantial tax liability.

•Because he already resides in Singapore and operates most of his current enterprises out of that country, Saverin will not want for a national home.
•Furthermore, Facebook's upcoming IPO, which values the social network at as much as $96 billion, will yield Saverin an enormous sum for his 4 percent stake in the company.
•By taking this action, Saverin will be able to substantially reduce his tax burden.

This is not to say that Saverin will avoid taxes entirely on his assets: Americans giving up their citizenship must pay an exit tax that essentially treats capital gains as if they are sold right then. However, by paying this tax before the IPO, Saverin will grant his financial advisers greater flexibility in valuing his assets and assessing his total tax burden.

In following this course of action, Saverin has become only the latest entrant into a pool of Americans all bent on reducing their tax outlays.

•A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records.
•A partial explanation for this increase is that income tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year.
•Furthermore, rates on capital gains and dividends also are scheduled to rise.

This strategy of renunciation, though seemingly extreme, has also been compelled by action on the part of the federal government. The Foreign Account Tax Compliance Act, known as FACTA, seeks to track gains made by Americans' assets abroad so that they can be taxed. Facing such limitations on traditional forms of tax evasion, these Americans elect instead to give up their citizenship entirely.