Elon Musk says he will pay more than $ 11 billion in taxes this year
Tesla CEO Elon Musk stands at the Tesla Gigafactory construction site. In GrÃ¼nheide near Berlin, September 3, 2020.
Patrick Pleul | image alliance | Getty Images
Elon Musk faces a hefty tax bill this year, possibly the largest in US history.
“For those wondering, I will be paying over $ 11 billion in taxes this year,” said the CEO of Tesla. tweeted Monday.
That’s close to a CNBC estimate that Musk had to pay a total of $ 12 billion in taxes in 2021.
Musk has sold $ 14 billion of Tesla shares since early November, after asking his followers in a Twitter poll if he should sell 10% of his holdings. The response to this poll was a resounding âyesâ.
But it’s likely Musk would have started selling anyway. That’s because he’s facing a huge Tesla stock option tax bill.
Stock options granted to Musk in 2012 will expire in August of next year. To exercise them, he must pay income tax on the gain.
Rather than receiving a salary or a cash bonus, Musk’s wealth comes from stock awards and Tesla share price gains.
Although Tesla shares have fallen since Musk’s Twitter poll, they remain incredibly valuable – the stock is up 28% since the start of the year.
When Musk wants money, he can simply borrow money using his company’s shares as collateral. However, this practice has been criticized by some politicians as tax loophole for the mega-rich.
Earlier this year, ProPublica published a survey showing Musk and several other billionaires paid no federal income taxes in 2018.
Between 2014 and 2018, Musk paid $ 455 million in taxes on $ 1.52 billion in income, according to ProPublica, although his wealth increased by $ 13.9 billion during that time.
According to Forbes, Musk is worth more than $ 244 billion on paper, which makes him the richest man in the world.
Musk could have waited until next year to foot the tax bill, but that would have potentially meant being hit by higher tax rates as part of the Democratic Build Back Better bill.
The Tesla and SpaceX chief recently battled with prominent Democrats on Twitter over the issue of tax evasion.
Last week he hit back at Senator Elizabeth Warren after she questioned Time Magazine’s decision to name Musk her Personality of the Year, tweeting: “I’ll pay more taxes than any American in history this year. “
And if Musk ends up paying the huge sum that he said he would, there’s a chance he Maybe just.