Two Democratic U.S. senators are proposing a law targeting people like Facebook co-founder Eduardo Saverin and other wealthy people suspected of renouncing their American citizenship in order to avoid taxes.
Saverin gave up his citizenship in September, months ahead of Facebook's highly anticipated initial public offering that could make him a billionaire. His move has been widely speculated as his way to avoid paying hundreds of millions of dollars in taxes.
“It’s infuriating to see someone sell out the country that welcomed him and kept him safe, educated him and helped him become a billionaire,” said Sen. Chuck Schumer, D-NY, Thursday. “This is a great American success story gone horribly wrong. We plan to put a stop to this tax avoidance scheme.”
Schumer and Sen. Bob Casey, D-Pa., introduced the Ex-PATRIOT (Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy) Act Thursday. Under the act, an expatriate with a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for the purpose of avoiding taxes.
The Internal Revenue Service would investigate to see if there’s some other reason why the person renounced their citizenship. If none is found, the act would impose a 30 percent tax on the individual’s future investment gains, no matter where they live. In addition, expatriates who left the country to avoid taxes would be barred from returning to the U.S. for life.
Saverin, who was born in Brazil and later became a U.S. citizen, has denied the allegations that he gave up his passport and moved to Singapore to dodge taxes.
“I’m not a tax expert,” he told the New York Times. “We complied with all the known laws. There was an exit tax.”
Information compiled by KING 5’s Travis Pittman