Elon Musk said that he will pay more than $11 billion in taxes this year. The world’s richest person shared the information via Twitter Sunday without adding any other detail.
‘I Will Pay Over $11 Billion In Taxes This Year’
The CEO of Tesla and SpaceX tweeted Sunday about his tax dues. “For those wondering, I will pay over $11 billion in taxes this year,” Musk posted.
Given his net worth of $243 billion as of Sunday, Musk is due for some heavy collection from the IRS. However, most of his wealth remains tied up in stocks from Tesla and SpaceX.
Last week, Musk received heavy fire from Senator Elizabeth Warren (D-MA). The progressive senator called on Musk to shell out more in taxes.
“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” she posted. She referred to Time Magazine’s decision to confer Muslk the “Person of the Year” award for 2021.
Musk Pays $11 Billion in Taxes, More Than Any American In History
Responding to Warren, Musk said that he is about to pay more taxes than any American in history this year. Then, the Sunday tweet where he said he’s paying $11 billion happened.
The billionaire is noted for his refusal to take on salary for his companies. Instead, he gets compensation via generous stock options that give him millions of shares of the company.
Last month, Musk launched an informal Twitter survey asking his followers whether he should sell 10% of his Tesla stock.
Users voted Yes, although many tax experts said that Musk planned to sell anyway. Otherwise, he will forego some expiring stock options that will need immediate payment.
Tesla Stock Rise and Fall As Musk Tweets His Stock Dilemmas
As a result of Musk’s Sunday tweet, Tesla shares dropped 3.5% the following day. The EV company’s stock closed below $900 for the first time since October.
However, Tesla stock remains one of the top gainers this year. Even so, Tesla lost more than 25% of its value since the ill-advised Twitter poll.
Next on his list are even more stock options. Due to Tesla’s positive performance, Musk is on track to receive 22.9 million vested stock options.
He will need to exercise these options by August 2022. Otherwise, these will become worthless. However, Musk will need about $143 million to pay for the exercise.
In the process, he could be on the hook for more than $9 billion in federal income and Medicare taxes.
Musk Faces State Taxes Under California Tax Laws
Under California law, Musk faces a sizable state tax burden because of his exercised options. These are treated as compensation in California, where he lived when the options happened.
Even as Musk moved to Texas late in 2020, the California laws would still apply. Unlike the Golden State, Texas does not collect individual income or capital gains taxes.
In addition to his personal move, Musk also said that Tesla’s headquarters will migrate from Silicon Valley to Austin, Texas.
The outspoken CEO is a known foil for proponents for taxing America’s wealthiest individuals. He previously ridiculed a proposal from Senator Ron Wyden (D-OR) to tax unrealized capital gains.
Musk took to Twitter to warn ordinary Americans that the government will come for them next. Once the government runs “out of other people’s money and then they come for you.”
Watch the Yahoo Finance video reporting that Tesla CEO Elon Musk says he will pay $11 billion in taxes this year:
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