from the oops dept
The argument was that Saverin had allowed this country to help make him rich and now, in an evil move that was completely legal, he was going to evade paying the full taxes of an American citizen by no longer being one. To combat this unholy act, Schumer and Casey unveiled the oh-so-cleverly named EX-PATRIOT Act, which would levy heavy taxes on Saverin and anyone else who thought they could escape the virtous clutches of the American tax system.
"This is a great American success story gone horribly wrong," Schumer told reporters Thursday. "Eduardo Saverin wants to defriend the United States of America just to avoid paying taxes. We aren't going to let him get away with it."But, as fate would have it, Facebook's stock price dropped faster than a Righthaven lawsuit. And the result, according to Forbes, may be that Saverin paid more in taxation than he would have had he stayed in The States.
A couple of things got missed in the furore. The first was that he had to pay tax on his Facebook stock as if he sold it on the day of his citizenship renunciation. The value then was some $2.4 billion, leading to a $365 million tax bill. That tax bill is fixed of course: now that he’s no longer a citizen he doesn’t get any tax breaks or credits on losses he might make. Which of course he has done. Since he crystallised that tax bill his stock (assuming he’s still holding it and he would have been until just now because of the lock in around the IPO) has halved in value to about $1.2 billion. But he still owes that $365 million.
So, at least so far, the net effect of his renunciation has been to double his tax bill, not reduce it. Oh, and if he hasn’t paid the tax as yet then he has to pay interest to the IRS on it.And there we have it. Schumer and Casey drafted legislation, which didn't pass, to combat a guy who did something legal because they insisted it was unfair that he escape full taxation by renouncing his citizenship. It turns out that Saverin's renunciation caused him to be overtaxed by a rather substantial rate. Any takers on whether Schumer and Casey would be open to Saverin claiming relief from this overtaxation?