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20 Dec, 2021 03:49

Musk reveals how much tax he’ll pay in 2021

Musk reveals how much tax he’ll pay in 2021

Tesla CEO Elon Musk has attempted to set the record straight about how much he owes the US government in taxes after claiming he would pay more towards the US budget this year than any other American in history.

“For those wondering, I will pay over $11 billion in taxes this year,” Musk tweeted on Monday in an apparent bid to put speculation about his tax situation to rest.

The billionaire owner of Tesla and SpaceX have been selling off his Tesla stock at an ever-increasing pace, getting rid of some 12.9 million shares worth nearly $14 billion since early November.

While Musk caused a stir last month by asking his Twitter followers if he should get rid of 10% of his Tesla stock, promising to stick to whatever advice Twitter gave him, the selling spree appears to be motivated by pragmatic business concerns.

Musk has until August to snatch up a bargain by exercising some 22.9 million stock options that would allow him to buy Tesla shares at around 1% of their current value. In order to do that, he is required to pay income tax on the sold stock.

Musk’s own estimate of how much tax he will pay to the US government aligns with figures cited by the media. For instance, The Business Insider reported on Thursday that Musk is facing a tax bill “just shy of $12 billion.” The Tesla CEO is reportedly due to pay some $8.2 billion on the stock he disposed of in 2021 alone. In addition to that, Musk is expected to pay just below $900 million in Net Investment Income Tax (NIIT) and another $2.9 billion in taxes to California, where Tesla had been headquarted until it was revealed in October that it would be moving to Texas.

The revelation also comes after Musk traded verbal blows with Senator Elizabeth Warren (D-Massachusetts), who accused him of being a “freeloader” for paying little or no taxes in previous years. Musk fired back, branding the tax-the-rich senator a “Karen” – a term used to describe entitled white women.