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May 13, 2012


Facebook co-founder Eduardo Saverin is surrendering his American citizenship

Facing the prospects of paying taxes on his estimated share of the Facebook IPO, Saverin decided it prudent to delete his name from the IRS roles. Saverin is expected to earn nearly $4 billion when Facebook goes public. 

Futhermore, Saverin will avoid paying future capital gains taxes by moving his citizenship to Singapore. Singapore does not tax capital gains. 

While the media is talking about Saverin, they are largely ignoring that fact that he is not alone in his escape from America. Famed billionaire investor Jim Rogers moved to Singapore in 2007. While Rogers retained his US citizenship, there were 1,780 other Americans who surrendered their citizenship last year alone. That's a record. Considering their primary reason for fleeing America is taxation, it would behoove Obama to rethink his strategy to soak the very rich. 

Only 235 Americans denounced their citizenship in 2008; the last year before Obama took office. 

The rich don't take kindly to getting soaked. Most have the smarts to watch their fortunes (that's how most of them became wealthy). They can be very creative in finding the means to preserve their capital. If moving abroad is required to avoid a soaking; it is no surprise that so many would exercise that option. 

Obama's efforts to soak the rich to appease his base is commended only by those who care to see the rich soaked and Obama's base appeased. Aside from that, running off thousands of highly productive Americans is insane.

• Movers, shakers and producers

The problem with socialists is their inability to employ abstract thinking. The Obama mind set is black and white, up and down; right and left. Such thinking doesn't lend itself to business success nor effective governance.

What Obama's socialists fail to comprehend is the contribution rich folks make to our economy other than direct taxation.  When Sam Walton pioneered WalMart, he not only created a retail chain. He created employment opportunities for tens of thousands of workers who pay taxes. When Mitt Romney's explored the Staples chain, he was crafting a national taxpaying machine. When Frank Vandersloot donated $1 million to Romney's campaign effort, Obama bristled. What the socialist failed to grasp is that Vandersloot's Melaleuca business generated millions in tax revenue.

The abstraction missed by socialist is this: When hundreds of America's job creators are compelled to leave to country to avoid taxation, they are also forced to withdraw their talents from creating tax-generating jobs that boost the economy.

• Unfair exchange

Obama's socialism also fails to grasp the folly of open borders.

While America's most talented tax creators are going offshore, they are being replaced by millions of tax consumers. Hordes cross the Rio Grande to bask in the light of Obama-style socialism where they learn from predecessors to game the system. Tax creators leave. Tax consumers come.

• 'Fessing up

The core problem with America's economy and government debt is not a lack of tax income from the super-rich. Rather, it's an epidemic of compulsive government spending and waste. For Obama to invoke the Buffet Rule is akin to Nero blaming Christians for burning Rome; or Carl Sagan blaming Christians for burning the library in Alexandria.

Obama's soak-the-rich strategy fails to shore up tax revenue. In fact, it accomplishes the opposite.

So why does he do it?

The single advantage of soaking the rich is that it generates a wealth of votes from naive and gullible Americans who are infected by the same mental malady that blocks abstract thinking.

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  1. I think you got it right. Freemarket capitalist economies create upward mobility, upward mobility means talented people can rise up to become future leaders. Those leaders are competition for power when they promote individual liberty and responsbility - so they kill two birds with one stone so to speak, increasing their dependant voters as you point out, which effectively strengthens their power hold, and they also eliminate some competition for power.

    The big risk and problem for the world is that independant self made liberty loving successful people can't keep finding safe havens forever. The world is going to run out of 'new world' opportunities sooner or later, it already is. The aristocracy also wants total world domination, so they want to make it impossible to hide, and then they want to force anyone that is strong enough to stand up for righteousness to join them. Its like they are constantly saying 'you can join us, you will have more power and riches than you can ever have... and if you don't join us, we are going to take what you have and make your life hell.'

    1. One more thought - its as if they use whatever form of motivation one will respond to. Maybe the lure of power or greed is not working, maybe you don't respond to threats, so they will just turn to something else... they will deceive you to try to convince you that liberty and personal responsibility are evil. I think people like Warren Buffet and a lot of celebrities fall into this trap, they are easily convinced that joining them and promoting their agenda is the most benevolent and loving thing they can do for society. The global warming alarmists have another good angle, help save the planet from those who want to destroy the planet - well who wants to destroy the planet? Nobody, but they want to convince people that if they don't support them, then that is exactly what they are doing.

  2. One thing you realize when you start making 7 figures and up is that you are very mobile in terms of where you can live.

    There are so many great places on this planet to reside, Singapore would be my first choice if I had to move to Asia.

    What is sad is that Mr. Severin came to the USA for a better life, a college education and a chance at the American dream only to be punished monetarily once he achieved all of the above.