Why Facebook co-founder Eduardo Saverin is a schmuck

In order to avoid paying taxes on his multi-billion dollar IPO windfall, Eduardo Saverin, co-founder of Facebook, is renouncing his United States citizenship.
Written by David Gewirtz, Senior Contributing Editor

Writing this article without profanity has been almost physically impossible. But we're a family site, here at ZDNet, so I'll just let you insert whatever invectives come to mind.

In this case, I'm talking about Eduardo Saverin, co-founder of Facebook, who -- in order to avoid paying taxes on his multi-billion dollar IPO windfall -- is renouncing his United States citizenship.

There's a truth about life that's often difficult to accept. Justice doesn't always happen. Some people, usually because of their great wealth, get away with doing reprehensible things. It's not fair, and it's not right, but it's what happens.

Case in point, the incredibly ungrateful S.O.B. by the name of Eduardo Saverin. Saverin is child of a wealthy Brazilian businessman. His father was well-enough off in Brazil that young Saverin, at age 13, was on a list of people targeted by Brazilian kidnap gangs, Pando Daily reports.

Seeking safety, Saverin's father moved the family to the United States. America was willing to take the young boy in, give him a safe home, a home away from kidnap gangs, a home with baseball and apple pie.

Eventually, Saverin wound up at Harvard. His time there wouldn't have been possible without the help of the United States, for Harvard has long been the beneficiary of not only U.S. dollars, but the best minds America has to offer. One such mind was that of Mark Zuckerberg, an American.

To make a long story short, Saverin teamed up with Zuckerberg and the Facebook venture was on its way. Facebook, of course, rolled out to U.S. colleges, nearly all of which were living to one degree or another, off U.S. tax dollars.

Twists and turns later, Saverin used the U.S. court system to sue for, and win, a disputed share of Facebook ownership.

And now, Saverin stands to make billions off an IPO on an American stock market.

If he stayed in America, he'd have to pay taxes on those billions. Sure, that's a lot of money, but it's not like he wouldn't still be left with a few billion after paying his due. So, it's not like he would be destitute and living in the streets. He might only be able to afford a hundred mansions instead of a hundred and fifty.

But no. Saverin's been planning this. He actually renounced his citizenship last fall, so his "exit taxes" would be lower, based on the then value of Facebook's pre-public stock, according to Bloomberg.

So, now to the question of justice. Just what has Saverin done wrong? He hasn't violated any laws (that we know of).

What he's done is played a system and gained tremendously for it. A case could be made that that's fair. One of the first things they teach you in B-school is to pay the least amount of taxes you can within the bounds of the law, and even the IRS accepts this as a reasonable strategy.

But going so far as to renounce the incredible gift of citizenship we gave to this man, and by doing so, saved him from kidnap gangs in his native country -- that's below reprehensible.

Justice would be to take away his stock benefits if he renounces his citizenship. Justice would be to block him from raking in all that cash if he's not willing to pay his fair share.

But justice doesn't work that way.

Instead, Saverin is running away to Singapore, a very small country with a very low crime rate. One of the reasons that Singapore has such a low crime rate is that it has a particularly brutal penal system, which not only incarcerates criminals, it subjects them to caning, a particularly brutal and painful punishment.

By not paying his fair share of taxes in the United States, he's essentially stealing from all of the rest of us taxpayers who supported his education and his business venture. If it weren't legal, it'd be a crime.

I have this simple message for Eduardo Saverin: you better walk the straight and narrow very carefully and follow every single law to the letter. Because if you don't, and there's any justice in this world, you will be subject to Singapore's justice system.

And, because you've renounced your American citizenship, no amount of crying will bring Uncle Sam running to your rescue this time, you money-grubbing schmuck.

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