Tesla’s visionary CEO Elon Musk can add another distinction to his list of record achievements—although it’s likely to be one he won’t relish.
The wealthiest human to ever walk the earth posted on Twitter he will fork over more than $11 billion to the U.S. government this year, a tax bill that just may be the biggest—in absolute terms, anyhow—of all time.
Musk’s contribution comes amid fierce criticism from leading Democrats, including senators Bernie Sanders and Elizabeth Warren, that billionaires have enriched themselves on the back of other taxpayers while refusing to pay their fair share of taxes.
Warren even went so far as to brand him a “freeloader,” leading to a testy back-and-forth on Twitter in which Musk called her “Senator Karen.”
“For those wondering, I will pay over $11 billion in taxes this year,” Musk wrote in a weekend tweet, a kind of raising-of-the-white-flag on the dispute.
The $11 billion tax payout would be well above the previous record dished out by hedge fund giant and New York Mets owner Steven Cohen, who reportedly had to pay $3 billion.
The pandemic has sparked a wider debate—on social media and elsewhere—about the widening chasm between an increasing number of Americans struggling during the COVID pandemic, and, further up the pyramid, a handful of “centibillionaires” who have seen their net worth balloon during the past two years.
The Tax Justice Network, a nongovernmental advocacy group, estimated last month that the world’s population could be fully vaccinated three times over with the $483 billion in taxes not paid by multinational corporations and wealthy individuals, the latter of which, they say, have evaded $171 billion in tax.
Musk has argued the “only way” for him to pay taxes personally is to sell stock. That’s because he does not take a cash salary or bonus from anywhere, with his fortune tied solely to his equity holdings.
Musk allies sound off
The subject of Musk, who was recently named Time’s Person of the Year, legally skirting taxes on his fortune sparked an angry backlash by his legion of adoring fans, who have ridden the stock’s rally to newfound wealth themselves.
Tesla influencer Dave Lee attacked Sen. Warren in a podcast, while New Street Research analyst and Tesla bull Pierre Ferragu said he hoped the taxes Musk pays this year will finally placate their anger.
Musk’s overnight tax tweet follows a string of tweets about share sales over the past month. Since the Nov. 4 all-time high, the Tesla share price has been in bear-market spiral, falling more than 20%. In premarket trading, Tesla is down more than 2% today.
Tax dodging took on a whole new dimension in June after ProPublica revealed the ultrawealthy barely paid any taxes, citing individuals like Elon Musk, Jeff Bezos, and Warren Buffett.
Basing its calculation on actual tax returns filed, the investigative journalist operation estimated the 25 richest Americans collectively paid just $13.6 billion in federal income taxes in the five years through 2018, in part by borrowing against their stock holdings.
The Tesla CEO called the ProPublica report “very misleading” and “trickery” in a September interview with Recode, arguing it is a risk to pledge equity as collateral because share prices can also drop and trigger margin calls.
“They have no interest in the truth,” he told Recode’s Kara Swisher. “My top marginal tax rate is 53%, so I don’t think that’s particularly low, and it’s going to go up next year.”
Over to you, Jeff.