your calculation is completely off, and by the way, only one small aspect of equity prices is derived from forward expected earnings, you argue in the same way as if I claimed fx rates are determined through purchasing power parity, this may hold true in theory and over very long periods of times but certainly it does not even come close to current traded prices. The Government does not nor wants to charge anyone taxes for future earnings or taxable income. This is about income/assets generated/held in the past. Saverin already holds his shares for YEARS he conveniently abuses the system because the company has not IPOed yet. However, this does not deny the fact that he has built this wealth already over years and has not paid a penny in taxes (other than his ordinary income if he had any at Facebook) because the stocks were not valued as they were not priced until very recently. Come on dude, I do not like to pay more taxes than necessary in the same way than you or others do. But this smells badly like grey-zone tax evasion by using a loophole in the tax code which does not fairly assess non-traded shares which he has amassed in his years of work for Facebook. Let's stick to facts and not whether you like taxes or not, who does. You use streets, roads, services, you live and earn income in a country that protects your property but do not want to pay fair taxes? That is anything but fair. That is all I am saying.
"Fair" is a non-word. It means whatever the user wants it to mean and has no place in objective discourse. You clearly think it is "fair" to charge someone based on hypothetical future usage of a country's infrastructure, while I think it is "fair" to only charge up to the end-point of the usage. Also, if you look at whose argument is less self-interested, clearly it's mine. As a US citizen left behind after Saverin leaves, the fact that he is no longer paying US taxes has one of two impacts on me: either I am able to obtain fewer government services because of the decrease in government revenues or I will be forced to pay more for the government services I receive, if the level of services is maintained despite the loss of Saverin's tax revenue. Both of those outcomes are "bad" for me. So, I am arguing against what is allegedly a "good" outcome for me to defend a more general principle of freedom. The person in this debate who has the "moral high ground" is me because my argument is "against interest", i.e. if my position wins and Saverin doesn't have to pay any penalty, I suffer in some small way (granted, my "suffering" is diluted by the fact that there are millions of taxpayers, but, conversely, one can say the same about the penalty, which is that Saverin's tax revenue to the government even at the full size of the tax they want to levy on him, is a drop in the bucket for the government, so why are they so concerned). Any US citizen arguing for Saverin paying a penalty is arguing from a position of self-interest because for them, they would like to be able to consume government services at the same rate as today, but without paying more once Saverin's portion of national income tax revenue is no longer available to the government. Of course, self-interested parties are not always wrong in a debate, but they are presumed wrong in debate when moral principles like "fairness" are under consideration, at least in the history of Western philosophy. That is precisely why we use 3rd-parties, who are "disinterested", to resolve disputes. Anyway, as I said multiple times earlier in the thread, Saverin has already paid his taxes for prior years. In the US, the "breakeven point" at which someone pays as much in taxes as they get in government benefits, is around $130K/year in income. So, unless Saverin was making less than that, which seems highly unlikely, he's already paid in more in taxes than he's received in benefits. Even if he has not been making any income, he has already sold $250 million of his Facebook equity and paid taxes on that, which is probably about $50 million in taxes. I HIGHLY doubt that he's used $50 million in government services. And, no, the fact that he used the US court system to get back his share of Facebook doesn't mean that the government gets to claim that it gave him $50 million+ in services. The cost of his court case should be allocated just as if it were a court case involving $1. The judge and other court personnel didn't get paid more because his case involved a large sum of money. The court building didn't become more expensive to operate because the case involved a large sum of money. So, those are non-issues. Over the eons, the human brain has evolved into a highly effective rationalization machine, so I am not surprised to see many rationalizing their desire to grab a piece of Saverin's wealth. I have evolved beyond that, though, so I say let the guy go in peace.
Dude you do not get my point at all. Nobody talks about being taxed for future income earned. The topic is about a lax definition in the tax law. The issue is if Facebook already traded publicly and Saverin or others were granted stock options or paid in stock then the taxation issue would be very straightforward. However, in this case it is not because the stock was not valued before thus all the stocks that Saverin received were valued at zero or 0.01 thus in effect completely avoiding taxes that should have been paid on earned income. I am not blaming him for this but arguing that he suddenly owns stock worth 2.7 billion and never having paid taxes on those nor having to pay taxes on future sales proceeds is what causes the current debate. In effect he has NOT paid taxes for any income other than cash income or stocks he sold in a private deal. So, your argument that he has in any way paid the same dues that every American citizen pays for various "conveniences" that your country has to offer to its citizens in exchange for federal income tax is incorrect. I am not arguing with you whether Americans abroad should be taxed at US tax rates or not, nor am I arguing with you whether its good or bad to pay taxes in general, this is NOT THE POINT!!!
Writing in all caps is not persuasive. I didn't say anything about paying taxes in general, I said that even with the amount he's already paid, he's paid more in taxes than was ever required to provide any infrastructure necessary for him to help start Facebook. The guy's already done his "fair share". You can post until your fingers bleed (although I hope you don't) and you will not convince me otherwise because there is no substantive case for that conclusion. Anyway, the reason that "loophole" exists is to provide an incentive to take risks, some of which pan out and some of which don't. I see no need to demand an ex post facto payment just because this particular risk paid off. Do you think that no one ever noticed this "loophole" before? That seems pretty doubtful. Clearly, the loophole has a broader social value than the possibility that one guy might "get away" with something as a result of it. Again, rationalize all you want, but why can't you at least admit you are rationalizing? Have the courage to admit you are driven by a psychological, not a moral or ethical, need for this guy to pay his "fair share" as YOU see it, not as it is objectively. I know that admitting to your own psychological failings is not easy, but it is much more honest than what you are doing now.
These Geeks are getting over on everyone. If you don't like what they are doing with their holdings, don't use the site, don't buy FB shares and don't advertise on the site. This stock has a higher valuation than some of the strongest brands in the world that have been around for a lot longer than 8 years. These guys had a great idea that gained tons of traction. None of them are business men. I'm not saying Facebook is a house of cards, but this exuberance is unsustainable.
So everyone who has already paid 1,000,000 in taxes has done enough and should not pay anymore??? Sorry but you are stupid.
Would this be looked at any differently if he would have setup a llc in Singapore and transferred his shares in 2011 and not renounced his citizenship? So his funds and profits would be tax deferred until repatriated... if ever repatriated. Why aren't the politicians enacting legislation demanding US corps to pay 30% on all foreign deferred income? This one guy is but a penny on the road with multi national trucks driving by filled with c-notes. Have the govt tax apple 30% of the $70B in cash they hold overseas tax deferred. Oops.. that would end their gravy train and post political consulting opportunities.
If they have paid their $1M and now aren't going to be living here anymore, yes, they've most likely paid enough. What is stupid about the concept that people should more or less only pay for the cost of government services allocated on a per capita basis? If the government spent $300 million/year and there are 300 million citizens, each person's share works out to roughly $1/year. Now, obviously it's impossible to invoice everyone and there are some legitimate cases where some people's share can be subsidized by others, but, and here is my key point, $1/year is the fairest possible tax rate. Look at Table 1 on page 4 of this document. http://www.taxfoundation.org/files/sr172.pdf You will see that for someone making in the lowest decile of income, they pay $1,491 in tax, but the government spends $20,751 on them. What the f do you think the government does with all that money that gets sent to them? They provide "benefits" to citizens. Well, if you look at how the money gets spent, you can start to see which citizens benefit beyond the amount they pay in tax and which don't. Look at the 8th-9th decile. They pay $41,487 in tax and the government spends $31,852 on them. Why is it "fair" that they pay $10K more per year in tax than they get in benefits? Would you walk into a business and pay $10K more for the same thing than some other customer just because you make more money than he does? You'd be a fool to do so, beyond a certain point. Look at the 99-100% income strata. They pay $777,923 in tax per year and the government spends $255,201 on them per year. They pay over $500K/year more than they get in benefits. Other than the answer "because they can afford it", how is that fair. The problem with trying to make a point with most of the anti-Saverin crowd here is that you people seem to have almost zero grasp on the distribution of income tax revenue vs. the distribution of government benefits. If I had to guess, you probably subscribe to the idea that all the money that gets paid in income tax goes to benefit "the rich" at the expense of the "poor" and "middle class". The problem is that the data don't bear that out. The fact is that everyone making less than $106K/year (the 6th-7th income decile) gets back more in benefits than they pay in taxes. By the way, I don't take Table 1 as the gospel truth, but it is a starting point for a factual debate about taxes. You simply can't talk about tax burdens without also talking about government benefits. It's like a business talking about revenue without talking about costs. I don't know if you are stupid, but you certainly come across as ignorant. Since the two are fairly well correlated, maybe you are stupid. If you're not stupid, then maybe you'll understand this post.
Thats just the point- You must co exist not try to beat anyone. Will Dell beat HP, will Fedex beat UPS. They must co exists. FYI The network FB connect was disabled after FB went public. Couldn't sign in with the FB connect if you wanted to. As far as the ugly- This is the standard SOcial site template made by great designers to add simplicity also since you didn't log in you missed a lot. Next time you come by sign in and play the games and listen to the radio and also see all your feeds in one location then try the mobile app and then have a video conference and watch some Bloomberg television then log off and Go back to FB. I have one client who uses the site to PM his Girlfriend while at work. Meanwhile his wife is snooping around in his FB account... FB is a leader and deserves the respect as one. Hold on Zuck is on the line.
It is crazy. Present tax law strongly discriminates against US citizens. The US should tax everyone equally (foreign or domestic) and tax only those gains that occur in the US, or else eliminate the capital gains tax entirely and switch to a more sensible tax regime (carbon tax? graduated consumption tax?). What we have on the books now does nothing but cause wealth to flow directly out of the US into the hands of citizens and corporations of other countires.