There are five basic legal forms of business structures found in the United States: C corporations, S corporations, sole proprietorships, partnerships, and Limited Liability Companies (LLCs). In order to understand...
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- Is Eduardo Saverin Any Different From Rich New York Snowb...
Is Eduardo Saverin Any Different From Rich New York Snowbirds?
According to the IRS and the Tax Foundation's migration calculator, 612,520 people renounced their New York State citizenship and moved to Florida between 2000 and 2010. They took with them nearly $20 billion in adjusted gross income, after adjusting for inflation. During the same period, 208,784 Pennsylvania residents renounced their state citizenship and moved to Florida, taking $8 billion in income with them.
Many of these New York and Pennsylvania residents no doubt moved to Florida for the warm weather, but many more may have moved their because the state does not have an individual income tax, an estate tax, nor an inheritance tax.
As my colleague Joe Henchman blogged on last Friday, Senators Chuck Schumer (D-NY) and Bob Casey (D-PA) introduced the Ex-PATRIOT Act in reaction to one wealthy American citizen who suggested that he was doing on an international level what thousands of people do at the state level every year - move for tax reasons.
Although Eduardo Saverin, the Brazilian-born Facebook.com co-founder who plans to become a citizen of Singapore, now says that he will pay any U.S. taxes owed, this didn't stop House Speaker John Boehner from jumping on the Ex-PATRIOT Act bandwagon during an appearance on ABC's This Week. Boehner called Saverin's move for tax reasons "absolutely outrageous."
Yet, according to our migration calculator, Florida is the number one destination for Ohio citizens. Between 2000 and 2010, some 208,784 Ohioans renounced their citizenship and became residents of Florida, taking more than $8 billion of Ohio's tax base with them. Ironically, one of these tax avoiders was former Ohio Senator Howard Metzenbaum - a lifelong advocate of the estate tax.
The Schumeer/Casey bill would place a surtax on any U.S. citizen who left the country for tax reasons and bar then from reentering the U.S.
Would these lawmakers dare apply that same standard to the thousands of snowbirds who left their high-tax states for Florida's friendlier tax climate? Would they really tax granny's savings and hold her hostage unless she could prove that she had a legitimate reason for moving to Florida other than for tax reasons?
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