Punishing expats

After a time, it became difficult for anyone to leave the Soviet Union or its captive states. Emigrants could be shot.

Initially, though, Lenin’s Bolsheviks were somewhat more sweet-tempered. For a few years after 1917, greedy capitalists who owned things were free to depart – just as long as they left all their stuff behind.

Back in the 1950s, progressives used to make fun of Americans who worried such doctrines eventually might be imported to these shores.

Tell that to Eduardo Saverin.

Mr. Saverin, who was born in Brazil and is a resident of Singapore, holds a 4 percent stake in Facebook, which could be worth about $3.84 billion. As the company went public last week, Mr. Saverin renounced his U.S. citizenship in hopes of reducing his tax burden.

Bloomberg News reports that Mr. Saverin won’t escape all U.S. taxes – he will still owe what is effectively an exit tax on the capital gains from Facebook’s stock holdings, even if it doesn’t sell the shares. But he will otherwise enjoy the benefits of the tax code of Singapore, a rock in the ocean that became fabulously wealthy in part because of its laissez-faire economic climate.

Bloomberg reports that a record 1,780 individuals gave up their U.S. passports last year, compared with 235 in 2008, many for tax purposes.

The Heritage Foundation’s 2012 Index of Economic Freedom shows that America’s tax burden now makes it less economically free than some other countries, putting it at a competitive disadvantage when it comes to hanging on to wealthy entrepreneurs, who can live wherever they want.

And it might get even worse beginning Jan. 1, when “Taxmageddon” – the largest tax hike in history – is scheduled to deliver any economic recovery into the nearest Dumpster. “Combine that with America’s growing debt and regulation, and you have a country where economic freedom is dwindling, especially when compared to countries like Singapore and Hong Kong,” writes Mike Brownfield of Heritage. “A billionaire like [Mr.] Saverin can afford to flee for greener pastures, but the rest of America isn’t so lucky.”

Mr. Saverin’s decision did not sit well with some inside the beltway. Sens. Charles Schumer, D-N.Y., and Bob Casey, D-Pa., have proposed a bill that would bar such people from ever returning to the United States again – while taxing them even more. ABC News reports: “The senators … will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.”

Reasonable people may disagree over Mr. Saverin’s decision. But this is a free country. Not allowing people to flee with their lives unless they leave behind all their stuff? Is this really befitting the American ideal?