The following is a guest post by reader Ross Thomas.

“Is the rich world aware of how four billion of the six billion live? If we were aware, we would want to help out, we’d want to get involved.” – Bill Gates

Dear Eduardo Saverin (if I may call you that),

You were, as I’m sure you’re aware, born in Brazil to a wealthy family, and were moved to Miami when you were a child. To America, the land of opportunity. And boy, did you ever have a lot of opportunities. Your parents sent you to Harvard, where according to Wikipedia you “took advantage of Brazil’s lax insider trading regulations and made $300,000 via strategic investments in the oil industry”. Well played! I bet that made your parents proud. In 2004 you were vaguely instrumental in setting up Facebook – a thriving startup which you helped turn into the world’s most overvalued company – and in 2009 you moved to Singapore. In 2011, just before Facebook’s IPO, you renounced your US citizenship, once again to exploit loopholes in international law for your own personal gain.

You are the worst kind of capitalist. You’re the kind of capitalist who shows up in a new country and sees only spoils to be pillaged, other people’s property to make your own. The opportunity you see is for yourself and yourself alone; you fail to realize that every opportunity comes with a cost. Your goal – as Marx observed of the obnoxious pseudo-capitalists of his own day – is to accumulate, accumulate, accumulate. But you don’t even have the chutzpah to stick around: you run away with your loot to a rather dull little tax haven in the South China Sea, sticking your former countrymen with your bills.

Real capitalists build nations. They understand they can only profit if society does too: that society enables them to profit in the first place by providing political stability, a system of finance for raising capital, security from our enemies, courts of law in which to settle disputes, roads on which to transport goods and workers, Internet links through which to channel data, and on and on. Real capitalists tend, nourish, and grow their communities so that they may reap an even greater harvest of profits next year, to everyone’s mutual benefit. You raided the vegetable garden.

You give capitalism a bad name, and I no longer wish to be associated with you or your company. Thus I have deactivated my Facebook account and switched to Google+. I hope your American customers understand that because of your oh-so-clever legal maneuverings you will be paying less tax on your billions, and they will have to make up the difference. And I hope next time you visit America you’re made to feel as welcome as you deserve.

You, Mr Saverin, are no Bill Gates.

Ross Thomas


This story is authored by a guest and its content is not necessarily endorsed by Pragmatic Capitalism nor are its views representative of other authors on this site.

More Posts


        • My letter wasn’t just about taxes. It was about giving back. You cannot seriously be equating Bill Gates and Warren Buffett with Eduardo Saverin. Are you really? You really think that’s going to stand up to the briefest of research into their histories and their writings and their philanthropy and their decades of service to America as true-blood capitalists?

          If you really want to go there, I’m game.

  1. “Real capitalist build nations.” Actully, real capitalists provide goods and services to their fellow man. Mixing capitalism and nationalism leads down a really scary path…

    • Where did I say “nationalism”? You’re introducing a straw man, which is highly irresponsible given that allergy season is coming up.

  2. cr said:

    saverin “took advantage of the advanced legal system” and helped build this company

    lol, r u kidding me?

    a legal system that is simply out of your way so a person can build a company is an “advanced” legal system? that he should pay for? as opposed to the “unadvanced” legal systems in the rest of the world that are so byzantine that nobody can do anything?
    you have to pay to keep the guv off your back?

    this would be funny if there weren’t people who actually believe and act on such stupid notions.

    you people are so nuts that it is beyond belief

  3. “as opposed to the ‘unadvanced’ legal systems in the rest of the world that are so byzantine that nobody can do anything?”

    What “rest of the world” are you talking about, specifically?

  4. Sometimes these discussions about “bad” Capitalism and “good” Capitalism remind of the way Communists used to argue about this or that deviation from whatever they thought Communism was supposed to be, a Communism which had, of course, never existed.

    At the risk of being branded a heretic: I wonder, might Saverin-ism just be yet another outgrowth of Capitalism, and a natural one, insofar as the incentives for Saverin appeared to have been built into this system by other self-interested parties? Where is is actually written that Golem-Sachism, Sorosism, or Greenspanism are ideologically corrupt and verboten?

  5. Huckleberry – Money is not everything. Seriously, it’s not.

    Saverin gained citizenship (which meant very little, apparently) and then renounced it for a tax advantage. No one was persecuting him, his extraordinary wealth would have stayed intact.

    I suppose international tax dodgers are something of an outgrowth of capitalism, but not as disgusting as Facebook’s $100 billion valuation. That’s capitalism at it’s ugliest. Or at least it will be.

  6. And yet you still use his services. The thing to do if you disagree is stop using his services. I did. Yes he made a financial decision over a moral decision. Schumer calling the kettle black was good for laughs.

    I do not agree with his decision but it is his to make.

    • If you read to the end of the letter you’ll notice I did actually deactivate my account.

  7. Let me get this straight….Eduardo was a US citizen for ten years. Made a lot of money. Paid the EXIT TAX for denouncing his citizenship. Paid more in tax than most Americans ever pay in their life and everybody is mad at him?

    I think he is a great citizen. Moving to the US at 13 meant that he probably consumed very little services. His parents paid taxes in the US while he was there. He is leaving before he becomes a burden on society. Imagine every American made a wack of money and left before they collected social security and medicade?

    Warren Buffett complies with the tax law to MINIMIZE the taxes he pays. How about an open letter to Warren asking him to take a salary higher than $1 and stop robbing the government.

    “I’m not a tax expert,” he said. “We complied with all the known laws. There was an exit tax.” That tax is based on the assets held by a citizen leaving America. The exit tax was designed to make sure the departing wealthy paid something before they decamped.”

    • “Warren Buffett complies with the tax law to MINIMIZE the taxes he pays.”

      Warren Buffett did not flee the country. He stayed and invested in great businesses, making his shareholders richer and employing lots and lots and lots of Americans.

      “I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty, of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the armed forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God.”

      Did Saverin “bear true faith and allegiance” to the Constitution and the laws of the United States, in your opinion? He may have had no “purpose of evasion” when he was naturalized, but that was then and this is now.

  8. The ROI America got with Eduardo is off the charts. Only if more citizens would contribute so much but consume so little.

  9. Bill Gates and Warren Buffett donated most of their wealth to charities to avoid paying taxes. What terrible citizens. Living in the US for longer than 10 years. Consuming services and then using the law to avoid paying higher taxes. Ross is an open letter to Bill Gates in the works demanding that he sell the shares of Microsoft he donated. Pay the cap gain tax on them and then use his money for charity?

    • “Ross is an open letter to Bill Gates in the works demanding that he sell the shares of Microsoft he donated. Pay the cap gain tax on them and then use his money for charity?”

      I don’t really understand your question. Bill Gates donated a huge amount of money to charity through his foundation. I would define that as “giving back to society”, wouldn’t you?

  10. Note to entrepreneurs…before you start a business make sure you renounce your US citizenship and incorporate the company in Vancouver, Canada. This way you can avoid being in the press for not wanting to pay a life time annuity to a country you may not live in.

  11. I find it hard to believe adults have Facebook accounts. Kind of pathetic if you ask me.

    I like Jim Chanos quote on why he does not have a facebook account “Well, I have a life, I don’t have a Facebook.”

    Facebook is all about living in the past. People’s status updates are solely intended to generate attention from those you do not see very often. I find the idea of so many people on Facebook quite pathetic. I never realized how insecure the world is.

    Then again I had 3 university degrees by the age of 21, so I am slightly different in my way of thinking.

  12. Yes. Move to a city with little in the way of significant economic activity except that which is housing- and China-related when the Canadian housing bubble is bursting, and property prices in Vancouver are down 10% yoy, sales down 30%, and when the Chinese economy is flatlining.

    That’s great advice, entrepreneurs! I’d go for it, if I were you.

    (And by the way, I already do live there.)

  13. So if Ross spends his money on charity his avoiding his US tax bill will be okay?

    • I do spend my money on charity (at least some of it), and I don’t avoid US taxes because I don’t pay them because I don’t live in the US and I’m not a US citizen. Apart from that, excellent question.

      • I meant if Eduardo spent his money on charity, avoiding the maximum US taxes would then be okay?

        That is what Buffett and Gates did.

        • But that’s not what he did. I’m talking about the Eduardo Saverin who actually exists in the real world, not some upstanding, admirable, philanthropic Eduardo Saverin in some alternative dimension.

          • Eduardo died today? Or he must have told you what he plans to do with that money.

            Gates and Buffett were never forced to sell early on. If Eduardo could have held on to his “unbooked” capital gains maybe he would not have given up his citizenship and then in the future donated it like Buffett and Gates to avoid paying taxes.

            I am not sure what the problem is. Eduardo paid $298 million in taxes to the US for the ten years he lived there. Only if all citizens were such cash cows.

            • “Or he must have told you what he plans to do with that money.”

              My point was he didn’t tell either of us what he’s going to do in the future. And even if he did, I’d be unlikely to believe him.

            • Saverin only avoids taxes if Facebook’s value increases. If the value of the his holdings decreased he would end up owning more than he would if he had deferred the sale of his shares.

              “So it’s not immediately apparent that Saverin has saved a great deal of tax by renouncing his US citizenship. He’s crystallised the tax bill on his current profits, has to pay that whatever happens in the future, and he’s only reducing his tax bill if Facebook shares increase. If they fall, his renunciation will in fact have increased his final bill, not reduced it.”

              • So basically Ross you are having a temper tantrum because ES only contributed $298 million in taxes instead of the possible $365 million in taxes.

                • If that’s your takeaway from my letter and comments in this thread then I have serious concerns about your reading comprehension.

                  • Ross,

                    You didn’t really respond to Drhotdog.

                    Do you believe that it may be possible that ES pays more in taxes due to renouncing his citizenship?

                    “I hope your American customers understand that because of your oh-so-clever legal maneuverings you will be paying less tax on your billions, and they will have to make up the difference.”

                    It doesn’t sound like you do.

                    • “Do you believe that it may be possible that ES pays more in taxes due to renouncing his citizenship?”

                      Yes. His exit tax was on unrealized capital gains he made when he renounced his citizenship. If the value of his shares rise then the subsequent capital gains will be tax-free. I believe that was his intention, and that’s why I don’t like it.

                    • Sorry, I meant to say “I don’t know if he’ll pay more, it depends on the share price going forward”. But his aim was to pay less. That much is clear to all but the most naive of observers.

  14. @Ross…I live in the British Properties in West Vancouver. I own 2 restaurants (one in West Van and one on Broadway). I sit on the board of three mining companies. My phone rings off the hook. I disagree there is no business activity going on.

    • People who think they’re richer than they are eat out a lot more than they should.

  15. You have the answer to everything. I wish I could offer you a high paying job, however you just told me to batten the hatches and prepare for the storm so I guess I will not be expanding. Too bad I could have used a know it all on my staff.

  16. What I do not understand is since the US controls its own currency, why does the Government collect taxes? Why wouldn’t they just issue currency that devalues the value of the USD by the percentage that the government wants to raise in taxes and give “refunds” to lower income people to offset their declining purchasing power.

    Wouldn’t printing money (inflation cost) be about the same as the collecting taxes + interest expense on issued bonds be about the same?

    • Well, taxes *increase* the value of the dollar (all else being equal) because it takes some out of circulation.

      But the main reason is that using inflation as a tax would be highly regressive: the marginal utility of each additional dollar is less with each dollar you already have. In other words, an inflation tax of (say) 10% would affect poor people to a much greater degree than rich people. Taxes are designed to redistribute income. This is a good thing in moderation, because it avoids situations like America finds herself in now vis a vis income inequality.

  17. If taxes are to redistribute wealth and inflation is regressive and harms the lower class, would it not be silly to have an economy that consists of both?

    If inflation is regressive does that mean the 2% (which devalues the purchasing power of your currency by 50% in 36 years) inflation target by the Fed is designed to benefit the 1% and harm the 99%. Is the Fed the source of inequality?

    • Yes, both is better. Taxes help avoid people living in tents in parks (as I saw in Seattle not so long ago) while bank CEO’s commute to work by helicopter (I’m looking at you, Dick Fuld). Inflation (*low*, consistent inflation) encourages spending and investment into higher-yielding assets. I would say that we need to massively reeducate the public on how to manage their money so that inflation isn’t such a concern for poor people (cf. Arab Spring).

  18. Just to let you know I rioted when my Canucks lost the Cup. I was owed more than what the team gave me.

  19. “Is the rich world aware of how four billion of the six billion live? If we were aware, we would want to help out, we’d want to get involved.”

    So why not to raise tax on rich American?

    • Why not indeed? Or at least on bankers. Taxes serve to redistribute income, which is necessary if you want a stable society.

  20. What is the standard of guilty-in-moral?

    If a rich people never do charity can we say he is guilty in moral?

    If your investment consultant help you make a lot of money and suddenly you find that he is rich but never do charity, will you terminate his consulting service?

  21. Apple(and a lot of other US company) does not wire back overseas profit to save tax money.

    Is Apple guilty in moral?
    Do you still want to buy/use Apple’s products?

    • I have a problem with tax avoidance in general. Saverin’s case was grotesque enough — renouncing his *citizenship*! That’s not something you play around with — that I felt compelled to vote with my wallet and close my Facebook account.

      I have principles, but I have my limits, just like everyone else. I’m not really sure what point you’re trying to make.

    • Well, when I was there it was dull. Nice and shiny with some cool architecture, but not very interesting. Maybe I went to the wrong places, or maybe you have to be a billionaire international playboy to fully appreciate its charms.