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Once upon a time there was a young man who fled his homeland of Brazil because his life was in danger from kidnappers. Like so many before him, he came to the U.S., and in the safety of the freest country on earth, he got a superb education at Harvard, the opportunity to exercise his entrepreneurial zeal at Facebook—and the protections of the U.S. legal system to safeguard the fruits of his labor.
That man is Eduardo Saverin, 30, a founder of Facebook and someone who stands to be worth almost $3 billion when company shares are loosed on the world. He’s also someone who renounced his U.S. citizenship last fall in exchange for a passport from Singapore.
Singapore has much to commend it. Superb food. Clean streets. Lush plant life. And it doesn’t tax capital gains, whereas the U.S. takes a 15 percent cut.
It’s fair to ask if Saverin switched national allegiances to avoid taxes. His spokesperson demurs. And we take him at his word. But the timing of the news at least raises questions: Saverin’s renunciation came “around September” of last year, just when talk of a possible Facebook IPO was reaching a steady hum.
One can believe in free markets, open borders, and the need for goods and capital, human and otherwise, to flow across them with ease, and still feel mildly unsettled by Saverin’s decision—just as it’s discomfiting when U.S. corporations contort themselves to seek out overseas tax havens. A debt is owed to the country you call home, whether you were born here or arrived under duress. That debt is deepened if the freedoms your country afforded you helped create the conditions for your success.
Whatever you want to say about U.S. tax rates, they are “our” tax rates, the ones our balky democracy has put in place. And whatever you want to say about Mark Zuckerberg, Facebook’s boss, he made the choice to pay his taxes in California—his golden, struggling, adopted state, whose coffers he is sure to enrich.
It would have been nice if Saverin had made a similar choice. Since he didn’t, perhaps the best we can wish for him now is a longer than normal wait at U.S. Customs.
To read Noah Feldman on mainstreaming Mormonism and William D. Cohan on the lost luster of a Wall Street career, go to: Bloomberg.com/view.