The number of expatriates of the United States increased six fold from 2008 through 2011. In 2008, only 231 individuals renounced their U.S. citizenship; in 2011, the same statistic measured 1,781 individuals. Many would argue that this is partially due to the tax atmosphere here in the states.
For example, Eduardo Saverin, co-founder of Facebook, renounced his U.S. citizenship shortly before Facebook’s initial public offering two months ago. Granted, Saverin was born in Brazil but had been a U.S. citizen since 1998 and decided to move to Singapore, not his homeland of Brazil. Interestingly, Singapore does not have a capital gain tax. The estimated tax that would have been due on Saverin’s shares of Facebook topped $67 million.
Partially in response to Saverin’s decision, several Senators introduced a bill titled the Ex-PATRIOT Act which imposes a prospective 30 percent capital gain tax on wealthy expatriates and otherwise bars the individual from ever reentering the United States.
The question becomes: will tax policies that are particularly punitive for wealthy individuals and families scare off the very families they are designed to tax?