Elon Musk says he will pay over $11 billion in taxes this year

Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory. In Grünheide close to Berlin, September 3, 2020.

Patrick Pleul | picture alliance | Getty Pictures

Elon Musk faces a significant tax monthly bill this yr — probably the greatest in U.S. background.

“For all those asking yourself, I will fork out above $11 billion in taxes this yr,” the Tesla CEO tweeted on Monday.

That is shut to a CNBC estimate that Musk was established to pay out a total of $12 billion in taxes in 2021.

Musk has sold off $14 billion truly worth of Tesla stock considering that early November, just after inquiring his followers in a Twitter poll if he must offer 10% of his holdings. The reaction to that poll was a resounding “of course.”

But it’s probably Musk would have started providing anyway. That’s because he faces a enormous tax monthly bill on Tesla inventory alternatives.

Stock alternatives Musk was awarded in 2012 are set to expire in August up coming yr. In purchase to workout them, he has to pay out earnings tax on the gain.

Rather than acquire a wage or cash bonus, Musk’s prosperity comes from stock awards and gains in Tesla’s share price tag.

However Tesla shares have taken a tumble considering the fact that Musk’s Twitter poll, they remain exceptionally important — the inventory is up 28% year-to-day.

When Musk needs hard cash, he can only borrow dollars employing his firm’s inventory as collateral. Nevertheless, this follow has been criticized by some politicians as a tax loophole for the mega-abundant.

Previously this calendar year, ProPublica released an investigation showing Musk and a number of other billionaires paid out no federal money taxes in 2018.

Among 2014 and 2018, Musk paid out $455 million in taxes on $1.52 billion of cash flow, in accordance to ProPublica, even with his wealth developing by $13.9 billion about that time period.

According to Forbes, Musk is value above $244 billion on paper, making him the world’s richest gentleman.

Musk could have waited until finally subsequent yr to pay back the tax bill, but that would have intended most likely finding strike by larger tax charges less than the Democrats’ Create Again Far better invoice.

The Tesla and SpaceX main has been sparring with notable Democrats on Twitter these days over the difficulty of tax avoidance.

Past week, he fired back again at Senator Elizabeth Warren immediately after she questioned Time Magazine’s decision to identify Musk its Person of the 12 months, tweeting: “I will pay out a lot more taxes than any American in historical past this year.”

And if Musk does close up spending the substantial sum he mentioned he would, there is a chance he may perhaps be ideal.