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The ethical aspects of paying taxes remain among those that many calls into question for billionaires like Elon Musk.
Elon Musk, the richest man alive and the Chief Executive Officer of American electric vehicle company, Tesla Inc (NASDAQ: TSLA) said in a recent tweet that he is going to pay $11 billion in taxes this year. Musk’s declaration came after a series of spats with democrat lawmakers, particularly Senator Elizabeth Warren who commented on Musk’s recognition by TIME Magazine as the Person of the Year.
“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” the Senator said in a tweet.
There has been quite a lot of controversy about the tax obligations of the American ultra-rich. Back in June this year, Coinspeaker reported on a ProPublica claim that the richest men in the US do not pay taxes in correlation with the income they make. The ProPublica report specifically focused on the likes of Elon Musk, Jeff Bezos, Warren Buffett, Michael Bloomberg, George Soros, and Carl Icahn amongst others.
In the case of Elon Musk, the report claimed Musk only paid $455 million in taxes on $1.52 billion of income, despite his wealth growing by $13.9 billion over that same period.
However, in recent times, Elon Musk appears to be at the forefront of criticisms amongst Democrat lawmakers, partly as a result of his financial status. The Tesla boss whose networth is pegged at about $244 billion according to a Forbes estimate responded to Senator Elizabeth Warren’s tweet noting that if the Senator chooses to open her eyes, she would realize that he’d pay “more taxes than any American in history this year.”
Elon Musk does not receive a salary from Tesla, rather he gets his reward from stock options and the growth in Tesla shares. The stock option was awarded back in 2012 and is set to expire by August 2022, and to exercise the stock options, Musk has to pay the income tax on the shares this year, else, he risks paying more next year.
Is Elon Musk Paying Taxes as a Necessity or as a Patriot?
The ethical aspects of paying taxes remain among those that many calls into question for billionaires like Elon Musk. There is the talk that his decision to pay the $11 billion in taxes he revealed on Twitter today Monday was based on an obligation, not because he is patriotic in his approach. Either way, the American government is on track to get a massive boost from Musk’s tax payment.
Elon Musk has also sold as much as $14 billion worth of Tesla stock since the beginning of November 2021. While the company’s shares have plunged in its market valuation over that period, the stock is still up by more than 28% year to date. Beyond the need to offset his tax bills, the selloff in shares was also advised by Elon Musk’s followers who voted ‘Yes’ to a question on whether he should sell 10% of his share networth.