Eduardo Saverin's plan to renounce his American citizenship to save millions in taxes is getting more complicated: a pair of lawmakers want to tax Saverin even if he flees to Singapore and then bar him from ever returning to the United States. In a press release on Thursday morning, Senators Chuck Schumer and Bob Casey called for changes in the tax laws. "The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country," the release said, adding that the plan "would also bar individuals like Saverin from reentering the country." That last part invokes a little known immigration law that prevents Americans who give up their citizenship for tax purposes from entering the U.S.
Taking a step back and looking at the situation, you can see why Schumer and Casey would be so upset. By renouncing his citizenship, Saverin is saving an estimated $67 million in capital gains taxes, and while he'll be expected to pay an exit tax, there's no deadline on when that has to happen. That's enough money to buy a small fleet of private jets, but regardless, Saverin denies any link between the eight-figure bill to Uncle Sam and his leaving the country. "This had nothing to do with taxes," he told The New York Times. "I was born in Brazil, I was an American citizen for about 10 years. I thought of myself as a global citizen." And it's not like he's doing charity work in Singapore either. Asked about his lifestyle, Saverin said he likes to keep things private, "It's a misperception, especially the playboy… I do have a Bentley. I do go out. I'd rather not go into personal details."
Update (2:05 p.m.): Schumer and Casey outlined the details of their "ex-patriot act" on Capitol Hill and didn't have many nice things to say about Saverin. "Mr. Saverin has decided to 'defriend' the United States of America just to avoid paying his taxes. We aren't going to let him get away with it so easily," said Mr. Schumer. "It's infuriating to see someone sell out the country that welcomed him and kept him safe, educated him and helped him become a billionaire." The proposed law would declare expatriate with a certain net worth (at least $2 million or an average income tax liability of at least $148,000 over the past five years) as having given up U.S. citizenship for tax purposes. As a result, the expat would have to pay a tax of 30 percent on future investment gains and would never be allowed to visit the U.S. again.