Monday, 21 May 2012

American Hypocricy

So everybody is upset that Eduardo Saverin, who:
  • Was temporarily a US citizen
  • Living in Singapore
  • Paid hundreds of millions of dollars in an "exit tax"
  • Is Brazilian
  • And financed an American company (Facebook) with his Brazilian wealth
... and decided to give up his US citizenship.

People claim it's because he's trying to skip taxes, ignoring the fact that the situation is far, for more complicated than it appears on the surface.

However, I don't see too many people exhibiting righteous anger that multi-billionaire Mark Zuckerberg may never pay taxes again.

Now Boehner is talking about supporting the "expat tax" against people who give up their US citizenship. When the number of Americans renouncing their citizenship is hovering (worst case scenario) around 0.0006% percent, most of those Americans are middle-class (i.e., non-wealthy) and you can probably count on both hands the number of rich people who give up US citizenship, is this really the best use of the resources of the US government?

Know your meme, baby!
Of course it is! The US economy is falling to pieces, China is likely to become the global superpower, and the US can't get it up, so let's use a little class envy to distract the masses! Hell, 48% of America is now classified as poor, so there's an excellent chance that honesty isn't going to help any politician get elected. America has hit the iceberg and now they're rearranging the deck chairs (the US might pull out of this slump, so perhaps a Titanic comparison isn't appropriate, but I'm not sure I like what America is turning into).

Getting back to Saverin: does anyone remember the Universal Declaration of Human Rights that the US signed? Look at Article 15 (2): No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.

What? Been watching Fox News and deciding that's a little bit too hippy for you? Consider the Expatriation Act of 1868 (remember your history kids: many of our founding fathers were still alive, kicking, and churning out laws). The preamble to that Act reads:
The right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness.
Ooh! Take that, Boehner!

Well, not that he'll give a damn. After all, this isn't about setting sound policy. It's about flogging the polls for a few points. There is nothing rational about this. If we were rational, we would be crafting laws that don't allow mega-rich Americans to dodge taxes, not punish the one or two wealthy people who decide to trade in their citizenship.

Or you can read this interesting article by Peter Dunn, where he explains the issues in detail.

So whatever your feelings on this topic are, just remember that Saverin has done something completely legal, just as has Zuckerberg. We hate the former not because he may have legally avoided some taxes (he didn't, but we'll skip that for now), but because we think this Brazilian living in Singapore who helped found a US company with his Brazilian fortune is somehow a traitor. No one is going to give a damn about Zuckerberg not because he's following the law (so was Saverin), but because he doesn't appear to be spitting on the flag.

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