Eduardo Saverin just gave America a lesson in the effects of the “Buffett rule” — even before it’s been passed.
Saverin co-founded Facebook with Mark Zuckerberg in 2004. Now the company’s preparing an initial public offering, and Saverin could reap billions by selling a chunk of his estimated 4 percent stake.
But he wants to keep as much of the proceeds as possible.
Which appears to be why Saverin just renounced his US citizenship.
“Eduardo recently found it more practical to become a resident of Singapore,” his New York-based spokesman said.
No doubt.
In America, he’d face a 15 percent capital-gains tax — on top of a 35 percent corporate tax — and President Obama wants to raise it further: Obama’s been pushing a 30 percent minimum on millionaires through his so-called Buffett rule.
In Singapore, by contrast, the capital-gains tax is only, well . . . zero.
Which means Saverin could save a bundle on all his future trades, as well.
No wonder he wants to become an Asian. (And who’s to blame him?)
Saverin may be the most dramatic example of Americans fleeing high US taxes, but he’s hardly the only one. Bloomberg reports that a record number of Americans — some 1,780 — discarded their US passports last year.
Most paid significant exit taxes on the way out the door — but it remains that the total represents a stunning 660 percent spike from the 235 Americans who renounced their citizenship in 2008.
Think the Buffett rule — or, perhaps, the scheduled 13 percent jump in the top US income-tax rate (from 35 percent to 39.6 percent) — might have something to do with this sudden scurry for the exits?
Heck, even some of the Buffett rule’s own supporters are drawing a line.
Like actor Will Smith.
“America has been fantastic to me,” he said recently. “I have no problem paying whatever I need to pay to keep my country growing.”
Smith was discussing plans by Socialist French President Francois Hollande to raise taxes on folks making more than 1 million Euros. He seemed fine with that.
But then he was told that Hollande’s planned tax rate would be 75 percent.
“Wow, that’s different,” Smith said. “God bless America.” Indeed.
The point is, some folks will flee for 75 percent, some for 30 percent and some for 15 percent — but the higher the number, the more who will flee.
Taking their money — and their job-creating investments — with them.
That’s the price of the Buffett rule.
So more power to Eduardo Saverin.