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Fled to Singapore: Not alone, either
Before Facebook went public last week, co-founder Eduardo Saverin gave up his U.S. citizenship and became a citizen of Singapore. The move saved him a reported $67 million in taxes. As youthful Facebook users might say, that’s, like, a lot of money, ‘n’ stuff.
Saverin, 30, orginally from Brazil, was ranked by Forbes magazine as one of the world’s 20 youngest billionaires. He is the sort of entrepreneur who should be at home in the United States. But he is not, and in that he is not alone.
The Wall Street Journal reported last week that the number of Americans becoming citizens of Singapore is small but rising rapidly. It increased from 58 in 2009 to 100 last year. It is rising because American taxes have risen relative to those in many other nations.
“In addition to lower corporate and personal income taxes, Singapore also has no capital-gains tax, no tax on bank interest and no dividends tax,” the Journal reported. The Heritage Foundation ranks Singapore 2nd on its Index of Economic Freedom. The United States ranks 10th.
“The U.S. used to be a moderate tax jurisdiction compared with other countries and it used to be at the forefront of development,” Lora Wilkinson, a senior tax consultant in Singapore, told the Journal. It is no longer. High tax rates and a complex tax code are sending the super-rich to friendlier jurisdictions overseas.
With those wealthy individuals goes not just tax revenue, but innovation, investment and jobs. When tax policy is written to punish the rich, the rich leave. They are not the ones who end up harmed. They live an even higher life in lower-tax places like Singapore. It’s the United States that suffers in the end from losing that talent.
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