Now that Facebook stock is going public, May 18, 2012, the media is focusing on Mark Zuckerberg’s Facebook co-founder, Eduardo Saverin, 30, who renounced his U.S. citizenship in September 2011 in order to move to Singapore, according to his spokesman, Tom Goodman. Saverin along with a small number of other Harvard University students started the social networking site. Presently Saverin only owns about 4 percent of the company, according to the site, Who Owns Facebook?
On one hand, the public and media appears to be suggesting that Saverin is trying to dodge his taxes. But he already paid his exit taxes. If Saverin’s 4% stake in Facebook becomes worth $4 billion tomorrow when the company stock goes public, it seems the media may be eager to report how much money he’s made.
Check out the news article, Facebook’s Saverin May Save $67 Million on U.S. Tax Bill. In an interview, Saverin told the NY Times that his moving to Singapore had nothing to do with taxes. See the article, News: Facebook’s Eduardo Saverin Saves $67 Million in Tax by Leaving US.
Few people in the mainstream media are looking at the other side of the coin, that Saverin’s in Singapore to launch business ventures there. The media is accusing him of trying to avoid paying taxes by renouncing his US citizenship and moving to Singapore.
On the other hand, the NY Times clearly printed both sides of the story in an interview with Saverin, whereby he told the NY Times that moving to Singapore had nothing to do with taxes since Saverin sees himself, according to the NY Times interview as a global citizen. Saverin has other business interests in Singapore.
Two years ago in January 2011, Saverin filed to give up his US citizenship. By September 2011, the news became official. Saverin lived in America only 10 years. Eduardo Saverin moved to America from Brazil. According to news reports, at the time the 13-year old child sought asylum in the USA after he “was targeted for kidnapping by Brazilian gangs.”
Saverin is the “son of a wealthy business man,” according to the New York Times. The Harvard student became roomates with Mark Zuckerberg. What the media is concerned about now is that when Facebook stock goes public, if Saverin makes billions on his share of Facebook, will he pay his share of US taxes? Facebook is predicted to make around 96 billion dollars when it goes public on May 18, 2012.
Media in general usually covers the culture of the wealthy and famous because their lifestyles attract huge audiences and advertisers as people read or watch out of curiosity or vicarious imagery.
The opposite view in mainstream media is the big picture where media often focuses on the notion of the world’s financial elite in general avoiding paying their fair share of taxes, whereas the generic little person in general suffers from huge budget cuts in services.
In the media that focuses on how the “other half live”, sometimes the media emphasizes how “the little man” pays a larger share of taxes each year. In the slice of life stories of “the other half”, the media often depicts cities such as Sacramento, running out of cash, leaving that generic little person not being able to afford other options.
Features focus on those huge numbers often being out of work or having salary and hours cut, skills outsourced overseas where labor is cheaper, and the cost of necessities such as food and healthcare insurance premiums rising. These are realities in the media that most people experience on a daily basis, such as trying to reach the middle class.
More Americans have renounced their citizen in past years to avoid paying taxes
The more hidden details in the news focus on the fact that in 2012 more Americans have renounced their citizenship than in some past years to avoid paying taxes. Also wealthy Europeans sometimes move offshore to avoid paying taxes.
Money is hidden in overseas tax havens. On the other hand, some Americans who can’t afford healthcare expenses such as surgery, go overseas to have their operations performed in countries such as India, South Korea, or Columbia, a theme often presented in documentaries.
How the media uses the term “financial terrorism”
The media sometimes calls this phenomenon of money hidden away overseas in tax havens by the term, “financial terrorism.” The words refer to the ‘generic’ wealthy moving overseas, as the media refers to the money of the wealthy being stashed in specific types of overseas tax havens. But Saverin has written that he paid an exit tax on his Facebook stake and abided by the law regarding his money before he renounced his citizenship and left the USA.
Saverin complied with the laws and paid his exit tax based on assets any citizen held. The citizen pays the exit tax when leaving the USA. And Saverin paid that tax like any other person would when leaving the USA. The purpose for the exit tax in America is to make sure those wealthy people who leave the USA pay their exit tax before they leave.
Businessweek estimates that he could avoid paying up to $67 million in US federal income taxes by no longer being a US passport holder, according to the May 16, 2012 TechDiem.com news article, “Facebook co-founder Saverin: Renouncing US citizenship – “nothing to do with taxes.” Also check out the May 16, 2012 Bloomberg news article by Jesse Drucker, “Facebook’s Saverin May Save $67 Million on U.S. Tax Bill.”