Musk Expects to Pay $11B in Taxes to IRS

Election Campaign CDU - Laschet and Musk visit Tesla Factory, Grünheide, Brandenburg, Germany - 13 Aug 2021
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Elon Musk, the richest person on the planet and recently crowned Time Magazine’s Person of the Year, says he will pay a lot of taxes this year.

See: How Much Is Elon Musk Worth After Being Named Time’s Person of the Year?
Find: Musk, Zuckerberg and Other Execs are Selling Stock at Historic Rates – Should You Be Concerned?

“For those wondering, I will pay over $11 billion in taxes this year,” the Tesla CEO tweeted Sunday, Dec. 19.

Musk has sold billions in Tesla stock since his Twitter poll in November in which he asked his followers whether he should sell 10% of his Tesla shares. As GOBankingRates reported, Musk has a looming tax bill of more than $15 billion.

He was awarded options in 2012 as part of a compensation plan and because he doesn’t take a salary or cash bonus, his wealth comes from stock awards and the gains in Tesla’s share price. The options are set to expire in August next year. In order to exercise them, he has to pay income tax on the gain.

Though Tesla shares have taken a tumble since Musk’s Twitter poll, they remain incredibly valuable — the stock is up 28% year-to-date, CNBC reports.

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Earlier this year, ProPublica published an investigation 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 of income, according to ProPublica, despite his wealth growing by $13.9 billion over that period, CNBC reports.

Musk has been vocal about his taxes on Twitter, most recently fighting with Sen. Elizabeth Warren, calling her “Senator Karen,” after she tweeted on Dec. 14: “Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else.”

“And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year,” Musk tweeted back.

And in October, there was also the beef he took last with the chair of the Senate Finance Committee Sen. Ron Wyden’s plan for the Billionaires Income Tax.

“US national debt is ~$28,900 billion or ~$229k per taxpayer. Even taxing all “billionaires” at 100% would only make a small dent in that number, so obviously, the rest must come from the general public. This is basic math. Spending is the real problem. https://usdebtclock.org,” he said in a tweet at the time.

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“According to their own estimates, this tax only covers ~10% of the $3.5 trillion spending bill. Where will the other 90% come from? The answer is you,” Musk added. 

See: Musk Has a $15 Billion Tax Bill Coming Up: Is That Why He Did a Twitter Poll?
Find: Here’s How Ford, Tesla and These Other Major Car Brands Fared During a Very Tumultuous Year

Musk’s wealth stands at $243 billion, according to the Bloomberg Billionaires Index.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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