By Ian Bush
WASHINGTON, D.C. (CBS) — Facebook is set to launch tomorrow what could be one of the largest-ever initial public stock offerings (see related story). It will make billionaires out of its founders, and some healthy revenue for Uncle Sam.
Now, a US senator from Pennsylvania wants to ensure no one skips out on their tax obligation.
Facebook co-founder Eduardo Saverin (right) renounced his US citizenship and now lives in Singapore.
Interesting timing, says US Sen. Bob Casey (D-Pa.):
“It’s clear to anyone that this is an insult to the American people.”
Not because Saverin stands to own a few billion dollars’ worth of Facebook shares, but because his new country happens not to have any capital gains tax. That amounts to a reported $67 million savings for Saverin.
“He seems to believe, I guess, that the rules don’t apply to him,” Casey said today.
Casey and fellow senator Chuck Schumer (D-NY) are behind legislation to prevent ultra-rich ex-patriates — those with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years — from ever stepping foot on US soil unless they prove to the IRS they weren’t residing abroad to dodge taxes.
There would also be a 30 percent penalty on their investments here.
“It’s an insult, and I hope with this legislation we send a clear and unambiguous message to people that you’re not going to get away with this if you try what Mr. Saverin tried,” says Casey.
Saverin has told the New York Times that his move “had nothing to do with taxes,” and that he considers himself “a global citizen.” He’s also said he paid a 15-percent exit tax to the US.
But Casey doesn’t buy it.
“We’ve got people in this country who make a lot of money who pay taxes,” the senator said. “We have people who have middle incomes who pay taxes. And we have a lot of other people who are struggling in a still-tough economy — out of work, they may have lost their home, job, or both. They’re trying to make ends meet, and this guy thinks he can just rip us off by engaging in this scheme — and that’s a good word for it.”
The senators estimate that 3,000 people have shredded their citizenship in the last ten years to keep from paying what’s due the IRS.