Words by Shaiheim Allen
The CEO of Tesla & Space X has recently sold 10% of his shares in Tesla after asking his Twitter followers whether he should in order to pay his taxes. He has currently managed to sell around $5 billion worth of stock and he has still not sold close to the 10% of the stocks he owns of the electric vehicle company.
Musk is selling the stocks after criticism from politicians/elected officials as he does not pay taxes due to the fact he does not collect a wage from Tesla and is instead compensated in stock awards. He does not need to pay tax on these awards unless he sells the stocks, something he hasn’t done in a few years, he instead borrows a lot of money and uses his holdings as collateral.
Ron Wyden, a US senator from Oregon proposed a billionaire income tax, which would make billionaires pay taxes on ‘unrealised gains’ such as stocks and shares that they may hold. This pressure is what prompted Elon Musk to create the twitter poll, the final results read 58% yes and 42% no.
The world’s richest man is currently doing a big selloff and although he’ll have to pay over 50% in taxes, he’ll end up with billions worth of dollars in free cash, something that he normally does not have as he has claimed to be ‘cash poor’ before, as all of his money comes from borrowing as mentioned above.