Elon Musk, CEO of Tesla, stands on the development website of the Tesla Gigafactory. In Grünheide close to Berlin, September 3, 2020.
Patrick Pleul | image alliance | Getty Photographs
Elon Musk faces a hefty tax invoice this 12 months — presumably the most important in U.S. historical past.
“For these questioning, I’ll pay over $11 billion in taxes this 12 months,” the Tesla CEO tweeted on Monday.
That is near a CNBC estimate that Musk was set to pay a complete of $12 billion in taxes in 2021.
Musk has bought off $14 billion price of Tesla inventory since early November, after asking his followers in a Twitter ballot if he ought to promote 10% of his holdings. The response to that ballot was a convincing “sure.”
However it’s seemingly Musk would have begun promoting anyway. That is as a result of he faces a massive tax bill on Tesla inventory choices.
Inventory choices Musk was awarded in 2012 are set to run out in August subsequent 12 months. So as to train them, he has to pay revenue tax on the achieve.
Relatively than take a wage or money bonus, Musk’s wealth comes from inventory awards and positive factors in Tesla’s share worth.
Although Tesla shares have taken a tumble since Musk’s Twitter ballot, they continue to be extremely invaluable — the inventory is up 28% year-to-date.
When Musk needs money, he can merely borrow cash utilizing his firm’s inventory as collateral. Nonetheless, this apply has been criticized by some politicians as a tax loophole for the mega-rich.
Earlier this 12 months, ProPublica published an investigation exhibiting Musk and a number of other different billionaires paid no federal revenue taxes in 2018.
Between 2014 and 2018, Musk paid $455 million in taxes on $1.52 billion of revenue, in line with ProPublica, regardless of his wealth rising by $13.9 billion over that interval.
In line with Forbes, Musk is price over $244 billion on paper, making him the world’s richest man.
Musk may have waited till subsequent 12 months to pay the tax invoice, however that may have meant probably getting hit by increased tax charges underneath the Democrats’ Construct Again Higher invoice.
The Tesla and SpaceX chief has been sparring with distinguished Democrats on Twitter recently over the difficulty of tax avoidance.
Final week, he fired again at Senator Elizabeth Warren after she questioned Time Journal’s choice to call Musk its Individual of the 12 months, tweeting: “I’ll pay extra taxes than any American in historical past this 12 months.”
And if Musk does find yourself paying the large sum he mentioned he would, there’s an opportunity he may be right.