Facebook co-founder quits U.S. to avoid capital gains tax
I have written before about the Facebook IPO and the hoped-for CA tax windfall. I suggest that the projected state capital gains windfall is overblown, as many of the new millionaires and billionaires will move out of the state to avoid our November 13.3% millionaires' tax (which includes capital gains) -- or otherwise maneuver to avoid the tax (charitable remainder trusts are one superb option).
As I often say, "people are reluctant to leave a country, but they WILL leave a state."
But here's an interesting story about wealthy people who ARE willing to leave a country -- THIS country. It highlights one of the billionaire Facebook moguls who is renouncing his U.S. citizenship before the Facebook IPO goes through.
I doubt that any country has a higher capital gains tax than the 2013 proposed combined federal and California capital gains levy, which next year could exceed 40%, with no adjustment for inflation. BTW, if you consider the double taxation of our corporate income tax on dividends, next year we'll approach a 60% combined rate in CA, matched only by the crazy Italians -- where tax evasion is an honored national pastime.
CAUTION: Don't get too excited about leaving American to avoid our musrooming tax burden. This citizenship change does not work well for most wealthy Americans, as our country is one of the very few that charges an oppressive "exit tax." Normally one associates such confiscatory taxes with banana republics and communist countries, but this tax grab is happening in the good old U.S. of A.
Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO
(go to link for the full story)