Products You May Like
Elon Musk on Saturday asked millions of his Twitter followers to determine the future of a chunk of his Tesla holdings.
Responding to criticism that he’s avoided paying his fair share of taxes, the Tesla CEO asked users to decide whether or not he should hold or sell 10% of his stock.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” he said. Musk added a poll function, so users could vote “Yes” or “No.”
“I will abide by the results of this poll, whichever way it goes,” Musk, one of the world’s richest people, added. It wasn’t immediately clear what that proposed sale would amount to or what the tax rate would be. As of last December, Musk owned about 22.4% of the company’s shares outstanding, according to The Wall Street Journal.
Billionaires can benefit from tax-avoidance strategies not offered to people whose earnings come from conventional wage income. Extreme wealth is often largely based on the rising value of stock and real estate that is not considered taxable unless those assets are sold. That’s where the 10% unrealized gain comes in: If Musk sells, he’ll be taxed.
Earlier this summer, ProPublica, an investigative news site, reported on Musk’s tax bill as part of a massive analysis of billionaires’ finances. The outlet found that Musk’s income tax bill amounted to zero in 2018. Musk later shot back, saying the reporting was “tricky” and “misleading.” He added the number was so low because he does not draw a salary, so his cash compensation is close to zero.
“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,” he said on Saturday.