Elon Musk says he will pay more than $11 billion in taxes this year

Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory. In Grünheide near Berlin, September 3, 2020.

Patrick Pleul | image union | beautiful pictures

Elon Musk faces a hefty tax bill this year – possibly the largest in US history.

“For those wondering, I’ll pay more than $11 billion in taxes this year,” Tesla CEO tweeted in Monday.

Musk has been selling off $14 billion worth of Tesla stock since early November, after ask his followers in a Twitter poll if he should sell his 10% stake. The response was a resounding “yes”.

But it’s likely that Musk has started selling anyway. It was because he had to face a big tax bill on Tesla stock options.

The stock options Musk was awarded in 2012 will expire in August next year. To make them, he must pay income tax on the proceeds.

Instead of a salary or cash bonus, Musk’s wealth comes from stock awards and Tesla’s share price.

While Tesla shares have tumbled since Musk’s Twitter poll, they’re still incredibly valuable — the stock is up 28% so far.

When he wanted cash, Musk could simply borrow money using the company’s stock as collateral. However, this practice has been criticized by some politicians as tax loopholes for the rich.

Earlier this year, ProPublica announced an investigation shows that Musk and several other billionaires paid no federal income tax in 2018.

According to Forbes, Musk is worth more than $244 billion on paper, making him the second-richest person in the world.

Musk could wait until next year to pay his tax bill, but that means potentially hit by higher taxes under the Democrats’ Better Rebuild bill.

The Tesla and SpaceX CEO recently argued with prominent Democrats on Twitter about tax avoidance.

Last week, he fired Senator Elizabeth Warren after she questioned Time Magazine’s decision to pick Musk as Person of the Year with the tweet: “I would pay more taxes than any American in history this year.”

And if Musk ends up paying the huge amount of money he said he would, it’s likely he can be right. Elon Musk says he will pay more than $11 billion in taxes this year

Emma James

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