Proposed legislation targets expatriates who make money in the United States without paying a fair tax load. The so-called “Ex-Patriot Act” would impose a 30% capital gains tax on expatriates on all future investment gains.
The proposal was triggered by the news that Eduardo Saverin, co-founder of Facebook, stands to save $100 million because he renounced his U.S. citizenship prior to Facebook’s initial public offering (IPO). Saverin has lived in Singapore since 2010, where there is no tax on capital gains.
Under the proposed law, a U.S. expatriate with a net worth of $2 million or more or an average income tax liability of at least $148,000 in the previous five years would forfeit citizenship, unless a reasonable explanation is provided.