On outsourcing income taxes
The folly of levying punitive taxes on the rich has been nicely illustrated by the flight of Eduardo Saverin, who renounced his American citizenship to take up the privileges of a Singaporean passport. Among them: no capital gains tax!
Mr. Saverin was born in Brazil, brought up in Miami, and educated at Harvard, after which he co-founded Facebook with three others. He owns a four percent share of the company, which has been priced out at something close to four billion dollars. To minimize the tax bite when Facebook goes public, he became one of 1,781 Americans who renounced their citizenship last year (up from 281 in 2008). There are of course all sorts of reason one might take this step, but an obvious reason--and certainly Mr. Saverin's--is to avoid falling off the tax cliff facing us on January 1, 2012. The merely affluent are leaving the likes of California for the likes of Texas. The very rich are leaving the United States altogether. But hey! tax fairness is the important thing, right? Blue skies! -- Dan Ford