Elon Musk, the richest person in the world and CEO of electric car firm Tesla, has said he will pay more than $ 11 billion in taxes this year, which could represent a record amount of annual tax paid by one person.
Musk, who was accused earlier this year of paying no federal taxes in 2018 despite an estimated $ 243 billion , said he would foot the unusually high tax bill this year after the sale of millions of Tesla shares.
It comes after Senator Elizabeth Warren last week described Musk as “the richest picnic in the world.”
Musk has sold around $ 14 billion in Tesla shares since early November, when he asked his Twitter followers if he should sell 10% of his holdings. Almost 60% of his 67 million followers voted for him to sell the shares. Sales taxes are estimated to be between $ 11 billion and $ 12 billion.
The controversial entrepreneur probably should have started selling his 23% stake in Tesla regardless of the outcome of the vote, as he faced a huge tax bill on the stock options awarded to him in 2012 which were to expire in August 2022. To exercise the options, he is required to pay tax on the gain. Tesla shares have risen more than 20,000% in the past 10 years.
Musk’s tax payments have been a political lightning rod in the United States, because rather than receiving a salary or bonuses (which are taxed), the billionaire’s wealth comes from Tesla free stock awards and the increase in the company’s share price (income tax is only paid on capital gains when the shares are sold).
A ProPublica investigation earlier this year found that Musk paid an “effective tax rate” of 3.27% between 2014 and 2018, and no federal tax at all in 2018.
Warren, a progressive Democratic senator who has long campaigned for tax reforms to try to ensure the super-rich pay more taxes, last week questioned Time magazine’s decision to name Musk as his person. year.
“Let’s change the rigged tax code so that Person of the Year will pay taxes and stop picking on everyone,” she tweeted.
Musk replied, “If you opened your eyes for 2 seconds, you would realize that I would be paying more taxes than any American in history this year.”
Tesla shares have fallen about a quarter since Musk’s tweet about selling his shares. They fell another 3% on Monday. The company’s market value fell to just over $ 900 billion, down from the $ trillion valuation reached in October.
Analysts at investment bank Guggenheim Partners warned investors on Monday that production of electric vehicles could be below expectations, and said they feared the Tesla share price could be affected as more Competitors were entering the electric and autonomous vehicle (AV) market at lower prices.
“We believe that electric vehicle adoption may be below industry expectations, particularly in the United States due to a cheaper regulatory environment and limited product launches in key market segments,” Guggenheim analyst Ali Faghri said.
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