Dem senators introduce bill to punish Facebook co-founder Eduardo Saverin

Updated at 4:50 p.m. ET

(CBS News) Facebook co-founder Eduardo Saverin recently relinquished his U.S. citizenship just ahead of Facebook's massive initial public offering. But if Democratic Sen. Chuck Schumer has anything to do with it, as the senator said today, "Mr. Saverin's social network is about to get a lot smaller."

The 30-year-old entrepreneur, whose shares in Facebook are expected to be worth around $3 billion after the social network goes public on Friday, is now residing in Singapore. Conveniently, Singapore does not have capital gains taxes, so his move could save Saverin anywhere from $67 million to $100 million in U.S. taxes.

Presuming that Saverin moved to avoid paying taxes, Schumer and Democratic Sen. Bob Casey of Pennsylvania on Thursday unveiled legislation to stop what they called a "despicable trend."

Under their legislation, any American who renounces his or her citizenship for the purpose of avoiding taxes will be punished in two ways: They will be barred from re-entering the U.S., and their future investments in the U.S. will be taxed at a 30 percent rate.

Taking advantage of every Facebook one-liner available, Schumer said of Saverin, "Sen. Casey and I have a status update for him: Pay your taxes in full, or don't ever try to visit the U.S. again."

Saverin, who was born in Brazil, told the New York Times that his move had nothing to do with paying taxes.

Facebook co-founder Saverin may avoid $67 million in U.S. taxes
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Schumer said Saverin's claim "rings hollow." The senator said it was "outrageous" that Saverin would renounce the country that "kept him safe, educated him, and helped him become a billionaire." He called Saverin's story "an American success story gone horribly wrong."

Current law says that a person who renounces his U.S. citizenship for the purpose of avoiding taxes can be barred from re-entering the country, as Talking Points Memo pointed out this week, but Schumer said there have been problems enforcing the law.

Under Schumer and Casey's bill, if an American with a net worth of $2 million or a tax liability of $148,000 renounces his or her citizenship, the IRS will presume that person is moving in order to avoid paying taxes. The person in question will be responsible for proving otherwise.

If a former citizen wants to return to the U.S., Schumer said, he could pay all the taxes he owes in order to return.

Saverin later released a statement, Bloomberg reports, saying his decision to expatriate "was based solely on my interest in working and living in Singapore, where I have been since 2009."

"I am obligated to and will pay hundreds of millions of dollars in taxes to the United States government," he said.

[Whynotsteal]

Sounds like precisely the same tactics that socialists and communists the world around have always used. If you are competent and successful and therefore do not want to live in a repressive society, the socialists make you stay and pay. Their next step will be to make it illegal to criticize them. Before the end of Obama's second term, it will be a hate crime to say that Obamacare is a mistake.

[wj0312]

They're just pissed that he's getting away with paying less in taxes than they are.

[TimeToEvolve]

The Republicons must be confused over this one. They don't like any minorities but they like rich people. They don't seem to mind tax cheats so they must like this guy. And they pretend to be patriotic while this guy is a traitorous deserter so they must be angry. Way too much conflict for the shallow and compromised Republicon brain.

[TimeToEvolve]

Hopefully this will lead to them going after all the Top 1% American big corporate tax dodgers that are playing us taxpayer for fools. Cut our taxes and we'll create jobs. Yeah right. All giving them welfare does is give them more billions to buy the elections and the government.

What a twisted scam we are living here in America.

[TimeToEvolve]

Have you not realized that this is not left vs. right yet? That is what the 1% want: to divide us. This is a top vs. bottom issue. Of course the Republicons have bought into this hook line and sinker and there are a few decent Democrats who are not slaves to big business and their mouthpieces.

[wfw3536]

Did Chuck ever realize that maybe we shouldn't taxing everyone to death, or stop with the hundreds of new regulations. This is just the beginning, a good example of what will happen is California where businesses are running over each other to get out of the state because of taxes and new regulations that aren't needed. And the we have Obama whose head of his jobs counsel the head of GE and he brags about sending jobs overseas, or Obama tells us how great Apple Co is when they send most of their jobs overseas. These folks just do not get it.

[TJphoto]

they called a "despicable trend."??? What's despicable is a Congress that's for sale. A congress that will slip in a tax deduction for a small group for a "donation". They all deny it, but not one member will come forward to explain why credit card interest rates are set by them at 32%. BTW....Nice political stunt

[AOCGUY]

Since when does Congress enact legislation due to the perfectly legal actions of one person? Oh wait a minute we are talking about American Congresscritters aren't we. Got totell you come this November when I vote if there is the word "incumbant" next to a name he won't get my vote.

[gep1955]

These senators actually beleive they are kings and every whim must be addressed with more regulation and taxation on free citizens who have done nothing illeagal. Disgraceful.

[gekkobear]

HOW DARE HE!

Renouncing his citizenship over taxes?

Why no loyal citizen of this fair British Colony would ever do such a thing. We love high taxes, and we are founded on paying whatever taxes are asked of us.

GOD SAVE THE QUEEN!

So... who else is supporting the Tories in the upcoming Parliamentary election?

[alanrobisch]

political stunt par excellent. note people leave NJ routinely once they retire for low tax states. Is Mr Schumer going to do something about this? While I resent this man's actions. Once a star canadian hockey player refused to play for a Canadian team. Why? the high taxes in Canada. Wouldn't be surprised thats why beckham moved here. People who live near delaware go their to buy large ticket items. Why no sales taxes.