Sunday, May 20, 2012
We Don’t Get It?
So what has Chuckie’s panties in a bunch? Facebook co-founder Eduardo Saverin renounced his American citizenship and headed for a more tax-friendly environment just before Facebook’s public offering. I personally don’t much care for that myself. He came to America from Brazil looking for an education and opportunity, and got both in spades. But Schumer and fellow Democrat Bob Casey (D-Pennsylvania) show that they don’t understand cause and effect or even the doctrine of unintended consequences.
The gold dust twins Schumer and Casey got into high dudgeon over Saverin’s move, and decided he must be punished. They even had their P.R. team go into high gear to come up with a name for the hysterical legislation they’ve proposed. It’s the Ex-PATRIOT Act (Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy). Aw, gimme a break.
The Democrats have done a great job of driving business out of the country with destructive tax policies and regulation. President Barack Hussein Obama has punctuated the belief that America is just another choice among many nations by saying that American exceptionalism is jingoistic. After all, Brits and Greeks think their countries are exceptional too, says The One. So they have to explain to me why someone who doesn’t even claim native birth as part of his citizenship shouldn’t take the money and run. Saverin found a new country that was exceptional--in its ability to let him keep most of his own money.
The Act would directly punish Saverin and anyone like him with an expansion of a tax-penalty already contained in the thousands of pages of IRS rules and regulations. It comes close to a combination of ex post facto law and a bill of attainder, both of which are forbidden by the Constitution. Essentially, if the IRS (or Chuck Schumer) determines that someone has renounced his citizenship to avoid taxes, a stiff penalty would be imposed on the taxes already owed. No penalty of course, if the reason was a conversion to Islam or a newfound love for communist rule.
Schumer is miffed because Saverin would avoid paying the feds an initial sum of approximately $67 million in taxes. Even though Facebook was not the sensational IPO originally expected, it was still one of the biggest of all time, so I suspect Schumer may even be underestimating the tax. So here’s the real penalty Schumer wants to impose: A 30 percent additional capital gains tax on all future earnings made in the United States on all expatriates with either a net worth of more than $2 million or who have a tax liability of $148,000 over the previous five years. Note that this would be chump change for Saverin, so Schumer is proving he’s an equal opportunity socialist. The only thing more evil than the rich are the expatriate rich.
Schumer himself isn’t exactly poverty-stricken, but he isn’t even playing in the same ballpark as a Saverin. On the other hand, Schumer didn’t get what money he has by coming up with an innovative idea which ended up worth billions. Mostly, he just lives off the public trough.
And just in case Saverin or someone else who made the same decision had a change of heart, Schumer is planning to take care of that too. The bill provides that an expatriate who renounced his citizenship for tax purposes within the prior ten years would be barred from ever entering the United States again, even as a tourist tossing money around and stimulating local economies. Mr. Saverin, in the unlikely event you should have another brilliant money-machine idea like Facebook, don’t come back here flaunting your money. Build that wealth somewhere else. You’ve wounded our feelings, and we don’t want you back.
What a great man. Says Schumer: “We simply cannot allow the ultra-wealthy to write their own rules.” I guess that is Congress’s sole prerogative. He then inexplicably says that Saverin leaves the US taxpayers with the bill. What bill? Even after heading for more fertile pastures, Saverin and his corporation will still pay PLENTY of taxes. And then there’s the final Democratic mantra: “Renouncing citizenship to simply avoid paying your fair share is an insult to middle class Americans and we will not accept it.
Maybe if Schumer and the Democrats understood the results of their own business-crippling tax policies and learned what “fair” really means, people like Saverin wouldn’t be renouncing their citizenship in the first place. In the words of the 60s rock group Ten Years After “tax the rich, feed the poor, till there are no rich no more.” I’ll forgive the grammar because unlike Schumer, they understood that eating the rich will give you a case of permanent indigestion.