Selling shares is the only way for him to become taxable, says the founder of the electric car company. He wants to stick to the result of the investigation.
Tesla boss Elon Musk asked his Twitter followers if he should sell ten percent of his shares in the electric car maker. “There has been a lot of talk lately about unrealized gains as a means of tax evasion,” Musk wrote on Saturday night. “I therefore propose to sell ten percent of my Tesla shares.” The tweet contained a poll that gave “yes” and “no” answers and was to run for 24 hours. “I will stick to the results of this investigation no matter how it turns out,” Musk wrote. Since he does not receive any cash wages or bonuses, selling shares is the only way for him to become taxable.
Sunday morning, the poll collected more than 2.5 million votes. 56% of participants are in favor of a sale. Musk has 62.5 million followers on Twitter. The owner of companies like SpaceX and Neuralink held around 170.5 million Tesla shares as of June 30. According to calculations by the Reuters news agency, given the share price on Friday, selling around ten percent would bring in nearly $ 21 billion.
Analysts say Musk may have to sell a lot of the stock anyway to pay taxes on options that expire next year. Gains in share prices are taxed in the United States when the papers are sold and a profit is thus made. This is seen as one of the reasons why American companies like to buy back their own shares – and therefore support the price – instead of paying the money in the form of dividends. Critics complain that wealthy citizens can use it to build wealth without paying taxes.
During the tax reforms planned by President Joe Biden, talks are set to change that. A 23.8% “billionaire tax” on profits from securities, whether or not they have been realized through a sale, is being discussed in Congress. It would affect about 700 U.S. taxpayers who have assets over $ 1 billion or have $ 100 million in annual income for three consecutive years. The money thus collected is intended to help finance the social and climate reforms planned by Biden. Musk criticized the considerations.