Facebook shares begin trading on Nasdaq today, Friday May 18, but it's the social network's lesser known co-founder Eduardo Saverin who has captured attention in political circles.
When it became known after a Bloomberg report that Saverin had renounced his U.S. citizenship shortly before the the IPO debut for which he is expected to become a billionaire, many called foul, suggesting he was trying to weasel his way out of U.S. taxes. His new country of choice, Singapore, does not have a capital gains tax, several media outlets pointed out.
Saverin, who was born in Brazil, but helped Mark Zuckerberg found Facebook while the pair attended Harvard, has issued a statement saying he has lived in Singapore since 2009 and that he will pay plenty of tax on his earnings to the U.S. government:
I have paid and will continue to pay any taxes due on everything I earned while a U.S. citizen. It is unfortunate that my personal choice has led to a public debate, based not on the facts, but entirely on speculation and misinformation."
msnbc's Ed Schultz isn't buying it. On his show this week, Schultz said the whole situation made his "blood boil," and called it "horribly un-American."
Yesterday, Democrat Sens. Bob Casey of Pennsylvania and Chuck Schumer of New York expressed disbelief over Saverin's actions and called for new legislation that would institute a 30% tax on any future capital gains for those who expatriate "for a substantial tax purpose." It would also prevent the individual from returning to the United States.
This instance is one more example of the need for tax reform in this country. Let's not forget the news that Mitt Romney, one of the richest men to ever run for president, paid an effective tax rate of 15% and has admitted to having money overseas in tax havens like the Cayman Islands.