Irate over news that billionaire Facebook co-founder Eduardo Saverin is renouncing his U.S. citizenship to avoid paying millions in taxes, two Democratic senators have announced a plan to prevent these kinds of tax dodges in the future, according to ABC News. Sens. Charles Schumer (D-NY) and Bob Casey (D-PA) on Thursday unveiled the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act” or “Ex-PATRIOT Act,” under which U.S. citizens who leave the country to avoid taxes will face massive financial penalties should they decide to return.
Saverin, a native of Brazil, owns an estimated 4 percent of the wildly popular social network Facebook and stands to net close to $4 billion when the company goes public tomorrow, May 18. By renouncing his U.S. citizenship, Saverin will avoid paying close to $67 million in taxes.
Calling Saverin’s decision an “outrage,” Sens. Schumer and Casey outlined a plan that would “re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country” and “impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.”
It’s already illegal for Saverin to re-enter the country under current immigration law. According to immigration experts interviewed by TPM, “Sec. 212. [8 U.S.C. 1182] details general classes of aliens ineligible to gain entrance into the United States. And the law specifically references people in Saverin’s category.”
According to the law, “Former citizens who renounced citizenship to avoid taxation. Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable” from entrance to the U.S..
Saverin has relocated to Singapore, where no taxes are levied against capital gains.
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