Elon Musk To Pay $11 Billion In Taxes

Tesla CEO Elon Musk has hit back hard against Democratic US Senator Elizabeth Warren who said Musk should pay taxes and stop “freeloading off everyone else,” after Time magazine named him “person of the year.”

On Sunday Musk revealed he will pay more taxes this year than anyone in American history, when he confirmed the eye watering size of his tax bill.

Musk said he will pay more than $11 billion in taxes after a recent share sell off, coupled with maturing Tesla stock options.

Tax bill

Musk has sold off $14 billion worth of Tesla stock since early November, after he asked Twitter users whether he should sell 10 percent of his shareholding in Tesla.

The poll said yes, he should sell the stock.

Musk then repeatedly sold tranches of shares so he could honour his Twitter promise.

But being a billionaire Musk has his critics, and social campaigner US Senator Elizabeth Warren was taken to task by Musk for a tweet that will not age well.

“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” tweeted Senator Warren, above a picture of a smiling Musk (after he was named Time’s Person of the Year.

Musk immediately responded by poking fun at the senator.

“You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason,” tweeted Musk.

“Please don’t call the manager on me, Senator Karen,” he added.

Before Musk said in another tweet.

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

“For those wondering, I will pay over $11 billion in taxes this year,” he then tweeted on Sunday.

Billionaires tax

Musk is the richest man in the world thanks to his shareholdings, and the recent share sale will help him pay the potential ‘billionaires tax’, as proposed by US Democrats.

US Democrats have proposed tackling the gap between the wealthiest Americans and everyone else by introducing a tax that the 700 billionaires in the US would pay on the annual increase in the value of stocks and shares they own.

Currently, tax is only due when gains are “realised”, which means the holder only pays when they sell the stock and book the profit.

Now that Musk has ‘realised’ some shares, it will result in him having to make a tax payment.

Between 2014 and 2018, Musk is estimated to have paid $455 million in taxes. But ProPublica published an investigation that showed Musk and several other billionaires paid no federal income taxes in 2018.

Musk is also liable for stock options he was awarded in 2012, which are set to expire in August next year. In order to exercise them, he has to pay income tax on the gain.

It makes sense for him to exercise them now, rather than waiting for the Democrats’ billionaires tax’.

It is estimated that thanks to his shareholdings in both Tesla and SpaceX, Elon Musk has a paper fortune of approximately $244bn.