Facebook Co-Founder Gives Up U.S. Citizenship • Hacker News Board

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#21

Post by _delirium » Fri, May 11, 2012, 5:29 PM UTC

DanielBMarkham wrote: post #4

laconian wrote: post #3

Some friends of mine are yelling "see? our tax code is pushing capital overseas!" My argument is, that with $4B at stake, even if we had a "reasonable" income tax, people like this would still seek out tax havens where the burden is even lower still.

So you agree with your friends that people act in their best interests, including changing citizenship, when it comes to taxes, you just disagree on the amount of money it would take?

I don't think it's true for the vast majority of people. Most Americans, including most wealthy Americans, are happy to be Americans, even if they aren't happy about everything in the US. Rejecting your home country for monetary reasons is a fairly drastic action, and only a very small number of people take it. I mean, you don't see Bill Gates moving to Monaco or anything. Not even very-rich people with libertarian politics, like Larry Ellison or the Koch brothers, are itchin' to leave the country.

In fact the number is even smaller than the raw number of renunciations. A spot-check at the list of renunciations suggests that most are actually people who in practice ceased to be Americans long ago, or in some cases never were. Some were born overseas to American parents and have never lived in the US; one actor on the list is of Italian origin and moved back to Italy 40 years ago; etc. Apart from a tiny handful of cases, it seems more like formalizing situations that already exist (people who aren't really Americans just making it formal). A number are also people applying for citizenships in countries that don't recognize dual citizenship, who are required to renounce their American citizenship to do so.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#22

Post by mcos » Fri, May 11, 2012, 5:29 PM UTC

wilfra wrote: post #10

He's going to regret this down the road. Yes taxing on Worldwide income is absurd but not more absurd than giving up your right to live in the US. There will come a day, probably not too far in the future, where being young and rich on a tiny island isn't fun anymore and he's going to want to do something with his life. He's going to be quite sad when doing it in the United States is no longer an option.

For the vast majority of the world's population, not being in the United States hasn't been a barrier to doing something with their lives.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#23

Post by waterlesscloud » Fri, May 11, 2012, 5:30 PM UTC

wilfra wrote: post #10

He's going to regret this down the road. Yes taxing on Worldwide income is absurd but not more absurd than giving up your right to live in the US. There will come a day, probably not too far in the future, where being young and rich on a tiny island isn't fun anymore and he's going to want to do something with his life. He's going to be quite sad when doing it in the United States is no longer an option.

Do you truly imagine this means he has to live on a tiny island? With billions of dollars?

The man could easily maintain homes in wonderful places around the world and do whatever he wants with his life in any of them.

He's not going to regret this for even a minute.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#24

Post by sp332 » Fri, May 11, 2012, 5:30 PM UTC

wilfra wrote: post #10

He's going to regret this down the road. Yes taxing on Worldwide income is absurd but not more absurd than giving up your right to live in the US. There will come a day, probably not too far in the future, where being young and rich on a tiny island isn't fun anymore and he's going to want to do something with his life. He's going to be quite sad when doing it in the United States is no longer an option.

Being rich in Singapore is not exactly limiting.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#25

Post by mahyarm » Fri, May 11, 2012, 5:31 PM UTC

planetguy wrote: post #9

US citizenship is a nasty trap from which it is extremely difficult to escape. The US is one of a very small number of countries which will happily tax its citizens on income earned overseas, thus causing them to pay double taxes on everything they earn. This has seriously bad consequences for US competitiveness, in particular: 1. It discourages competent foreign citizens from seeking US citizenship (a greencard is s…

A green card has similar problems, similar exit taxes and so on. Get a green card, move back to your home country, you still have that tax burden as long as you have that green card.

The USA is only one of two (other being Eritrea) countries that taxes non-resident citizens. On top of that Eritrea's expat tax is only a flat ~%2 and is a remote african dictatorship. The USA is the only country which exposes it's non-resident citizens to a full tax load and system.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#26

Post by igorgue » Fri, May 11, 2012, 5:32 PM UTC

I believe he would still keep is green card, I'm not sure though.

Also, if you worth more than 250K you can get in the US, and get a permanent resident visa (green card).

The only 'benefits' [1] of being an US citizen is, the social security money when you retire, and the right to vote.

With that being said, I'm about to start the process to become a citizen. I think everyone should do it if they can, since, you don't know what's gonna happen when we have an immigration hating president.

[1] Not sure if social security would have any funds when I, and Eduardo, retire. And, I don't think voting counts in this country.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#27

Post by jandrewrogers » Fri, May 11, 2012, 5:32 PM UTC

This has been a growing trend for a number of years. Changes in the US tax code, US laws, and the way the US government interacts with foreign banks has made increasingly difficult for US citizens, particularly those with assets, to live outside the US even if they are perfectly happy to pay taxes. Not only are foreign banks no longer willing to deal with Americans living abroad but in some cases complying with the aggressive US laws are in conflict with the laws where the people actually live. Naturally this is very frustrating to people who live overseas or who are married to citizens of other countries.

The way the US deals with taxes for Americans living overseas is gross overreach any way you look at it and the increasing difficulty of being compliant with US laws applied to people living outside the country is driving this. No other industrialized country treats citizens living outside its borders in this way and this reflects negatively on the US.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#28

Post by darrhiggs » Fri, May 11, 2012, 5:32 PM UTC

wilfra wrote: post #10

He's going to regret this down the road. Yes taxing on Worldwide income is absurd but not more absurd than giving up your right to live in the US. There will come a day, probably not too far in the future, where being young and rich on a tiny island isn't fun anymore and he's going to want to do something with his life. He's going to be quite sad when doing it in the United States is no longer an option.

Singapore in not an island.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#29

Post by cube13 » Fri, May 11, 2012, 5:34 PM UTC

planetguy wrote: post #9

US citizenship is a nasty trap from which it is extremely difficult to escape. The US is one of a very small number of countries which will happily tax its citizens on income earned overseas, thus causing them to pay double taxes on everything they earn. This has seriously bad consequences for US competitiveness, in particular: 1. It discourages competent foreign citizens from seeking US citizenship (a greencard is s…

>2. It discourages US workers from spending some of their careers overseas, thus reinforcing US cultural insularity and giving competitive disadvantages. Go to any interntional company's office in Singapore, Shanghai, Kuala Lumpur and note that it's filled with Brits, Australians, New Zealanders with very few Americans; this is why.

It's worth pointing out that Singapore and Malaysia are both British Commonwealth countries, which does make it much easier for the Brits, Aussies, and New Zealanders to move to and work at those locations. Shanghai was also one of the major trading ports(along with Hong Kong) for the British with China, so they also have a very long history with the British Empire.

Re: Facebook Co-Founder Gives Up U.S. Citizenship

#30

Post by fennecfoxen » Fri, May 11, 2012, 5:34 PM UTC

planetguy wrote: post #9

US citizenship is a nasty trap from which it is extremely difficult to escape. The US is one of a very small number of countries which will happily tax its citizens on income earned overseas, thus causing them to pay double taxes on everything they earn. This has seriously bad consequences for US competitiveness, in particular: 1. It discourages competent foreign citizens from seeking US citizenship (a greencard is s…

One key thing to note is that he's giving up citizenship before the IPO because he's going to be richer after the IPO and the US levies a tax on all your worldwide assets (not just your income) when you give up citizenship.

So if he ever wanted to move overseas to begin with (and avoid being taxed on the US while he lives overseas - a rather obnoxious system from all I hear), now's exactly the time to do it.