Elon Musk calls Elizabeth Warren “Senator Karen”, saying he will set all-time record tax bill
He might be right, at least about his 2021 tax bill.
Musk, who has never escaped a war on Twitter, responded with a series of insults.
Why Musk will pay at least $ 7.6 billion in taxes this year
While Musk has yet to pay taxes on their value, he will soon have to pay – and the tax bill will be heavy.
This is because once he has exercised those options, the value of the shares he has purchased, minus the very nominal exercise price of $ 6.24 per share, counts as income. And his bill on those stocks will be at the top federal tax rate of 37%, plus another 3.8% net investment tax on top of that, as well as some unspecified level of income tax. state revenue.
So far, Musk has exercised nearly 15 million of the 22.9 million options that were due to expire. And the value of those newly acquired shares was around $ 15.8 billion, which means it faces a federal tax bill of $ 6.4 billion. He sold 6.5 million of those newly acquired shares to pay withholding due on the exercise of options, according to documents he filed with the Securities and Exchange Commission about his stock transactions.
He’s been exercising options and selling stocks every week since early November, and he’s likely to exercise at least 4 million more options, if not more, before the end of the year. That could increase his 2020 tax bill by nearly $ 2 billion more.
Last month, Musk also sold 5.4 million shares he held in trust, most of which have been held since the 2010 initial public offering. These shares will be taxed at a capital gain rate. 20% lower long-term, so it will face an additional federal tax bill of about $ 1.2 billion more on those sales.
So its federal tax bill to date for 2021 stands at $ 7.6 billion, with a chance it could reach nearly $ 10 billion or more by the end of the year.
Wealth tax would cost Musk – if he passes
Musk, as the richest person, could face a $ 7.5 billion tax bill if this proposal passes, even if he doesn’t trade any shares next year, given the value current holdings. And Tesla’s shares have risen more than any other over the past two years, which means it could pay even more if it continues to rise in value. But so far, this legislation is not about to be adopted.
Comments are closed.