Facebook co-founder Eduardo Saverin has angered two senators with his decision to renounce his U.S. citizenship -- the timing of which will allow him to avoid paying taxes on the IPO windfall.
Sens. Charles Schumer (D-N.Y.) and Bob Casey (D-Pa.) announced today they will host a news conference at 8 a.m. PT to unveil a plan to stop people from renouncing their U.S. citizenship to avoid paying taxes. In addition, the plan will describe a new law that would bar "individuals like Saverin from reentering the country."
Saverin came under fire earlier this week when it was revealed that he had renounced his U.S. citizenship. Saverin, who was born in Brazil, held an American citizenship for 10 years. He no longer works at Facebook and currently makes his home in Singapore, which has no capital gains tax.
Some have charged that Saverin renounced his U.S. citizenship so that he wouldn't be forced to pay capital gains or estate taxes on the more than $3 billion he's expected to own in Facebook shares when the company goes public tomorrow. However, Saverin himself stated that his decision had zero to do with taxes and everything to do with his view that he's a "global citizen."
"This had nothing to do with taxes," Saverin told The New York Times in a recent interview. "I was born in Brazil, I was an American citizen for about 10 years. I thought of myself as a global citizen."
Saverin also told the Times that he paid the U.S. a 15 percent exit tax, which is designed to hit wealthy individuals with a levy before they leave the country.
Still, Schumer and Casey aren't happy and, in today's statement, said that his "avoidance scheme" could cost the U.S. up to $67 million in tax revenue.