May 15, 2012
What America Owes Eduardo Saverin
Eduardo Saverin’s decision to renounce his U.S. citizenship, presumably to avoid a few billion dollars in taxes, has Internet moralizers gnashing their teeth.
Saverin, a co-founder of Facebook, could expect to send Uncle Sam an awfully large chunk of his Facebook IPO earnings–that is, if he’d decided to stick around. The result of his leaving, aside from less money for foreign wars, bank bailouts, and farm subsidies, is articles like this one on Pando Daily, headlined “What Eduardo Saverin Owes America (Hint: Nearly Everything).” Condemning Saverin’s decision, the author asks,
Is this fair? No. It’s worse than that, though. It’s ungrateful and it’s indecent. Saverin’s decision to decamp the U.S. suggests he’s got no idea how much America has helped him out.
The author goes on to “list all the ways Eduardo Saverin has benefitted from America,” including the safe life he lived in Miami compared to his native Brazil, the fact that he met Mark Zuckerberg in America, his education at Harvard, and “the American government’s creation of the Internet.”
It’s Elizabeth Warren’s “nobody in this country who got rich on his own” speech all over again. I’ve written several posts on her remarks. Here’s one on whether benefiting from the state creates obligations to repay those benefits. Here’s another on whether a duty to pay for those benefits necessarily means a duty to pay taxes.
In Saverin’s case, the same rejoinders apply: Why should “paying taxes” be the only or even best way to discharge any debt Saverin might have to America? And what about America’s debt to him?
Because it’s not like Saverin did nothing to earn his billions. They didn’t fall out of the sky onto his head, at which point he gathered them up, stuffed them in his pockets, and said, “Screw all of you.”
No, Saverin got rich by creating immeasurable value for Americans (and billions others around the globe). He co-founded an enormously successful company, one that in turn lead to the creation of many other enormously successful companies. All of those business employ thousands of Americans, who not only are more prosperous than they probably would’ve been without Facebook, but also pay taxes on all their earnings. So even without its cut of Saverin’s IPO windfall, Uncle Sam comes out ahead, as do all those American workers.
The rest of us gain, too, because we get to have Facebook. Which is cool enough that most of us spend far more time on it than we’d like to admit. Facebook made America (and the world) better.
Which means that instead of raging at Saverin for not wanting to give the bloated federal government in Washington more-more-more of his wealth, maybe we should just call it even.
Here’s my follow-up post expanding on these ideas and further making the case that a “debt to America” does not mean the same thing as a “duty to pay taxes.”