This year, Elon Musk Says He Will Pay More Than $11 Billion in Taxes

Sufyan Maan, M.Eng

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Elon MuskSAMUEL CORUM/BLOOMBERG NEWS

Elon Musk, the world's richest man, has announced that he will pay over $11 billion in taxes this year.

Tesla Inc. CEO Elon Musk announced the news in a tweet on Sunday, without providing any other specifics. Mr. Musk stated on Twitter, "For those wondering, I will pay over $11 billion in taxes this year."

According to the Bloomberg Billionaires Index, Mr. Musk is the world's wealthiest individual, with a net worth of $243 billion. Tesla and Space Exploration Technologies Corp. holds the bulk of that money.

When he spent time with Sen. Elizabeth Warren, who called on billionaires to pay more taxes. Mr. Musk responded in a tweet, "And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year" Mr. Musk answered by stating that he will pay more taxes this year than any other American in history.

Mr. Musk is paid in stock options and does not take a salary from Tesla. Last month, he held a Twitter poll asking if he should sell 10% of his Tesla stock, which received overwhelming support.

He put the survey question in the backdrop of a raging debate over how the country's wealthiest people should be taxed. The next day, Tesla stock fell 3.5 percent, trading below $900 for the first time since October. The share is up for the year, but it has lost more than a 5th of its value since Mr. Musk's Twitter poll and subsequent stock sales.

According to a regulatory filing, he has until August 2022 to convert around 22.9 million vested stock options into shares or let them expire worthless. He'd need roughly $143 million to exercise those options, and if he did, he'd owe more than $9 billion in federal income and Medicare taxes.

Mr. Musk would very certainly face a significant state tax bill under California law, as exercised options are recognized as remuneration received in the state while he lived there. Even when Mr. Musk said in late 2020 that he had relocated to Texas, the California tax would very certainly be owed. The state of Texas does not impose individual income and capital gains taxes. He has also stated that Tesla's headquarters would be relocated from Silicon Valley to Austin, Texas.

According to a regulatory filing, he has until August 2022 to convert around 22.9 million vested stock options into shares or let them expire worthless. He'd need roughly $143 million to exercise those options, and if he did, he'd owe more than $9 billion in federal income and Medicare taxes.

Mr. Musk would very certainly face a significant state tax bill under California law, as exercised options are recognized as remuneration received in the state while he lived there.

Even when Mr. Musk said in late 2020 that he had relocated to Texas, the California tax would very certainly be owed. The state of Texas doesn't impose individual income or capital-gains taxes. He has also stated that Tesla's headquarters would be relocated from Silicon Valley to Austin, Texas.

Mr. Musk recently mocked a planned tax on unrealized capital gains by suggesting on Twitter that the government will ultimately "run out of other people's money and then they come for you."

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