Community Corner
Will Leading the World In Corporate Taxes Hurt the US?
Facebook's co-founder Eduardo Saverin recently renounced his U.S. Citizenship, and in the process more than halved the $600 million he would have to pay if he sells his shares in Facebook after its IPO.
There are people who are saying good riddance to Facebook co-founder Eduardo Saverin for renouncing his citizenship. Who needs a rich guy who took advantage of a country and then skipped out without paying his fair share? But are the high taxes setting up the US for more of this in the future?
According to Fox News, the Brazilian immigrant, now turned US emigrant, could earn $3.84 billion if he sells his 4 percent share in Facebook. The Capital Gains tax on that would reportedly amount to $600 million for a US citizen. Saverin can’t escape the IRS entirely, and still has to pay exit taxes on his current net worth. But it is reportedly less than half of what he would have to pay on capital gains as a US citizen. He has reportedly taken citizenship in Singapore where there are no capital gains taxes at all.
According to the Huffington Post, on April 1 this year the US overtook Japan and became the country with the highest corporate tax rate in the developed world.
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So will this distinction hurt the country in the long run? With the rate set to go up again next year, is the country likely to see more people jumping ship and taking up citizenship in countries with more favorable tax rates?
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