The people have spoken, and billionaire Tesla CEO Elon Musk has said he will abide by their wishes to sell 10% of his Tesla stock. Would the sale make a dent in the net worth of the richest man in the world? And would the taxes he pays make a difference in helping the government subsidize additional stimulus funds for lower and middle-income Americans, pay down the national debt, or otherwise help our nation’s infrastructure?
Just how much money are we talking about?
Let’s run the numbers.
As of today, Elon Musk – the wealthiest man in the world – has a net worth of $310.5 billion, according to Forbes’ update. A portion of this is held in Tesla stock. On Saturday, Musk, who is now going by the name “Lorde Edge” on Twitter, shared, “Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”
Currently, Musk holds 170.49 million shares of Tesla, a value of roughly $205 billion. If he sold 10% of those, he would off-load 17.049 million shares, for approximately $20 billion, assuming he sells when the share price is around $1,200.
Taxes on the capital gains for the stock would be around $5 billion according to Forbes, pointing out that his gain is “enormous.” Musk purchased shares for roughly 49 cents, according to the SEC filing for Tesla’s initial public offering. The shares split 5 for 1 since then, making Musk’s cost basis for his initial investment just under 10 cents a share, according to Forbes.
If Musk sells his shares now, before they continue to fall as they are trending down on Monday morning, he will shave $20 billion off his net worth, coming in at $298 billion. Of that $20 billion, he would keep $15 billion and the government would get $5 billion.
Musk’s new net worth would be $305.5 billion, and he would still be the richest person in the world. Rounding off, the government would still have $28.43 trillion in debt although if the tax money were used in other ways, it could pay for a portion of stimulus funds, the infrastructure bill, or other government programs.
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