Expatriation is no excuse for not paying taxes
As the impending election produces a debate over increasing taxes by three percentage points on the wealthiest 2 percent of Americans, some of that cohort isn't waiting around to see what happens.
Eduard Saverin, co-founder of Facebook, turned in his passport and headed for Singapore ahead of Facebook's initial public offer of stock, to save millions in potential tax payments.
Soon afterward, New York socialite Denise Rich renounced her citizenship, turned in her U.S. passport and headed for Austria, where she is a citizen. In a statement, a spokesman said she wanted to be closer to friends and family, but the move will save millions in tax payments, including on the sale of her $65 million apartment.
The pair were part of a wave of more than 1,800 people who formally have renounced their citizenship since the beginning of 2011, as reported quarterly in the Congressional Record. Much of the contagious expatriation is due to desire of those leaving to keep as much as possible of the tens or hundreds of millions of dollars they have made while living in the United States.
Well, fare thee well. May your riches be a blessing to the people of the Cook Islands, Nevis, the Cayman Islands, Singapore and other tax havens.
Congress is offended, and has been for some time. It passed a law in 2008 assessing substantial expatriation taxes on those leaving and made payment a condition of those folks ever entering the United States again. Since, then, in keeping with federal tax policy, the law has been shot full of loopholes to render it just about meaningless.
Lawmakers should plug those loopholes and strengthen the law to seize assets of those who don't pay the requisite expatriation tax on money they made in the United States.