Music to read by:
Don't tread on me!
Say, don't tread on me!
Say, don't tread on me!
"I freed a thousand slaves. I could have freed a thousand more if only they knew they were slaves."
- Harriet Tubman
Facebook on Thursday priced the IPO it expects to launch Friday at $38 a share, valuing the social media company at $104 billion. But so much for that welcome sign of confidence in American entrepreneurship and capital markets. This being the age of envy, the bigger story in some circles seems to be the decision by Facebook co-founder Eduardo Saverin to renounce his U.S. citizenship in favor of Singapore.
Democratic Senators Chuck Schumer and Bob Casey, a pair of envy specialists, pounced on the news by announcing Thursday that they will introduce a plan to tax capital gains at 30% for any wealthy Americans who try to escape from U.S. shores. No doubt they hope to score political points by punishing the fleeing rich who will strike most Americans as unpatriotic, but the Senators are doing far more harm than Mr. Saverin is to the U.S. and its global reputation.
Not that we have any sympathy for Mr. Saverin, whose citizenship decision is a remarkable act of ingratitude toward the country that welcomed him as a child from Brazil. America's rule of law and relatively open markets have allowed him to take $30,000 in savings and turn it into Facebook shares that after Friday may be worth more than $2 billion. For anyone who saw his portrayal in "The Social Network," his citizenship choice plays to sad type.
In a statement Thursday, Mr. Saverin denied that he is leaving the U.S. to avoid paying U.S. taxes. "I have paid and will continue to pay any taxes due on everything I earned while a U.S. citizen," he said, adding that he is "very grateful to the U.S." and that his decision to leave "was based solely on my interest in working and living in Singapore."
A punitive exit tax on the Facebook expat isn't worthy of America.
Perhaps he really has fallen in love with the humidity, the 12 hours of night and day year-round, and the lack of press freedom. But it's also true that Singapore has no capital gains tax, while President Obama wants to raise America's rate to nearly 24%—and 30% if his Buffett Rule becomes law. Then there is Mr. Obama's plan for a 44% dividend tax and 45% estate tax.
Whatever Mr. Saverin's motivation, the more important point is that it is his decision, however misguided. America was built on millions of similar individual decisions to come to our shores. It is precisely that ability to decide for oneself that has made America such a magnet for two centuries.
The way to continue to be a magnet for the best and brightest is not to impose Soviet-style exit taxes to punish people who want to leave the country. That is what oppressive and demagogic regimes do, and it's humiliating to see U.S. Senators posture in such fashion. The way to punish Mr. Saverin is to make the U.S. so appealing and dynamic again that he'll be sorry he ever left.
"I will merely note that for some people, their citizenship is worth everything they have to give."
- David French, The Corner, National Review
Nice words, but is that really true? Doesn’t your country owe you something in return? Were Germans, who opposed the Nazis, wrong for immigrating to the US and becoming citizens? Were Russians, who left the Soviet Union, wrong for defecting, renouncing their citizenship and becoming Americans?
If the Federal government decided to impose a 90% income tax on everyone, would you still believe that your citizenship is worth 9 out of every $10 you earn? Really? What else would you give at that point? Your wife, if El Presidente demanded her? Your firstborn son? Would you begin to kill your neighbours if your country demanded that of you? Better yet, were the Founding Fathers wrong for declaring their independence from England because of high taxation, taxation without representation, and the tyranny of King George III? Were they unpatriotic?
No, Saverin and people like him are renouncing their citizenship because being an American doesn’t have the same value as it did as little as a decade ago when I became one. The country has the most progressive income tax system in the world; yet, the 50% of the populace, who doesn’t pay a dime in Federal income taxes, believes it is entitled by right to the property of others. The dollar is on its way to being as valuable as an old Reichsmark. The national debt will enslave generations. Neither party is capable of or willing to address the real issues.
In addition to the most progressive income tax system, we also have the highest corporate tax rate and are increasing dividend and capital gain tax rates while expanding economies are cutting them. Further, the bureaucratic tangle of red tape answers the question “Where are the jobs?” They are overseas because the US government has created a hostile environment to job and business creation. It isn’t at the stage of Greece — where a stool sample is required of some people before they can obtain an operating licence to start an internet business — but it is rapidly following in the country’s footsteps.
The question shouldn’t be whether Saverin is a bad guy for renouncing his American citizenship. The question should be "Why has the US decided that it doesn’t want to keep people like Saverin and attract more of them?" Obviously, it doesn't want Saverins. If it did, it would make itself competitive.
Senators Schumer and Casey, among others, claim that people like Saverin are unpatriotic and they are probably correct, but how patriotic are they? Is it patriotic to debaunch the currency of your country? Is it patriotic to spend your country into bankruptcy? Is it patriotic -- and moral -- to enslave future generations to unsustainable debt obligations? Is it fair, patriotic, or moral to steal the futures of generations yet unborn while taxing them without representation?
Would Americans be unpatriotic if they wanted to insure that their children were not enslaved by the debt and unfunded obligations of their forebears by raising them as citizens of another country? Is that really selfish? How much do your future children and grandchildren owe the greedy, irresponsible people of today?
When I tell the Progressive Movement to "Fund Your Utopia Without Me™", I mean it. If the Progs want to recreate the French Revolution -- with or without the blood -- and they manage to be successful, in whole or in part, why do I owe the country anything? Why do you? Must we stay around and pay...and pay...and pay...and pay to satiate the envious cravings and most base desires of humanity?
California has 1/8th of the country's population, but 1/3rd of all of the country's welfare recipients. Is it doing anything to attract new business or relocations? No. It continues to pass higher taxes, fees, and more regulation, while giving more to union workers and welfare recipients. Businesses and the productive class are leaving. Why would anyone think that this would not happen on a national scale should Obama succeed in turning all of America into California?
Great civilisations do fall. Hopefully, the United States will not, but if it does, you do not have to go down with the ship.
BTW: I can't wait to hear the hypocritical screeching from Senator John Kerry, who parked his boat in another state to avoid paying Massachusetts state taxes.