Elon Musk, the world’s richest person, recently bragged aboutThis year’s tax bill is historic at $11 billion. However, the tax obligation is due to the large and complicated stock sales of the past months. He will almost certainly profit from these stock sales.
Musk was interviewed earlier this month. boasted on TwitterHe will owe most taxes of any individual in a single yearHe is, however, also one of the most wealthy people in history. But when the conditions surrounding Musk’s tax bill are detailed, his true intentions become clearer.
As part of his compensation as CEO at Tesla, Musk was granted the option to purchase future stock at their 2012 value regardless of their current market value. This allowed Musk, who doesn’t receive a traditional salary from Tesla, to purchase millions of sharesThe November transaction set off a chain of similar transactions that continued for the next few weeks. He bought the shares for $13.4million in November, despite them being valued at $2.3billion.
Next year will see the expiration of the option to buy these shares for this price. The Build Back Better Act could also be passed, if passed. levy further taxesOn the transaction if it were to be delayed until 2022, making trades strategically timed.
Musk has made similar transactions since then, which are subject to income tax. They are subjected to a 15% tax bracket. 40.8 percent tax rate. According to tax experts, these transactions account for the bulk of his $11 million tax bill.
He won’t have to reach too far into his bank account to pay these taxes; Musk also sold millions of stock sharesIn order to help cover the tax liabilities, he has far sold about $16 billion worth of stock that could go towards covering taxes, though it’s unclear to what extent. Musk is also selling these stocks. set to receive even moreBased on the company’s end-of-year performance, there will be compensation.
The hundred-billionaire’s tax bill, thus, is a product of a maneuver to further pad his towering $280 billion net worth. It is only 3.9 percent of his net wealth, which could increase with further stock transactions. It is also a small fraction of his net worth. Record $36 Billion he made in just one dayOctober
Unless Musk continues to make further large stock transactions in the coming years, it’s also likely to be an outlier for him. However media outlets are gushing about the tax bill and publishing unqualified headlines on the matter, Musk typically makes these moves to avoid paying taxes, which would explain why he’s bragging about this year’s bill.
Tax documents leaked obtained by ProPublicaMusk had paid $0 in federal income tax in 2018 according to earlier research. Between 2014 and 2018, Musk’s “true” federal income tax rate was a mere 3.3 percent – lower than the average middle-income family’sEach year, tax rate
At the end of 2018, the wealth of the 25 wealthiest Americans was $1.1 trillion. This is more than the combined wealth from 14.3M ordinary wage-earners.
The 2018 personal federal tax bill to the 25 wealthiest: $1.9 billion
The bill for wage earners is $143 billion.https://t.co/1mPwh3ZYXa
— ProPublica (@propublica) December 29, 2021