Facebook co-founder Eduardo Saverin becomes a billionaire today, and Chuck Schumer is seething.
Saverin, you see, objects to the staggering tax bills he would’ve incurred after today’s record-setting Facebook IPO – and so he decamped to Singapore and renounced his U.S. citizenship.
Which is rational, if impolitic. And which is his absolute right.
Now Schumer has the twitchies.
He’s co-sponsoring a bill that would permanently bar Saverin, among others, from re-entering the United States, while imposing punitive tax burdens on future investments in America.
“I have a status update for [Saverin],” Schumer declared yesterday, “Pay your taxes in full, or don’t ever try to visit the U.S. again.” Blah, blah, blah.
One needn’t sympathize with Saverin’s situation – he’ll be swimming in dough before sundown today – but it’s not inappropriate to be appalled by the message Schumer is sending.
First, it’s downright un-American to punish folks retroactively, no matter the offense. It may even be unconstitutional.
But the real problem with Schumer’s peevishness is that it ignores the basic problem: America’s globally uncompetitive tax structure.
Singapore has no capital-gains tax. America’s is one of the world’s most voracious – something that might not have made a difference a generation ago, but which makes no sense whatsoever in an age of international connectivity.
That is, high tax rates combined with high taxpayer mobility in the electronic age makes for a volatile mix.
Singapore is one nonstop jet flight away.
The Internet is infinitely faster.
Innovators don’t have to stick around just to be shaken down.