Yesterday ABC News reported the reaction from Senater Charles Schumer to Facebook co-founder Eduardo Saverin‘s statement that he is renouncing his American citizenship in order to avoid taxes on his Facebook profits. Mr. Saverin is a thirty-year old with an estimated net worth of about $2 billion and has lived in Singapore since 2009.
The article reports:
At a news conference this morning, Sens. Schumer and Bob Casey, D-Pa., will unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act to respond directly to Saverin’s move, which they dub a “scheme” that would “help him duck up to $67 million in taxes.”
The senators will call Saverin’s move an “outrage” and will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.
The plan would bar individuals like Saverin from ever reentering the United States again.
There are some basic problems with this proposal (other than the fact that it is strictly for show). The text of the Constitution, Article I, Section 9; Clause 3 is “No Bill of Attainder or ex post facto Law shall be passed”. Aside from the fact that this law is aimed at one specific person, Senator Schumer is making something illegal after it has been done and attempting to make a law retroactively apply to that action. There is no way that should happen under the Constitution.
Frankly, I don’t blame Mr. Saverin for renoucing his citizenship–he doesn’t live in America to begin with, and he wasn’t born here. Why should he let the U. S. Government take upwards of a third of the money he worked hard to earn? If Congress lowered taxes, more people would be willing to pay them instead of avoid them.