As you may have heard, earlier this afternoon, Facebook priced its initial public offering at $38/share, valuing co-founder Eduardo Saverin's stake at approximately $2.9 billion. Since Saverin conveniently renounced his US citizenship last week, he will avoid paying millions in capital gains taxes and hang on to an estimated $67-$100 million that would have otherwise gone to the government, news that did not sit right with Chuck Schumer. Did the Senator from New York call the guy a "piece of shit miscreant"? No. Did he send him an email that included the line, "fuck with me and you will have a huge asshole"? No (not that we know of...). But Schumer was inspired to draft legislation aimed at tax-dodging ex-pats like Saverin and to let the kid know he makes him sick.
Democratic Sens. Chuck Schumer (N.Y.) and Bob Casey (Pa.), who called Saverin's decision "despicable," said the Facebook co-founder stands to save $67 to $100 million in taxes by renouncing his citizenship. "Senator Casey and I have a status update for him: pay your taxes in full," Schumer said at a press conference on Capitol Hill. Their so-called "Ex-PATRIOT Act" would impose a mandatory 30 percent tax on American investments for those who renounce their citizenship and would also prohibit individuals like Saverin from re-entering the country. The law -- which only applies to individuals with a net worth of over $2 million or an average income tax liability of at least $148,000 -- would not apply to non-American investments by former citizens.
Under the proposed legislation, the IRS would decide soon after an individual relinquishes his or her citizenship if the renouncement was motivated by tax avoidance. The individual would then have the opportunity to provide reasons for the renouncement, but there would be a "strong presumption" the move was for tax purposes. "Mr. Saverin has decided to 'defriend' the United States of America just to avoid paying his taxes," Schumer said, showing his familiarity with Facebook's lingo.